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Senate hears testimony before vote on US-Oman Free Trade Agreement

Kuwait News Agency

Senate hears testimony before vote on US-Oman Free Trade Agreement

7 March 2006

WASHINGTON, March 7 (KUNA) — The US Senate Finance Committee heard testimony from Mideast and business experts mostly in support of enhancing economic cooperation in a Free Trade Agreement (FTA) between the United States and Oman, a Gulf Cooperation Council (GCC) member-state.

According to the National US-Arab Chamber of Commerce (NUSACC), US exports to Oman are expected to reach nearly one-billion dollars this year, up from around 593-million dollars last year.

David Hamod, president of NUSACC, testified before Senate on Monday that a US-Oman FTA is a "win-win" opportunity for both US and Omani interests.

Under the signed Agreement, Oman has agreed to provide duty-free access on 100 percent of US consumer and industrial products, with the exception of some apparel and textile goods.

The Agreement also stipulates that all agricultural tariffs will be completely phased out and within 10 years.

And although trade with Oman comprises less than one percent of total US goods trade, US companies seek lucrative foreign investment opportunities in the small, but oil rich GCC country, which is seen as a gateway to the broader Mideast economy.

Republican Senator Chuck Grassley from Iowa and chairman of the Senate committee noted in his opening remarks that the US-Oman FTA will provide export opportunities for US farmers, including those from his state.

Grassley said he believed that the US-Oman FTA will also "contribute to the security of our country." US President George Bush has stated his policy for a Middle East Free Trade Agreement by 2013 to improve the standard of living in the Arab world and strengthen bilateral ties as a means to spread democracy in the region.

Deputy US Trade Representative Susan Schwab told the Senate committee that trade with the Middle East, currently totaling around 70-billion dollars a year, is one approach to addressing "economic, social and political challenges facing the region and US interests in the area." She cited the success of previous FTAs with Jordan, Morocco and Bahrain and said such Agreements helped strengthen the environment for foreign investment.

The enforcement of intellectual property rights, environmental standards and labor laws are examples of requirements the United States demands in its Agreements.

But Director for the AFL-CIO, which is an organization representing over 9-million workers in the United States, argued that Omani labor laws are "egregiously out of compliance with the International Labor Organization core labor standards." She argued that the Agreement has flawed provisions that undermine the ability of both the United States and Oman to ensure that fundamental human rights are respected.

Lee warned that American workers may also be harmed by the lower cost of energy in Oman, which may attract foreign manufacturers to use the country as an export arena to "flood the US market" with their products. Despite these concerns, groups such as the American Kuwait Alliance, Coca-Cola, PepsiCo Inc., Occidental Petroleum and many more represented under the US-Middle East Free Trade Coalition encourage an FTA between the United States and Oman.

Moreover, Schwab, defending the US Trade office decision to sign an FTA with Oman, said that the Gulf country has taken major steps to improve labor laws and is an ally of the United States. It helped the US in the first gulf war, the official said.

More recently, Oman "supported US military action in Afghanistan" and has worked closely on counter-terrorism financing to control money laundering, according to former Ambassador Edward Walker, president of the Middle East Institute.

Before the agreement is signed into law by Bush it must first pass through the Senate Finance Committee, which is expected to approve the fourth signed FTA between the United States and an Arab state, then win a majority vote on the Senate floor and in the lower House of Representatives.

The Senate hearing comes at a time of growing bipartisan objection to a 6.

8-billion dollar deal that would allow a firm owned by GCC member-state the United Arab Emirates control of terminals at six major US ports.

The UAE, which will hold the fifth round of negotiations for an FTA with the United States later this month, is expected to sign an Agreement before the end of the year.