THE BLOG
07/19/2006 05:28 pm ET Updated May 25, 2011

Oman Free Trade Agreement: Another Ports Scandal - With No Out

The nation was in an uproar earlier this year over the revelation that Dubai Ports World had been given the go-ahead to take over the operations of several U.S. ports. From Main Street to Capitol Hill, Americans made it clear that they did not want to hand over control of critical infrastructure to foreign interests.

But now, less than six months later, a new version of the deal is back, disguised deep inside the Oman Free Trade Agreement (OFTA), which the U.S. House of Representatives will vote on this week.

Imagine if Congress were slapped with a lawsuit demanding payment of millions of our tax dollars because Congress protected our national security by denying a foreign corporation the right to run our U.S. ports.

That's exactly what's at stake. The Oman agreement, based on the failed NAFTA model, contains a disturbing surprise: Foreign companies incorporated in Oman would be given the right to own and operate important and sensitive infrastructure in the United States, including the landside activities of our ports.

Simply put, if such rules had been applicable to Dubai, the United States would have had to pay the Emir of Dubai tens of millions of U.S. taxpayers' dollars for taking actions that undermined that company's "right" to run our ports.

As a technical matter, the Oman agreement would provide foreign firms the "right to establish," which is trade jargon for the right to "acquire, own and operate" a service sector operation within the United States. Remarkably, U.S. negotiators expanded the list of service sector operations to include landside port activities, including "operation and maintenance of docks; loading and unloading of vessels directly to or from land; marine cargo handling; operation or maintenance of piers; ship cleaning; stevedoring; transfer of cargo between vessels and trucks, trains, pipelines and wharves; waterfront terminal operations" and more.

These activities, which have direct security implications, are precisely the sorts of activities that moved Congress toward quashing the Dubai Ports World deal.

Even worse, the new "rights" in the trade agreement are not limited to Omani companies. Any firm incorporated in and operating in Oman, including foreign-owned companies, would gain the agreement's new foreign investor privileges. So, if Dubai Ports World (DPW) simply sets up shop in Oman, we won't be able to stop it from taking over our port operations. That would be a violation of our trade agreement -- which could have significant consequences.

Under the agreement, Dubai Ports World would be empowered to sue the United States for this "violation" in United Nation or World Bank tribunals, which can order the United States to pay cash damages. Can't imagine a foreign trade tribunal telling the United States what to do? Think again. U.S. laws have been subject to several dozen successful attacks in trade tribunals. The United States has systematically changed or eliminated challenged laws from dolphin conservation to clean air to U.S. highway-truck safety to tax law.

The Bush administration has decided to put the NAFTA expansion demands of its corporate supporters ahead of our national security and the clear will of the citizens of this great country. Now, only Congress can protect us from this dangerous backdoor attack on our port security by rejecting the Oman-U.S. FTA.

The Bush administration had a choice about whether to include landside port activities in the trade agreement. These new rights for foreign investors could also make it more difficult in the future to defend state and local actions taken to create decent jobs at our nation's maritime ports.

The United States has already lost more than 1 million jobs due to NAFTA. That alone is enough to stop these unfair trade agreements. And now, these NAFTA-style agreements pushed by the Bush administration could undermine our national security as well.