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As the dust has almost settled following the passage of the Oman-US FTA through the US Senate, it might be as well to take note of some of what has been published on the issue in the last two weeks.

President George Bush has virtually achieved his aim of getting approval, barring what may be a rubber-stamp pass in the House of Representatives, thanks to a Republican majority.

"In a statement released June 26, Bush said Oman “is leading the pursuit of social and economic reforms in the region,” through efforts such as selling state-owned businesses, encouraging foreign investment for development and providing better protection for women and workers." US Department of State

That's a very broad brush.

The Times of Oman reported that US Trade Representative Susan Schwab said, “The agreement will create jobs and economic growth here at home and promote democracy, prosperity, and hope in the Middle East.” Once the pact receives final approval and is implemented, “100 per cent of consumer and industrial products will be duty free.”

“This new trade opening will expand opportunities for exports of machinery, automobiles, optic and medical instruments and electrical machinery, and agricultural products such as vegetable oils, and sugars, sweeteners, and beverage bases,” she continued.

“In addition, Oman will provide substantial market access across its entire services regime, provide a secure, predictable legal framework for US investors operating in Oman, provide for effective enforcement of labour and environmental laws, and protect intellectual property.”

So Oman will be offered more goods from the States, which will be duty-free, and in return, the Sultanate is supposed to pass legislation that the USA thinks appropriate. I imagine that a more realistic attraction would be greater freedom for Americans to invest in business and industry in the country, such as the mega projects underway at Sohar, and maybe in the Free Zone in the south of the country. It's a key issue that Oman has now agreed to provide a secure, predictable legal framework for US investors. Americans do like to feel secure. Wouldn't you?

I wouldn't say that the size of the market in Oman would impact noticeably on employment in the USA. Even without duties, I wonder if the price of American goods could compete with comparable goods in the shops. Still, as far as the Americans are concerned, it's not just the one agreement with Oman that matters, but a whole series of agreements. Some Democrats quote a figure of more than three million manufacturing jobs lost in the States since 1998, partly because of free trade agreements and similar deals.

416 US and international organisations have apparently warned that the FTA could turn Oman into "a sweatshop apparel export platform". Actually, I was under the impression that the garment industry in Oman has not been doing so well lately, but I'm open to correction. And I suppose that there's also the possibility that Oman could act as a re-export centre. One American blogger has called for united action to defeat the FTA in the House of Representatives because, "The U.S.-Oman FTA threatens American jobs. For example, AMTAC (American Manufacturing Trade Action Coalition) states that the agreement includes a ridiculously large tariff preference level (TPL) of 50 million square meters of textiles annually for 10 years, which will mean that Chinese yarns and fabrics will be shipped to Oman, cut and sewn into garments and then exported duty-free to the U.S."

Objections from the Democrats have highlighted the strategic nature of the agreement. The Republicans do not disagree. Oman has been a good friend and is a strategic ally, they say, having given landing and flying rights to the USA's military forces, if not land for an airbase in northern Oman. In fact, it seems that as part of the negotiations, the Oman government has committed to dropping an Arab League boycott of Israeli products, which came into force after Israel occupied Arab land in 1967.

The Oman FTA fits into President Bush's plan to bring together all 22 Arab nations with Israel and the U.S. in a Middle East Free Trade Area (MEFTA) by 2013. Improved economic, trade and security relations could help in the fight against terrorism.

Objections to the deal continue to simmer in the USA, chiefly on environmental and labour grounds. For one thing, Oman is not required to adhere to key treaties on biodiversity and species protection. The agreement only requires that the country enforce its own environmental laws.

At a press conference held last Tuesday, Democratic opponents voiced their oppostion to what they called a:

"serious violation of the International Labor Organisation's most important and fundamental rights -- the freedom of association and the right to organise and bargain collectively." There are no independent trade unions in Oman and so-called "worker's committees" are state-affiliated. Even when they exist, those organisations cannot discuss wages, hours, or conditions of employment. Senate Minority Leader Harry Reid said in a statement, "I don't think the American public believes that foreign producers using outrageous labour practices should be able to get special access to the U.S. market."

They might actually have a point.

I'm not at all clear that Oman's workers' committees encourage expatriate workers as members. Expatriates, you see, are supposed to be protected by the Labour Law. See the official Ministry of Information page which harks back to Royal Decree 34/1973. A revised labour law was issued under Royal Decree 35/2003, which includes conditions for employing women and juveniles. Chapter nine of the decree covers representative committees, but it's very short and perfunctory. As often happens with Royal Decrees, it's left to the relevant minister, presumably here the Minister of Manpower, to specify the details of how the law and regulations should work.

The Oman Labour Main Representative Committee (OLMRC), formed in May 2005, has been endorsed by the government as an official body to represent Omani workers in international and regional events and activities. Note that that's Omani workers, not expatriates.

The OLMRC ran a seminar on ‘Freedom of Association and Social Dialogue’, at the Oman Chamber of Commerce and Industry (OCCI), at the beginning of the week, which was also attended by experts from the International Labour Organisation (ILO), Arab Labour Organisation and AGCC labour unions.

Saud bin Ali Al Jabri, vice-chairman, told the Times of Oman that the OLMRC is still feeling its way and that it is working on building up the skills of its members so that they can represent their colleagues responsibly. Reading the article, one gets a sense of a lack of confidence. The concept of union bargaining power to challenge the established system of managers dictating terms of employment is so very new. As a result, the committee is on a steep learning curve.

Asked about violations of the Labour Law, Al Jabri cited the recent case of Representative Committee members being sacked by an employer because they were asking for better benefits for the employees. He added, "This sacking was not fair practice, and was neither in line with the labour law nor in line with any international rules and regulations. So we had to intervene and sit with the employer, and the Ministry of Manpower to resolve the issue." That shows how hard it can be for Omani employees.

In fact, procedures for employing expatriates are to become more stringent, according to Khalil Al Khonji, member of the Sanad executive committee, speaking in May 2006 .

I wonder how this might affect the despatch of American businessmen to run branches of their enterprises in Muscat and elsewhere.

Addendum: Diane Grassi, an American freelance reporter, makes the following interesting points in an article published on 5th July.

1 Despite assurances to the US that Oman would drop the Arab League boycott of imported Israeli goods, Oman’s Directorate of General Customs Mohammed Nasser recently told the Jerusalem Post that “even catalogs of commercial products that mention Israel would likely be seized by Omani authorities.”

2 Chapter 11 of the agreement along with Annex 2, establishes that commercial disputes be settled under the realm of International Tribunals. So contracts for mutually agreed commercial activity would override local, state or national U.S. laws.

3 The USA has regarded itself as the world’s watchdog on human rights. Ms Grassi maintains that the Oman FTA, along with other agreements being reviewed in Congress, are lax in that they do not insist on labour legislation comparable to that in the United States. The FTA only requires that Oman enforce its own labour legislation.