The U.S.-Oman Free Trade Agreement Implementation Act ratifies a trade deal negotiated by the United States and Oman, a small nation in the Middle East. The agreement is modeled on the 1994 North American Free Trade Agreement (NAFTA) and the 2005 Central American Free Trade Agreement (CAFTA) and, like those agreements, removes most export tariffs between the signatory nations while also increasing protection for pharmaceutical patents and other intellectual property. The agreement includes requirements that public services be open to private investment and that the government allow international companies to bid for its purchases. The agreement is part of a comprehensive strategy to form a
Middle East Free Trade Area.
The Middle-Class Position:
The Middle Class Opposes. Increased international trade can contribute to economic growth, but the way trade rules are formulated in agreements like this means that the benefits of trade are distributed unevenly, ultimately undermining the middle class and aspiring middle class in both the U.S. and the nations it trades with. A central problem is that the Oman trade agreement empowers businesses and investment capital to cross international borders more easily, providing a decisive advantage over working people who are not so internationally mobile and whose rights are not well protected in Oman. Despite recent reforms to the Omani labor code, independent unions are still banned. There are also concerns about human trafficking and involuntary servitude among the more than half a million guestworkers from nations including India, Bangladesh, and the Philippines who make up the bulk of the Omani workforce. This imbalance of power creates incentives to move U.S. jobs overseas and puts downward pressure on the wages of American workers as they are placed in more direct competition with poorly-paid, disempowered Omani workers.
From the Experts:
“The U.S.-Oman FTA epitomizes many of the main problems that have plagued U.S. trade policy for decades. These have cost the United States vital manufacturing output and employment, and have pushed the nation’s trade deficit to record levels… A major re-thinking and change of course on U.S. trade policy is essential for revitalizing American industry and returning it to world-class competitive status. Defeating the U.S.-Oman Free Trade Agreement would be an excellent place to begin.” –Kevin L. Kearns, President, United States Business & Industry Council (June 28, 2006)
“The Oman FTA provides precisely the wrong answers to the challenges faced in Oman and the United States. The agreement is based on a failed model that neither addresses the problems confronted by workers in Oman, nor contributes to the creation of good jobs and decent wages at home. The workers’ rights provisions are entirely inadequate to ensure that workers’ fundamental human rights are respected, and the dispute settlement mechanism for workers’ rights and environmental protections is far weaker than that available for commercial provisions. At the same time, flawed provisions on services, investment, government procurement, and intellectual property rights will undermine the ability of both governments to protect public health, strong communities, and the environment.” –Thea Lee, Policy Director, AFL-CIO (March 6, 2006)
“A trade deal like this that rewards worker oppression, undermines Americans’ job security, promotes environmental degradation, encourages health industry price gouging and weakens America’s post-9/11 security is nauseating to most Americans… More Americans will ask why we aren’t using America’s incredible economic leverage to craft trade policies that force other countries to end their oppressive policies as a condition of doing business with us.” –David Sirota, author, Hostile Takeover: How Big Money and Corruption Conquered Our Government—And How We Take It Back (July 21, 2006)
Beyond this Bill:
Trade deals may be at the top of Corporate America’s agenda, but they aren’t a priority for the American middle class. Instead, measures that will enable Americans to retain a middle-class standard of living in the face of the intense global competition that already exists – such as universal access to health care, more affordable college education and greater protection for labor rights at home – must take precedence. To truly benefit the middle class, any new trade deals must decisively break with the failed NAFTA-CAFTA model and be written from scratch, taking into account from the beginning the interests of not only multinational corporations but also consumers, the environment, and working people in the U.S. and abroad.
Date on which President Bush boasted that the Oman trade deal would “provide additional market access for U.S. goods”: 9/19/2006
Estimated Gross Domestic Product of Oman in 2006: $44.53 billion
Estimated Gross Metropolitan Product of the Memphis, TN area in 2005: $56.69 billion
Date on which the current Omani head of state, Sultan Qaboos bin Said al-Said first assumed office: 7/23/1970
Estimated percentage of increased inequality of earnings in the U.S. in 2006 attributable to trade policy: 7
Minimum annual loss this represents to the typical married couple household in the U.S.: $2,000
Approximate proportion of U.S. workers whose jobs are potential targets for off-shoring if present trade policies continue over the next two decades: 1 in 4
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