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Statement of Lori M. Wallach, Director of Public Citizen’s Global Trade Watch Division

June 29, 2006

Statement of Lori M. Wallach, Director of Public Citizen’s Global Trade Watch Division

    With last year’s CAFTA vote casting shadows over a dozen congressional races, it is remarkable that the Bush administration is queuing up yet another controversial trade vote it knows few Democrats will support.

    In order for the Oman Free Trade Agreement (OFTA) to get through the House of Representatives, the same vulnerable Republicans will be pressured to walk the plank on yet another NAFTA-expansion vote before midterm elections. The OFTA vote will also provide Ohio, Pennsylvania and other heated Senate races with a new vote distinguishing Democrats from Republicans on an issue gaining public attention.

    The Bush administration’s refusal to include a bipartisan Senate amendment banning slave labor goods in the trade bill means that few Democrats will support the agreement. Today’s Ways and Means OFTA markup was historic – the first instance in 15 years that a trade bill did not obtain a single Democratic vote of support.

    The administration had declared its intentions to pass OFTA by a wide margin by February, but found that opposition to the pact – which is nearly identical to CAFTA – was significant. Recent State Department reports about human trafficking and forced labor in Oman have intensified opposition, as have recent press reports detailing abysmal labor conditions resulting from a 2001 Jordan-U.S. Free Trade Agreement.

    CAFTA, which was opposed by all but 15 House Democrats, was a difficult sell even among some House Republicans who tend to vote with the Bush administration. This lack of congressional support for CAFTA, as well as the razor-thin vote, the tactics used to pass CAFTA and now the intense battle over OFTA, highlights a broad rejection – by Republicans and Democrats alike and by the American people – of any expansion of the NAFTA model.

    OFTA is almost identical to CAFTA, except where it’s worse. OFTA’s labor provisions are identical to CAFTA’s. The only obligation is that Oman enforce its existing labor laws. The only sanction is fines capped at $15 million annually, which Oman would pay to itself. This lack of labor protection is particularly significant because Oman’s labor laws are exceptionally bad – considerably worse than Central American laws, with independent unions explicitly forbidden. The State Department’s most recent report cites Oman for forced labor and human trafficking, among other human rights violations.

    OFTA contains new patent protections that provide pharmaceutical companies with additional tools for keeping secret the test data necessary to make generic drugs available. Additionally, OFTA goes even further than NAFTA and CAFTA in explicitly giving foreign investors the right to challenge many U.S. government decisions about federal contracts, leases or concession agreements affecting a covered foreign investor.

    Members of Congress are being forced to confront the job loss, declining tax base, record trade deficit and other harsh realities produced by Bush trade policies, yet the Bush administration continues to push on with more status quo trade policy by persisting in negotiating trade agreements based on a model strongly opposed by the American people. Until the Bush administration reverses course on a trade agenda that has helped create an untenable trade deficit, it will find Capitol Hill no friendly place for more of the same.

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