“On the one hand by just closing their eyes – and this, in fact, has long been the reaction of the ordinary man. Or, on the other hand, by a kind of nationalistic paranoia. As the experts so bluntly put it: persecution mania”
Alva Myrda, winner of Nobel Peace Prize, 1982

The ramifications of the Free Trade Agreement between Oman and the US are interesting to say the least, considering recent developments. As noted by many senior American analysts, like Daniela Markheim, a Jay Van Andel Senior Analyst in Trade Policy, The Heritage Foundation, Center for International Trade and Economics, the benefits will be massive. From the trade perspective: In 2005, trade between the US and Oman exceeded US$1bn. The US exported almost US$594mn in goods to Oman, and Oman’s exports to the US totalled almost US$555mn.

Under the FTA, all bilateral trade in manufactured goods would become duty-free. Oman would immediately eliminate the tariffs that 87 per cent of US agriculture exports to Oman now face and phase out the remaining product tariffs within ten years. Markheim clearly states that in addition to promoting freer trade in manufactured goods and agriculture products, the US-Oman agreement would also create opportunities for America’s service sector. Oman would open markets to US firms exporting a variety of services, including audiovisual, express delivery, telecommunications, healthcare, and construction services.

Now, though the US House of Representatives passed the legislation on July 20 that would implement the FTA with Oman, it was a narrow shave of sorts. The 221-205 vote, with Republicans supporting the bill and Democrats opposing it, cleared the way for Senate action. Senate leaders are trying to reach agreement to pass the House bill before the August congressional recess, according to news reports. This FTA, that the Bush administration says would help advance political and economic freedom in the Middle East, was initially opposed on ‘labour’ issues and now, the concern of several House members are being splashed all over saying that this deal could jeopardise US homeland security. What was that again?

The fact is that while the initial economic effects of the treaty may be modest, the agreement is a big step forward for the Bush government towards establishing a Middle East free trade area by 2013. Oman is a key ally, owing both to geographical location as well as moderate beliefs. And in the longer term, the today’s modest gains may grow to mammoth proportions. There seem to be only winners here!

Mohana Prabhakar
Managing editor