United States-Oman Free Trade Agreement Implementation Act
Mr. Speaker, after the tragedies of September 2001, the United States Congress created the National Commission on Terrorist Attacks Upon the United States, commonly called the 9-11 Commission. This independent, bipartisan body was charged…
Mr. Speaker, after the tragedies of September 2001, the United States Congress created the National Commission on Terrorist Attacks Upon the United States, commonly called the 9-11 Commission. This independent, bipartisan body was charged with preparing a complete account of the circumstances surrounding the attacks and with recommending policy changes designed to prevent future attacks. I have a great deal of respect for the individuals who served on this commission and for their final work product.
America is in the midst of fighting a long, complex war against terrorism that must be fought with unconventional tools. The 9-11 Commission recognizes the unique nature of our conflict and has recommended that the United States engage Middle Eastern nations economically in order to foster development and reforms in that troubled part of the world. Economic openness requires bilateral compromise and gives America an opportunity to positively influence the region. And, importantly, economic reforms and political liberties tend to be linked.
In the Middle East, the Congress has approved trade pacts with Israel, Jordan, Morocco, and Bahrain. I have supported them because I feel they are critical to enhancing our economic ties to the region. Today, we are considering an agreement with Oman, and after careful consideration, I have decided to support this legislation as well.
Oman is a small, oil-exporting nation located on the Arabian peninsula at the mouth of the Persian Gulf. It is strategically important to the United States and has played a meaningful role in our efforts to defeat terrorism. As Oman's oil reserves diminish, its government has been working to liberalize and diversify its trade beyond oil and gas.
America's economic partnership with Oman carries with it great promise. Boosting our economic partnership with that country will enhance our national security standing in a strategically critical area and will open doors to agricultural trade. The agreement will lower
tariffs on U.S. agricultural commodities and products, thereby putting our Nation in a better position to increase exports and compete with other nations for market share. After full implementation, U.S. agricultural exports could reach $225 million or more.
No trade deal is ever perfect. Clearly, some improvements could be made in the bill, especially with regard to labor protection and human rights. But, as I studied the Oman Free Trade Agreement and heard from national security, agriculture, labor, and business leaders, I became convinced that this trade agreement is critical to U.S. national security and to Missouri's rural economy.
In the days leading up to today's debate on the Oman Free Trade Agreement, there has been much talk about port security. Despite the rhetoric surrounding this issue, a nonpartisan legal analysis from the Congressional Research Service has shown that Congress retains its ability to determine the national security interests of our country and to prevent port operations if need be. The CRS analysis is set forth below, as is a letter from the Secretary of the Treasury on this issue:
Congressional Research Service,
Washington, DC, July 18, 2006.
memorandum
Subject: Legal Issues Related to the Proposed Oman Free Trade
Agreement and Port Security.
From: Todd B. Tatelman, Legislative Attorney, American Law
Division.
This memorandum is in response to requests for a legal
analysis of three arguments that have been advanced in
opposition to the proposed Oman Free Trade Agreement (FTA).
Each of the arguments relate to issues surrounding port
security and, specifically, the ability of Omani companies or
companies incorporated in Oman to perform ``landside aspects
of port activities'' in the United States. This memorandum
provides a legal analysis of three questions: First, whether
the proposed Oman FTA allows Omani companies or companies
incorporated in Oman to perform ``landside aspects of port
activities'' at U.S. ports, especially in light of the
dispute over Dubai Ports World's attempt at establishing
similar business operations at various ports in the United
States. Second, whether the proposed Oman FTA provides some
type of advance clearance to Omani companies that wish to
begin landside port operations in the United States. Finally,
this memorandum provides a legal analysis with respect to the
possibility of a third-country company (e.g., Dubai Ports
World or similarly-situated foreign entity), establishing a
minimal presence within Oman for the sole purpose of taking
advantage of the benefits provided by the provisions of the
proposed FTA.
One argument that has been raised against the proposed Oman
FTA appears to stem specifically from language contained in
Annex II of the Agreement. The argument generally asserts
that the proposed Oman FTA provides a new right to both
Omani-owned companies and companies based in Oman that will
allow them to perform ``landside aspects of port operations''
at U.S. ports. Upon close inspection of the language in
Annex II, however, it appears that this claim is
misleading because it appears that Omani companies are
already presently able to perform these services.
Currently, there are no U.S. laws that prevent either an
Omani-owned company (state controlled) or any other
foreign-owned company (regardless of whether the company
is state-owned or privately owned) from contracting with
port owners to perform ``landside aspects of port
activities'' in the United States. In other words, if an
Omani company (either state or privately owned) wants to
engage in contract negotiations with port owners to
provide for the types of services envisioned in Annex II,
there is no U.S. law that would expressly prevent them
from receiving said contracts.
Annex II of the proposed Oman FTA allows the parties to
list ``the specific sectors, subsectors, or activities for
which that Party may maintain existing, or adopt new or more
restrictive, measures'' that are not in conformity with the
various obligations imposed by the Agreement, such as
National Treatment (Articles 10.3 or 11.2), Most-Favored
Nation (Articles 10.4 or 11.3), and Market Access (Article
11.4). With respect to the Transportation Sector, the U.S.
Schedule to Annex II lists 12 types of measures that the
United States has specifically reserved the right to either
maintain or adopt new more restrictive measures. These 12
types of measures generally reflect the current restrictions
placed on foreign investment and/or ownership of maritime
assets by U.S. domestic law. Phrased another way, the United
States has reserved the right to maintain our existing legal
restrictions with respect to those aspects of maritime
transportation in which we already have limitations, as well
as adopt new measures in these categories that may be more
restrictive.
Additionally, the U.S. Schedule indicates that we do not
include in our reservations either ``vessel construction and
repair'' or the ``landside aspects of port activities.'' The
noninclusion of these measures in our schedule merely
indicates that the U.S. government is not reserving the right
to impose a future restrictive measure with respect to
``landside aspects of port activities.'' It does not appear
possible to interpret this language as granting any type of
new business opportunity to Oman or Omani based companies.
Moreover, with respect to ``landside aspects of port
activities'' the language in Annex II specifically states
that the promised treatment ``is conditional upon obtaining
comparable market access in these sectors from Oman.'' As a
result of this language, it appears that the proposed Oman
FTA does not grant any new opportunities for business
investment to Oman that do not already exist, nor does it
allow Oman to establish ``landside aspects of port
activities'' unless it is determined that comparable market
access is provided to U.S. companies in Oman. Indeed, it may
be possible to argue that the language in Annex II in fact
potentially limits the opening of U.S. markets with respect
to ``landside aspects of port activities'' because it imposes
a comparable access requirement that does not currently exist
under domestic law.
Another argument raised in opposition to the proposed Oman
FTA is that it provides a type of ``pre-clearance'' to
businesses in Oman with respect to ``landside aspects of port
activities.'' It is unclear at this time precisely what the
term ``pre-clearance'' means in this context. For the
purposes of the memorandum, however, we will assume that
this language refers to the national security review
conducted by Committee on Foreign Investment in the United
States (CFIUS). CFIUS, as you may know, was the executive
branch entity responsible for reviewing national security
and other implications of the Dubai Ports World
transaction. U.S. law permits the President, at his
discretion, to investigate the national security
implications of ``mergers, acquisitions, and takeovers . .
. by or with foreign persons which could result in foreign
control of persons engaged in interstate commerce in the
United States.'' In addition, domestic law requires the
President to conduct an investigation ``in any instance in
which an entity controlled by or acting on behalf of a
foreign government seeks to engage in any merger,
acquisition, or takeover which could result in control of
a person engaged in interstate commerce in the United
States that could affect the national security of the
United States.'' The President, by Executive Order, has
delegated the responsibility for these investigations to