[House Report 109-574]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     109-574

======================================================================
 
       UNITED STATES-OMAN FREE TRADE AGREEMENT IMPLEMENTATION ACT

                                _______
                                

 July 17, 2006.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Thomas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 5684]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Ways and Means, to whom was referred the 
bill (H.R. 5684) to implement the United States-Oman Free Trade 
Agreement, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Introduction.....................................................2
          A. Purpose and Summary.................................     2
          B. Background..........................................     2
          C. Legislative History.................................    11
 II. Section-by-Section Summary......................................13
          A. Title I: Approval and General Provisions............    13
          B. Title II: Customs Provisions........................    15
          C. Title III: Relief from Imports......................    18
          D. Title IV: Government Procurement....................    21
III. Vote of the Committee...........................................21
 IV. Budget Effects of the Bill......................................22
          A. Committee Estimate of Budgetary Effects.............    22
          B. Budget Authority and Tax Expenditures...............    22
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................    22
  V. Other Matters To Be Discussed Under the Rules of the House......24
          A. Committee Oversight Findings and Recommendations....    24
          B. Statement of General Performance Goals and 
              Objectives.........................................    24
          C. Constitutional Authority Statement..................    24
          D. Information Relating to Unfunded Mandates...........    25
 VI. Changes in Existing Law Made by the Bill, as Reported...........25
VII. Correspondence Related To Labor Reforms.........................28
          A. July 12, 2006 letter to Ambassador Schwab from Omani 
              Ambassador Hunaina Al-Mughairy.....................    28
          B. June 26, 2006 letter to Chairman Thomas from 
              Ambassador Schwab with attached June 21, 2006 
              letter to Ambassador Schwab from U.S. Ambassador to 
              Oman Gary Grappo...................................    31
          C. June 22, 2006 letter to Chairman Grassley from USTR 
              General Counsel James E. Mendenhall................    45
          D. May 8, 2006 letter to Ambassador Portman from Omani 
              Minister of Commerce and Industry Maqbool Ali 
              Sultan.............................................    48
          E. March 26, 2006 letter to Chairman Thomas from Omani 
              Minister of Commerce and Industry Maqbool Ali 
              Sultan.............................................    52
          F. March 3, 2006 letter to Chairman Thomas from Omani 
              Ambassador Hunaina Al-Mughairy.....................    54
VIII.Correspondence Related To Trade With Israel.....................54

          A. June 28, 2006 AIPAC letter to Rep. Shaw and Rep. 
              Cardin.............................................    54
          B. June 22, 1996 memo from Omani Director General of 
              Customs............................................    56
          C. June 9, 2006 letter to Omani Sultan bin Said from 
              Rep. Wexler........................................    58
          D. September 28, 2005 letter to Ambassador Portman from 
              Omani Minister of Commerce and Industry Maqbool Ali 
              Sultan.............................................    60
 IX. Views...........................................................61

                            I. INTRODUCTION


                         A. Purpose and Summary

    H.R. 5684 would implement the January 19, 2006 Agreement 
establishing a free trade area between the United States and 
Oman.

                             B. Background


             I. The United States-Oman Free Trade Agreement

    The Committee believes that the Agreement meets the 
objectives and priorities set forth in the Bipartisan Trade 
Promotion Authority Act of 2002 (TPA). The Agreement covers all 
agricultural and industrial sectors, provides for some of the 
greatest market access for U.S. services of any Free Trade 
Agreement (FTA), contains robust protections for U.S. 
intellectual property rights holders, and includes strong labor 
and environment provisions. In addition to the new commercial 
opportunities it provides, the Agreement will support many of 
the recent governance, legal, and economic reforms in Oman.
    Trade Impact.--All bilateral trade in consumer and 
industrial products will become duty-free immediately upon 
entry into force of the Agreement. According to the United 
States International Trade Commission (ITC), the Agreement will 
likely have a ``small but positive effect on the U.S. economy'' 
due to Oman's relatively small share of total U.S. trade. Many 
Omani goods already enjoy duty free treatment because of Oman's 
Generalized System of Preferences (GSP) status and Normal Trade 
Relations (NTR) status.
    Agriculture.--All agriculture products are covered by the 
Agreement, which will provide immediate duty-free access for 
U.S. agriculture exports in 87% of agriculture tariff lines. 
Oman will phase out tariffs on remaining products within ten 
years. The United States exported $12 million in agricultural 
products to Oman in 2005, including sugars, sweeteners, and 
beverage bases.
    The United States will provide immediate duty free access 
to 100% of Oman's current agricultural exports to the United 
States. Oman has not traditionally been a large agricultural 
exporter to the U.S. market, and USTR reports that the United 
States imported $1.7 million in agricultural products from Oman 
in 2005. Accordingly, the Agreement does not contain an 
agricultural safeguard.
    Textiles and Apparel.--The Agreement contains a yarn-
forward rule of origin for textiles. Like other FTAs (including 
Bahrain, Morocco, Chile, Singapore, and NAFTA), the Agreement 
contains limited, temporary allowances for the use of yarn and 
fabric from a non-party under a Tariff Preference Level (TPL). 
It is set at an annual level of 50 million square meters 
equivalent (SMEs) for the first ten years and is equal to 
approximately 0.1% of total U.S. imports of textile and 
apparel. U.S. exporters are provided with the same TPL access 
to Oman's market. After the TPL expires, all trade under the 
Oman FTA must adhere to the yarn-forward rule of origin. While 
ITC estimates that the Agreement will result in an increase in 
Oman's textile exports to the United States, it also estimates 
that this increase will not have a significant impact on 
overall U.S. imports because it will be offset by reduced 
levels of imports from other nations.
    In addition, the Agreement contains a special textile 
safeguard, which allows either party to re-impose tariffs that 
were in place before the agreement if imports from the other 
party cause or threaten to cause serious damage to the domestic 
industry. Furthermore, the FTA has special, state-of-art 
customs enforcement and cooperation provisions for textiles, 
allowing the customs authorities of the parties to verify 
production and ultimately to deny duty preferences or entry if 
production cannot be authenticated.
    The Committee believes that maintaining a current short 
supply list under the FTA is integral to the effective 
functioning of the rule of origin for textiles and apparel. The 
Committee expects the President to seek to incorporate all 
existing and future affirmative short supply determinations 
from other trade agreements and trade preference programs into 
the textile and apparel rule of origin for this FTA. Moreover, 
given that prior short supply designations have already 
undergone public comment and consultation with domestic 
parties, the President should apply those designations to this 
FTA without further public investigation. Finally, the 
Committee clarifies that the short supply provision included in 
this FTA, as well as previous FTAs and trade preference 
programs enacted by Congress, contemplates items only being 
added to the list of short supply items, with a limited 
exception in the Dominican Republic-Central America FTA (DR-
CAFTA). In other words, once an item is designated as being in 
short supply, the item is permanently designated as such unless 
otherwise provided for by the statute implementing the FTA or 
trade preference program. Indeed, the fact that Congress 
specifically designated procedures for removal of products from 
the list in DR-CAFTA signifies that the authority to do so does 
not exist in implementing legislation or trade preference 
programs where that authority is not explicitly provided, such 
as this FTA.
    Furthermore, the Committee expects that all short supply 
parties will be able to participate in an open and transparent 
process. Specifically, Committee for the Implementation of 
Textile Agreements (CITA) should publish procedures that 
clearly explain the criteria it uses to make its determinations 
on whether and why a good is or is not available in commercial 
quantities. At the very least, when CITA determines that a good 
is available in commercial quantities, a sample of the good 
should be readily available for physical inspection by all 
parties as well as by evidence of some effort to market the 
good in the United States. Moreover, all parties should have 
open access to the full evidence being considered by CITA as 
well as the opportunity to respond to the full evidence before 
a determination is made.
    Services.--Under the Agreement, Oman will accord broad 
market access across its services industries and will provide 
increased market access and regulatory transparency in most 
industries. The Agreement utilizes the negative list approach 
for coverage with very few reservations, which means that all 
services are covered except those few specifically excluded.The 
few exceptions taken by Oman include areas such as employment 
placement, internal waterway transport, investigation and security, 
licensed tour guides, real estate brokerage, specialty air service, and 
taxi cabs. The Agreement offers new access in key sectors such as 
audiovisual, express delivery, telecommunications, computer and related 
services, distribution, healthcare, services incidental to mining, 
construction, architecture, and engineering. Benefits are provided for 
businesses that wish to supply services cross-border (for example, by 
electronic means over the Internet) as well as those that wish to 
establish a local presence in Oman. In particular, U.S. financial 
service providers will have the right to establish subsidiaries, 
branches, and joint ventures inside Oman. The Agreement provides new 
opportunities for U.S. managers, professionals, and specialty personnel 
by removing requirements that U.S. companies hire Omanis for these 
positions. The ITC report on the Agreement states that the Agreement 
will provide additional market access to U.S. services firms and that 
these firms and their affiliates in Oman will likely benefit from the 
improved transparency and market access.
    The agreement does not allow any foreign entity to control, 
manage, or operate any U.S. port, and this function remains the 
responsibility of U.S. port authorities. The Agreement, like 
previous FTAs, simply treats Omani landside service suppliers 
and investors no less favorably than U.S. landside service 
providers. Any such service providers are still subject to a 
rigorous security review because the Agreement does not 
circumvent the Exon-Florio Act's Committee on Foreign 
Investment in the United States (CFIUS) process, which 
authorizes the President to block any proposed foreign 
investment in the United States that threatens U.S. national 
security. If the President were to block a transaction on these 
grounds, it would be consistent with the Agreement. Finally, 
the Agreement contains an explicit and self-judging exception 
under the Agreement's Article 21.2 allowing a country to take 
actions or deny benefits to protect its essential security 
interests.
    Investment.--The Agreement contains an investor-state 
provision, which allows investors alleging a breach in 
investment obligations to seek binding arbitration with Oman 
directly, giving U.S. foreign investors enhanced protections. 
These provisions level the playing field for U.S. investors by 
giving them legal protections in Oman comparable to the 
protections that foreign investors already receive in the 
United States.
    The investment language in the Agreement follows the 
guidance set forth in TPA, which states that foreign investors 
in the United States should not be accorded ``greater 
substantive rights'' than those afforded to U.S. investors in 
the United States. While the procedures for resolving disputes 
between a foreign investor and a government may differ from the 
procedures for resolving disputes between a domestic investor 
and a government, the Committee notes that the substantive 
standards in the Agreement are essentially the same as those 
found in the U.S. Constitution. Specifically, the Agreement's 
investment provisions are modeled after the Takings, Due 
Process and Equal Protections provisions of the U.S. 
Constitution, the Administrative Procedures Act, and other U.S. 
laws.
    The Committee believes that there have been significant 
misrepresentations about investment protection provisions in 
this and other free trade agreements. Nothing in this Agreement 
or any other U.S. free trade agreement or bilateral investment 
treaty interferes with a state or local government's right to 
regulate. An investor cannot enjoin regulatory action through 
arbitration, nor can arbitral tribunals. Also, the Agreement 
makes improvements over former FTAs by incorporating standards 
in the expropriation provisions drawn directly from U.S. 
Supreme Court decisions and by taking regulatory interests 
fully into account. Consistent with U.S. law, for example, the 
Agreement's text specifies that nondiscriminatory regulatory 
actions designed and applied to protect the public welfare do 
not constitute indirect expropriations ``except in rare 
circumstances.'' Moreover, the arbitration process under the 
Agreement is more open and transparent, and hearings and 
documents are public, and amicus curiae submissions are 
expressly authorized.
    Building on the NAFTA experience, the Agreement's 
investment chapter includes checks to help ensure that 
investors cannot abuse the arbitration process. The Agreement 
includes a special provision (based on U.S. court rules) that 
allows tribunals to dismiss frivolous claims at an early stage 
of the proceedings, and it expressly authorizes awards of 
attorneys' fees and costs if a claim is found to be frivolous.
    The Committee believes that the allegations and anti-trade 
rhetoric surrounding NAFTA Chapter 11 investor-state cases are 
exaggerated. The United States has never lost a single case 
under NAFTA or any other FTA or bilateral investment treaty, 
nor has the United States ever paid to settle such a case.
    Labor and Environment.--Labor and environmental obligations 
are part of the core text of the trade agreement, consistent 
with Trade Promotion Authority requirements, and are similar to 
provisions in prior FTAs. The Agreement states that both 
parties shall ensure that their domestic labor laws provide for 
labor standards consistent with internationally recognized 
labor principles, and that environmental laws provide for high 
levels of environmental protection. The Agreement also provides 
that parties shall strive to continue to improve such laws. The 
Agreement states that it is inappropriate to weaken or reduce 
domestic labor or environmental protections to encourage trade 
or investment. The core commitment--that a party shall not fail 
to effectively enforce its labor or environmental laws, through 
a sustained or recurring course of action or inaction, in a 
manner affecting trade between the parties--is subject to 
dispute settlement under the Agreement. Oman and the United 
States will pursue a number of cooperative projects to promote 
environmental protection, and both governments will utilize a 
Memorandum of Understanding on Environmental Cooperation to 
prioritize environmental projects and develop plans of action. 
The Agreement contains a cooperative mechanism to promote 
respect for the principles embodied in the International Labor 
Organization (ILO) Declaration on Fundamental Principles and 
Rights at Work, and compliance with ILO Convention 182 on the 
Worst Forms of Child Labor.
    Oman has undertaken significant labor and governance 
reforms. In 2003 Oman issued a new labor law (Royal Decree No. 
35), which removes a 1973 ban on strikes and protects the 
rights of foreign and national workers to establish 
representative committees with collective bargaining powers. In 
the context of Congressional consideration of the Agreement, 
Committee Members of both parties asked that Oman look to 
Bahrain as a model in terms of the labor commitments needed to 
secure broad, bipartisan support.
    By any measure, Oman has met or exceeded the example and 
commitments of Bahrain that helped the Bahrain FTA obtain the 
largest number of votes in the House of Representatives of any 
FTA considered under Trade Promotion Authority. During the 
Committee's markup of the Agreement's implementing legislation, 
Assistant USTR for Europe and the Middle East Shaun Donnelly 
stated that, compared with Bahrain, the overall Omani labor 
commitment is stronger and that based on his knowledge, it is 
fair to say that Oman has made a more dramatic commitment to 
labor reform than any government which has entered into such an 
agreement with the United States. The Committee believes that 
Oman has provided extensive answers, commitments, and materials 
to respond to and address every substantive issue raised by 
Committee Members. As described in the letters from the Omani 
government included as part of this report, Oman, like Bahrain, 
has committed to extensive labor reforms, including:
           Strengthening its collective bargaining 
        laws;
           Ensuring that workers have the option of 
        reinstatement for improper termination due to union 
        activity;
           Allowing more than one worker representative 
        committee per enterprise;
           Allowing more than one federation or 
        representative group for individual worker 
        representative committees and removing requirement that 
        each representative committee belong to the current 
        Main Representative Committee;
           Ensuring that penalties for anti-union 
        discrimination are sufficient to deter such 
        discrimination;
           Ensuring that technical standards for 
        strikes do not exceed the requirements of the ILO;
           Providing for notice to impacted groups of 
        changes to its labor laws and interim application of 
        principles under existing law; and
           Ensuring that its commitments are reviewable 
        under the FTA consultation mechanism.
    In addition, Oman has made further commitments:
           Strengthening efforts against forced labor;
           Taking action to stop the withholding of 
        foreign workers' documents;
           Strengthening efforts against child labor; 
        and
           Removing all government involvement in 
        representative committees' activities.
Overall, while many of Bahrain's commitments involved only 
submitting legislation to its parliament, Oman has pledged to 
enact all of these reforms by a date certain: October 31, 2006. 
Oman has already taken major action ahead of schedule by 
enacting a Royal Degree on July 8, 2006 (described in a July 
12, 2006 letter from the Omani Ambassador) that addressed its 
commitments in the following areas:
           Strengthening its collective bargaining 
        laws;
           Allowing more than one union per enterprise;
           Specifying penalties for anti-union 
        discrimination;
           Reinforcing the right to strike;
           Removing all government involvement in union 
        activity;
           Strengthening efforts against forced labor;
           Prohibiting the withholding of travel 
        documents by employers of foreign workers; and
           Strengthening efforts against child labor.
In her letter, the Omani Ambassador reaffirmed her commitment 
to fulfilling all remaining commitments by the October 31 
deadline. The Committee believes that Oman's pledges and 
concrete action demonstrate Oman's commitment to move rapidly 
on these issues, while abiding by its legislative process and 
rule of law, including through consulting with interested 
parties, such as Omani labor groups and the ILO, as several 
Committee Members have specifically requested.
    In addition, United States Ambassador to Oman Gary Grappo 
conducted an extensive review of the labor situation on the 
ground in Oman and issued on June 21, 2006 a letter stating 
that Oman is already ``complying with ILO core labor standards 
in practice, if not yet in law.'' This finding was based on an 
examination of the major areas raised as concerns regarding 
Oman's labor laws. For example, in the key area of government 
involvement in labor matters, the Ambassador stated that in 
``regards to the perceived government interference in the labor 
committees, let me be firm in assuring you that the Ministry of 
Manpower (MOM) is not intrusively overseeing labor union 
representative committee activities . . . and that the actual 
application of the law is already ILO-consistent.'' In 
contrast, Bahrain provided no such showing that the application 
of its laws was already ILO-consistent. In fact contrary to 
claims by some, Bahrain made no commitment to apply all of its 
laws in an ILO-consistent manner until changes were made to its 
laws. Finally, Oman, like Bahrain, has agreed to have all of 
its commitments fully verifiable under the Agreement's labor 
consultation mechanisms.
    The Committee finds that after Oman's extensive good faith 
actions to address every substantive labor issue raised by the 
Committee and make verifiable commitments that meet or exceed 
the standard of Bahrain, it would be unreasonable on the basis 
of labor issues to fail to provide the same support for the 
Oman Agreement as provided for the Bahrain Agreement. Changing 
the standard on one of our strongest allies in the Middle East 
on the basis that Congress could not trust its labor 
commitments would send a disturbing signal to the people of the 
Middle East, to allies of the United States around the world, 
and to Americans who rely on our responsible exercise of trade 
and foreign policy to strengthen the U.S. economy and protect 
our citizens.
    Dispute Settlement.--The Agreement sets out detailed 
procedures for the resolution of disputes over compliance, with 
high standards of openness and transparency. Dispute settlement 
procedures promote compliance through consultation and trade-
enhancing remedies, rather than relying solely on trade 
sanctions. The Agreement's dispute settlement procedures also 
provide for ``equivalent'' remedies for commercial and labor/
environmental disputes, in keeping with TPA requirements. In 
addition to the use of trade sanctions in commercial disputes, 
the Agreement provides the parties the option of using monetary 
assessments to enforce commercial, labor, and environmental 
obligations of the Agreement, with the possibility that 
assessments from labor and environmental cases may be used to 
fund labor and environmental initiatives. If a party does not 
pay its annual assessment in a labor or environmental dispute, 
the complaining party may suspend tariff benefits, while 
bearing in mind the objective of eliminating barriers to trade 
and while seeking not to unduly affect parties or interests not 
party to the dispute.
    Access to Medicines.--The Agreement provides protections 
for developers and manufacturers of innovative pharmaceutical 
drugs consistent with U.S. law and recent trade agreements. 
Consistent with the WTO TRIPs Agreement, parties must provide 
that a drug innovator's data submitted for the purpose of 
obtaining marketing approval for a new drug be protected from 
use by competitors for five years. The Agreement expressly 
states that nothing in the intellectual property chapter 
affects the countries' ability to protect public health. Nor 
will the Agreement prevent effective utilization of the recent 
WTO consensus allowing developing countries that lack 
pharmaceutical manufacturing capacity to import drugs under 
compulsory licenses.
    Stronger patent and data protection increases the 
willingness of companies to release innovative drugs in the 
markets of free trade partners, potentially increasing, rather 
than decreasing, the availability of medicines. For example, 
the U.S.-Jordan FTA, signed in 2000, contained an intellectual 
property chapter that covered data protection. As a result of 
the FTA and effective IP protection, a large number of 
innovative products have been registered since the FTA went 
into force. Between 1995-1999, only 25 new pharmaceuticals 
products were registered, but since 2000, at least 65 new 
products have been registered. Moreover, data protection for 
more than 50 innovative products has now expired, and these 
products are now being produced and exported by the local 
manufacturers. In fact, the Jordanian generic pharmaceutical 
sector is flourishing, as evidenced by a significant increase 
in exports. In 2004 the local industry generated at least $224 
million, a 21% increase from the year 2003. In 2005, this 
figure increased by 25%, to $281 million. Pharmaceuticals were 
Jordan's second largest export in 2005. Also, since the 
enactment of the FTA, the Jordanian drug industry has begun to 
develop its own innovative medicines. The Committee emphasizes 
that the Jordan case is an example of how strong intellectual 
property protection can bring substantial benefits to 
developing countries.
    Intellectual Property Rights.--Because the WTO agreement in 
intellectual property contains only rudimentary intellectual 
property protection requirements, bilateral free trade 
agreements are an important means of raising international 
practices to the higher U.S. standards. The U.S.-Oman FTA 
requires no change to the already highly developed U.S. law and 
practice. According to the Industry Trade Advisory Committee on 
Intellectual Property (ITAC 15), the U.S.-Oman FTA reflects the 
``highest standards of protection'' of any of the FTAs 
negotiated to date in the areas of trademarks, geographical 
indications, copyrights, and enforcement. U.S. authors, 
performers, inventors, and other producers of creative material 
will benefit from the higher and extended standards that the 
FTA requires of Oman for protecting intellectual property 
rights such as copyrights, patents, trademarks, and trade 
secrets as well as enhanced means of enforcing those rights. 
Each partner country must grant national treatment to nationals 
of the other, and all laws, regulations, procedures, and final 
judicial decisions must be in writing and published or made 
publicly available. The Agreement lengthens terms for copyright 
protection, covering electronic and digital media, and 
increases enforcement to go beyond WTO obligations. Each party 
is obliged to provide appropriate civil and criminal remedies 
for willful violators, and parties must provide legal 
incentives for services providers to cooperate with rights 
holders as well as limitations on liability.
    Government Procurement.--Oman is not a party to the WTO 
Agreement on Government Procurement, but the U.S.-Oman FTA 
provides comparable benefits to U.S. interests, putting them at 
an advantage over other U.S. trading partners. Specifically, 
the Agreement grants non-discriminatory rights to bid on most 
contracts offered by Oman's ministries, agencies, and 
departments. It calls for transparent and fair procurement 
procedures including clear advanced notice of purchases and 
effective review. The parties are obliged to make bribery a 
criminal offense in matters affecting international trade and 
investment.
    The 9/11 Commission Report Recommendations.--The 9/11 
Commission Report specifically noted the importance of the FTAs 
signed with nations in the Middle East, stating that they are 
``models [that] are drawing the interest of their neighbors.'' 
Citing the Administration's strategy for creating a Middle East 
Free Trade Area (MEFTA), the 9/11 Commission specifically 
recommended that a ``comprehensive U.S. strategy to counter 
terrorism should include economic policies that encourage 
development, more open societies, and opportunities for people 
to improve the lives of their families and to enhance prospects 
for their children's future.''
    U.S.-Oman Cooperation in the War on Terror and 
International Security.--Oman has long been a committed ally of 
the United States. The United States signed a treaty of 
friendship with Oman in 1833, one of the first of its kind with 
an Arab state. On April 21, 1980, just after the Iranian 
Islamic Revolution, Oman became the first Persian Gulf state to 
formalize defense relations with the United States, allowing 
U.S. forces access to Omani military facilities. That agreement 
was renewed in 2000 for ten years. Oman's facilities made 
significant contributions to recent major U.S. combat 
operations in Afghanistan (Operation Enduring Freedom, OEF) and 
Iraq (Operation Iraqi Freedom, OIF). There were approximately 
4,300 U.S. personnel in Oman during OEF and approximately 3,750 
U.S. personnel in Oman during OIF. During these operations, 
Omani military facilities served as important logistical hubs 
and launch points for Air Force missions that helped protect 
U.S. servicemen and support U.S. foreign policy objectives.
    After the terrorist attacks of September 11, 2001, Oman 
issued new laws to prevent terrorist organizations from raising 
or laundering money in Oman. The State Department's report on 
global terrorism for 2004 noted that Oman has established 
systems to identify unusual transactions and that Oman has 
demonstrated a commitment to freeze assets of suspected Al 
Qaeda members and other terrorists. On November 22, 2005, Oman 
joined the U.S. Container Security Initiative, agreeing to the 
prescreening of U.S.-bound cargo from the port of Salalah.
    Political and Economic Reforms.--Under the government of 
Sultan Qaboos, Oman has been expanding political liberalization 
in Oman since the 1980s. In 1991, the Sultan established the 
Consultative Council, and in 2000 the Council held its first 
elections. Voting rights in the 2003 Consultative Council 
elections were extended to all citizens over the age of 21, 
increasing the number of eligible voters from the 2000 
elections, during which the electorate consisted of only 25 
percent of all citizens over 21. Women are allowed to run for 
seats in the Council, and the Sultan of Oman has appointed a 
number of women to cabinet positions and to the Sultan-
appointed State Council. In 2004, Sultan Qaboos named five 
women as appointees to the office of the public prosecutor, 
making Oman unique in the Gulf for appointing women to the 
judiciary. In addition, Oman in 2005 became the first Arab 
state to name a female ambassador to the United States.
    Among Gulf Cooperation Council countries (Bahrain, Kuwait, 
Oman, Qatar, Saudi Arabia, and the United Arab Emirates), Oman 
has the second highest percentage of oil-based GDP (40%), yet 
Oman's oil reserves could be exhausted within fifteen or twenty 
years. Given this situation, Oman has been acting to open and 
expand its economy beyond oil and gas exports. The Economic 
Freedom of the World 2005 report published by Canada's Fraser 
Institute ranks Oman 17th of the 127 countries analyzed in 
terms of economic freedom, and as the second highest among the 
proposed Middle East Free Trade Area (MEFTA) countries. The 
Omani Center for Investment Promotion and Export Development 
was opened in 1997 to smooth the path for business formation 
and private sector project development. The permitted level of 
foreign ownership in privatization projects increased to 100 
percent in July 2004, based on a Royal Decree providing an 
updated privatization framework.
    Arab League Boycott of Israel.--Oman has been a leader in 
the Persian Gulf in establishing trade and other ties with 
Israel. In September 1994, Oman renounced its secondary and 
tertiary boycotts of Israel. The secondary boycott bans 
entities in the Arab League States where it applies from doing 
business with firms that contribute to Israel's military or 
economic development, while the tertiary boycott deals with the 
injunction on Arab countries from doing business with firms 
that are blacklisted because of their ties to Israel. On 
December 26, 1994, Oman became the first Gulf State to host an 
Israeli Prime Minister. Oman has also eliminated all aspects of 
the primary (direct) boycott of Israel, and when Oman acceded 
to the WTO in 2000, it did not request an exemption for Israel 
that would allow it to maintain a boycott.
    In the context of Congressional consideration of the U.S.-
Oman FTA, Oman has reiterated its commitment to not enforce any 
aspect of a boycott on Israel, in letters on September 28, 2005 
and June 15, 2006. In addition, in June 2006 Oman issued an 
official government circular to its relevant agencies 
reiterating this policy and commitment.

II. TPA Procedures

    As noted above, this legislation is being considered by 
Congress under TPA procedures. As such, the Agreement has been 
negotiated by the President in close consultation with 
Congress, and it can be approved and implemented through 
legislation using streamlined procedures. Pursuant to TPA 
requirements, the President is required to provide written 
notice to Congress of the President's intention to enter into 
the negotiations. Throughout the negotiating process and prior 
to entering into an agreement, the President is required to 
consult with Congress regarding the ongoing negotiations.
    The President must notify Congress of his intent to enter 
into a trade agreement at least 90 calendar days before the 
agreement is signed. Within 60 days after entering into the 
agreement, the President must submit to Congress a description 
of those changes to existing laws that the President considers 
would be required to bring the United States into compliance 
with the agreement. After entering into the agreement, the 
President must also submit to Congress the formal legal text of 
the agreement, draft implementing legislation, a statement of 
administrative action proposed to implement the agreement, and 
other related supporting information as required under section 
2105(a) of TPA. Following submission of these documents, 
theimplementing bill is introduced, by request, by the Majority Leader 
in each chamber. The House then has up to 60 days to consider 
implementing legislation for the agreement (the Senate has up to an 
additional 30 days). No amendments to the legislation are allowed under 
TPA requirements.

                         C. Legislative History

    On November 15, 2004, the President first notified Congress 
of his intent to negotiate an FTA with Oman. FTA negotiations 
between the United States and Oman began in March 2005 and 
concluded in October 2005. During and after the negotiations, 
the President continued his consultations with Congress 
pursuant to the letter and spirit of the TPA requirements. On 
October 17, 2005, the President notified the Congress of his 
intent to enter into an FTA with Oman. Under TPA procedures, 
the President is able to sign an FTA ninety calendar days after 
he has notified Congress. On January 19, 2006, then-U.S. Trade 
Representative Rob Portman signed the U.S.-Oman FTA.
    On April 5, 2006, the Committee on Ways and Means held a 
hearing on the United States-Oman FTA. The Committee received 
testimony supporting the Agreement from the Administration and 
U.S. private sector entities. On May 10, 2006, the Committee on 
Ways and Means considered in an informal markup session draft 
legislation to implement the Oman FTA. The Committee approved 
the draft implementing legislation by a recorded vote of 23 
yeas to 15 nays with 3 Members voting present, without 
amendment.
    During the Finance's Committee's non-markup of the Oman FTA 
implementing legislation, the Finance Committee voted to 
recommend that the bill included language, known as the Conrad 
Amendment, to ban under the Agreement products made from forced 
labor. No Member of the Ways and Means Committee proposed 
similar language during the Committee's informal markup, and 
appropriately the Committee recommended that the version of the 
bill voted on by the Ways and Means Committee be used by USTR. 
As was done when the Finance and Ways and Means Committees 
recommended different language for the implementing legislation 
or Statements of Administrative Actions for the U.S.-Australia 
FTA, the U.S.-Dominican Republic Central America FTA, and the 
U.S.-Bahrain FTA, USTR received the views of the two Committees 
and made a determination. Using the standard adopted by the Way 
and Means committee under TPA, USTR properly determined that 
the Conrad Amendment was not ``necessary or appropriate'' to 
implement the bill and could not be included in the bill it 
submitted to Congress. In making this determination, USTR noted 
that the Conrad Amendment duplicates existing law which already 
imposes a ban on goods made from forced labor. Instead of 
including the Conrad Amendment language, USTR agreed to 
specific language in the Statement of Administrative Action 
stating that the Administration would ``update the Congress 
periodically on the progress that Oman achieves in realizing 
all commitments made to labor law reform,'' citing the May 8, 
2006 letter from the Minister of Commerce and Industry of Oman 
to then-USTR Portman.
    In accordance with TPA requirements, President Bush 
submitted to Congress on February 28, 2006, a description of 
the changes to existing U.S. laws that would be required to 
bring the United States into compliance with the Agreement.
    On June 26, 2006, President Bush formally transmitted to 
Congress the formal legal text of the United States-Oman FTA, 
implementing legislation, a statement of administrative action 
proposed to implement the Agreement, and other related 
supporting information as required under section 2105(a) of 
TPA. Following this transmittal, on June 26, 2006, Majority 
Leader John Boehner introduced, by request, H.R. 5684 to 
implement the United States-Oman FTA. The bill was referred to 
the Committee on Ways and Means.
    On June 29, 2006, the Committee on Ways and Means formally 
met to consider H.R. 5684. The Committee ordered H.R. 5684 
favorably reported to the House of Representatives by a 
recorded vote of 23 yeas to 15 nays; under the requirements of 
TPA, amendments were not permitted.

                     II. SECTION-BY-SECTION SUMMARY


                TITLE I: APPROVAL AND GENERAL PROVISIONS


               SECTION 101: APPROVAL AND ENTRY INTO FORCE

Current law

    No provision.

Explanation of provision

    Section 101 states that Congress approves the Agreement and 
the Statement of Administrative Action and provides that the 
Agreement enters into force when the President determines that 
Oman is in compliance and has exchanged notes, on or after 
January 1, 2007.

Reason for change

    Approval of the Agreement and the Statement of 
Administrative Action is required under the procedures of 
section 2103(b)(3) of the Bipartisan Trade Promotion Authority 
Act of 2002. The remainder of section 101 provides for entry 
into force of the Agreement.

    SECTION 102: RELATIONSHIP OF THE AGREEMENT TO U.S. AND STATE LAW

Current law

    No provision.

                        EXPLANATION OF PROVISION

    Section 102 provides that U.S. law is to prevail in a 
conflict and states that the Agreement does not preempt state 
rules that do not comply with the Agreement. Only the United 
States is entitled to bring a court action to resolve a 
conflict between a state law and the Agreement.

Reason for change

    Section 102 is necessary to make clear the relationship 
between the Agreement and federal and state law, respectively.

 SECTION 103: IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE 
                        AND INITIAL REGULATIONS

Current law

    No provision.

Explanation of provision

    Section 103(a) provides that after the date of enactment, 
the President may proclaim actions and issue regulations as 
necessary to ensure that any provision of this Act that takes 
effect on the date that the Agreement is entered into force is 
appropriately implemented, but not before the date the 
Agreement enters into force.
    Section 103(b) establishes that regulations necessary or 
appropriate to carrying out the actions proposed in the 
Statement of Administrative Action shall, to the maximum extent 
feasible, be issued within one year of entry into force or the 
effective date of the provision.

Reason for change

    Section 103 provides for the issuance of regulations. The 
Committee strongly believes that regulations should be issued 
in a timely manner to provide maximum clarity to parties 
claiming benefits under the Agreement. As noted in the 
Statement of Administrative Action, the regulation-issuing 
agency will provide a report to Congress not later than thirty 
days before one year elapses on any regulation that is going to 
be issued later than one year.

      SECTION 104: CONSULTATION AND LAYOVER FOR PROCLAIMED ACTIONS

Current law

    No provision.

Explanation of provision

    Section 104 provides that if the President implements 
proclamation authority subject to consultation and layover, the 
President may proclaim action only after he has: obtained 
advice from the International Trade Commission and the 
appropriate private sector advisory committees; submitted a 
report to the Ways and Means and Finance Committees concerning 
the reasons for the action; and consulted with the Committees. 
The action takes effect after 60 days have elapsed.

Reason for change

    The bill gives the President certain proclamation authority 
but requires extensive consultation with Congress before such 
authority may be exercised. The Committee believes that such 
consultation is an essential component of the delegation of 
authority to the President and expects that such consultations 
will be conducted in a thorough manner.

     SECTION 105: ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS

Current law

    No provision.

Explanation of provision

    Section 105 authorizes the President to establish an office 
within the Commerce Department responsible for providing 
administrative assistance to any panels that may be established 
under chapter 20 of the Agreement and authorizes appropriations 
for the office and for payment of the U.S. share of expenses.

Reason for change

    The Committee believes that the Department of Commerce is 
the appropriate agency to provide administrative assistance to 
panels.

                   SECTION 106: ARBITRATION OF CLAIMS

Current law

    No provision.

Explanation of provision

    Section 106 authorizes the United States to resolve certain 
claims covered by the Investor-State Dispute Settlement 
Procedures set forth in the Agreement.

Reason for change

    This provision is necessary to meet U.S. obligations under 
section B of chapter 10 of the Agreement.

          SECTION 107: EFFECTIVE DATES; EFFECT OF TERMINATION

Current law

    No provision.

Explanation of provision

    The effective date of the Act is the date the Agreement 
enters into force with respect to the United States, except 
sections 1 through 3 and Title I take effect upon the date of 
enactment. The provisions of the Act terminate on the date on 
which the Agreement terminates.

Reason for change

    Section 107 implements U.S. obligations under the 
Agreement.

                      TITLE II: CUSTOMS PROVISIONS


                   SECTION 201: TARIFF MODIFICATIONS

Current law

    No provision.

Explanation of provision

    Section 201(a) provides the President with the authority to 
proclaim tariff modifications to carry out the Agreement and 
requires the President to terminate Oman's designation as a 
beneficiary developing country for the purposes of the 
Generalized System of Preferences program.
    Section 201(b) gives the President the authority to 
proclaim further tariff modifications, subject to consultation 
and layover, as the President determines to be necessary or 
appropriate to maintain the general level of reciprocal and 
mutually advantageous concessions with respect to Oman provided 
for by the Agreement.
    Section 201(c) allows the President, for any goods for 
which the base rate is a specific or compound rate of duty, to 
substitute for the base rate an ad valorem rate to carry out 
the tariff modifications in subsections (a) and (b).

Reason for change

    Section 201(a) is necessary to put the United States in 
compliance with the market access provisions of the Agreement. 
Section 201(b) gives the President flexibility to maintain the 
trade liberalizing nature of the Agreement. The Committee 
expects the President to comply with the letter and spirit of 
the consultation and layover provisions of this Act in carrying 
out this subsection. Section 201(c) allows the President to 
convert tariffs to ad valorem rates to carry out the tariff 
modifications in the Agreement.

                      SECTION 202: RULES OF ORIGIN

Current law

    No provision.

Explanation of provision

    Section 202 codifies the rules of origin set out in chapter 
4 of the Agreement. Under the general rules, there are four 
basic ways for a good of Oman to qualify as an ``originating 
good'' and therefore be eligible for preferential tariff 
treatment when it is imported into the United States. A good is 
an originating good if it is imported directly from the 
territory of Oman into the territory of the United States and: 
(1) it is ``wholly the growth, product, or manufacture of Oman 
or the United States, or both''; (2) it is a new or different 
good that has been ``grown, produced, or manufactured in Oman 
or the United States, or both'' and the value of the materials 
produced and the direct cost of processing operations performed 
in Oman or the United States, or both is not less than 35% of 
the appraised value of the good; (3) it satisfies certain rules 
of origin for textile or apparel goods specified in Annex 3-A 
of the Agreement; or (4) it satisfies certain product-specific 
rules of origin specified in Annex 4-A of the Agreement.
    Under the rules in chapter 3 and Annex 3-A of the 
Agreement, an apparel product must generally meet a tariff 
shift rule that implicitly imposes a ``yarn forward'' 
requirement. Thus, to qualify as an originating good imported 
into the United States from Oman, an apparel product must have 
been cut (or knit to shape) and sewn or otherwise assembled in 
Oman from yarn, or fabric made from yarn, that originates in 
Oman or the United States, or both. However, Article 3.2.9 
provides an exception to this general rule allowing access for 
50 million square meter equivalents of apparel that does not 
meet the yarn forward rule of origin for each of the first ten 
years of the Agreement. Section 202 also includes a de minimis 
exemption providing that in most cases a textile or apparel 
good will be considered originating if the total weight of all 
nonoriginating fibers or yarns is not more than 7 percent of 
the total weight of the good.
    The remainder of section 202 addresses valuation of 
materials and special definitions.

Reason for change

    Rules of origin are needed to confine Agreement benefits, 
such as tariff cuts, to Omani goods and to prevent third-
country goods from being transshipped through Oman and claiming 
benefits under the Agreement. Section 202 puts the United 
States in compliance with the rules of origin provisions of the 
agreement. The Committee notes that the limited exception to 
the textile and apparel yarn forward rule of origin is phased 
down over ten years and covers approximately 0.1 percent of 
U.S. textile and apparel imports by volume.

                     SECTION 203: CUSTOMS USER FEES

Current law

    Section 58c of the title 19 of the U.S. Code lays out 
various user fees applied by customs officials to imports, 
including the Merchandise Processing Fee (MPF), which is 
applied on an ad valorem basis subject to a cap.

Explanation of provision

    Section 203 of the bill implements U.S. commitments under 
article 2.9 of the Agreement, regarding the exemption of the 
merchandise processing fee on originating goods. This provision 
is similar to those included in the implementing legislation 
for the North American Free Trade Agreement, the U.S.-Singapore 
Free Trade Agreement, the U.S-Chile Free Trade Agreement, the 
U.S.-Australia Free Trade Agreement, the U.S-Dominican 
Republic-Central America-Free Trade Agreement, and the U.S.-
Bahrain Free Trade Agreement. The provision also prohibits the 
use of funds in the Customs User Fee Account to provide 
services related to the entry of originating goods, in 
accordance with U.S. obligations under the General Agreement on 
Tariffs and Trade 1994.

Reason for change

    As with other Free Trade Agreements, the Agreement 
eliminates the merchandise processing fee on qualifying goods 
from Oman. Other customs user fees remain in place. Section 203 
is necessary to put the United States in compliance with the 
user fee elimination provisions of the Agreement. The Committee 
expects that the President, in his yearly budget request, will 
take into account the need for funds to pay expenses for 
entries under the Agreement given that MPF funds will not be 
available.

SECTION 204: ENFORCEMENT RELATING TO TRADE IN TEXTILE AND APPAREL GOODS

Current law

    No provision.

Explanation of provision

    Section 204 implements the verification provisions of the 
Agreement at Article 3.3 and authorizes the President to take 
appropriate action while the verification is being conducted. 
Such appropriate action includes suspending liquidation of the 
textile or apparel good for which a claim of origin has been 
made or, in a case where the request for verification was based 
on a reasonable suspicion of unlawful activity related to such 
goods, for textile or apparel goods exported or produced by the 
person subject to a verification. If the Secretary of the 
Treasury determines that the information obtained from 
verification is insufficient to make a determination, the 
President may take appropriate action described in section 
204(d), including publishing the name and address of the person 
subject to the verification and denial of preferential 
treatment and denial of entry to certain textile and apparel 
goods produced or exported by the person subject to the 
verification.

Reason for change

    In order to ensure that only qualifying textile and apparel 
goods receive preferential treatment under the Agreement, 
special textile enforcement provisions are included in the 
Agreement. Section 204 is necessary to authorize these 
enforcement mechanisms for use by U.S. authorities.

                 SECTION 205: RELIQUIDATION OF ENTRIES

Current law

    No provision.

Explanation of provision

    Section 205 implements article 4.11.4 of the Agreement and 
provides authority for the Customs Service to reliquidate an 
entry to refund any excess duties (including any merchandise 
processing fees) paid on a good qualifying under the rules of 
origin for which no claim for preferential tariff treatment was 
made at the time of importation if the importer so requests, 
within one year after the date of importation.

Reason for change

    Article 4.11.4 of the Agreement anticipates that private 
parties may err in claiming preferential benefits under the 
Agreement and provides a one-year period for parties to make 
such claims for preferential tariff treatment even if the entry 
of the goods at issue has already been liquidated, i.e., 
legally finalized by customs officials. Section 205 is 
necessary to put the United States into compliance with article 
4.11.4 of the Agreement.

                        SECTION 206: REGULATIONS

Current law

    No provision.

Explanation of provision

    Section 206 provides that the Secretary of the Treasury 
shall issue regulations to carry out provisions of this bill 
related to rules of origin and customs user fees.

Reason for change

    Because the implementing bill involves lengthy and complex 
implementation procedures by customs officials, section 206 is 
necessary in order to authorize the Secretary of the Treasury 
to carry out provisions of the implementing bill through 
regulations.

                     TITLE III: RELIEF FROM IMPORTS


Subtitle A: Relief from imports benefiting from the agreement (sections 
        311-316)

Current law

    No provision.

Explanation of provision

    Sections 311-316 authorize the President, after an 
investigation and affirmative determination by the U.S. 
International Trade Commission (ITC) or a determination that 
the President may consider to be affirmative under paragraph 
(1) of section 330(d) of the Tariff Act of 1930 (19 U.S.C. 
1330(d)), to impose specified import relief when, as a result 
of the reduction or elimination of a duty under the Agreement, 
an Omani product is being imported into the United States in 
such increased quantities and under such conditions as to be a 
substantial cause of serious injury or threat of serious injury 
to the domestic industry.
    Section 311(c) defines ``substantial cause'' and applies 
factors in making determinations in the same manner as section 
202 of the Trade Act of 1974.
    Section 311(d) exempts from investigation under this 
section Omani articles for which import relief has been 
provided under this safeguard since the Agreement entered into 
force.
    Under sections 312(b) and (c), if the ITC makes an 
affirmative determination, it must find and recommend to the 
President the amount of import relief that is necessary to 
remedy or prevent serious injury and to facilitate the efforts 
of the domestic industry to make a positive adjustment to 
import competition.
    Under section 313(a), the President shall provide import 
relief to the extent that the President determines is necessary 
to remedy or prevent the injury found by the ITC and to 
facilitate the efforts of the domestic industry to make a 
positive adjustment to import competition.
    Under section 313(b), the President is not required to 
provide import relief if the President determines that the 
relief will not provide greater economic and social benefits 
than costs.
    Section 313(c) sets forth the nature of the relief that the 
President may provide as: a suspension of further reductions 
for the article; or an increase to a level that does not exceed 
the lesser of the existing NTR/MFN rate or the NTR/MFN rate 
imposed when the Agreement entered into force. Section 
313(c)(2) states that if the President provides relief for 
greater than one year, it must be subject to progressive 
liberalization at regular intervals over the course of its 
application.
    Section 313(d) states that the import relief that the 
President is authorized to provide may not, in the aggregate, 
exceed three years.
    Section 314 provides that no relief may be provided under 
this subtitle after ten years from the date on which the 
Agreement enters into force, unless the President determines 
under section 314(b) that Oman has consented to such relief.
    Section 315 authorizes the President to provide 
compensation to Oman consistent with article 8.3 of the 
Agreement.
    Section 316 provides for the treatment of confidential 
business information.

Reason for change

    The Committee believes that it is important to have in 
place a temporary, extraordinary mechanism if a U.S. industry 
experiences injury by reason of increased import competition 
from Oman in the future, with the understanding that the 
President is not required to provide relief if the relief will 
not provide greater economic or social benefits than costs. The 
Committee intends that administration of this safeguard be 
consistent with U.S. obligations under chapter 8 (Safeguards) 
of the Agreement.

Subtitle B: Textile and apparel safeguard (sections 321-328)

Current law

    No provision.

Explanation of provision

    Section 321 provides that a request for safeguard relief 
under this subtitle may be filed with the President by an 
interested party. The President is to review the request and 
determine whether to commence consideration of the request. If 
the President determines to commence consideration of the 
request, he is to publish a notice commencing consideration and 
seeking comments. The notice is to include a summary of the 
request.
    Section 322(a) of the Act provides for the President to 
determine, pursuant to a request by an interested party, 
whether, as a result of the elimination of a duty provided 
under the Agreement, an Omani textile or apparel article is 
being imported into the United States in such increased 
quantities, in absolute terms or relative to the domestic 
market for that article, and under such conditions as to cause 
serious damage, or actual threat thereof, to a domestic 
industry producing an article that is like, or directly 
competitive with, the imported article.
    Section 322(b) identifies the relief that the President may 
provide, which is the lesser of the existing NTR/MFN rate or 
the NTR/MFN rate imposed when the Agreement entered into force.
    Section 323 of the bill provides that the period of relief 
shall be no longer than three years. The President may extend 
the relief if the initial period for relief was less than three 
years, but the aggregate period of relief, including 
extensions, may not exceed three years.
    Section 324 provides that relief may not be granted to an 
article under this safeguard if relief has previously been 
granted under this safeguard, or the article is subject to 
import relief under chapter 1 of title II of the Trade Act of 
1974.
    Under section 325, after a safeguard expires, the rate of 
duty on the article that had been subject to the safeguard 
shall be the rate that would have been in effect but for the 
safeguard action.
    Section 326 states that the authority to provide safeguard 
relief under this subtitle expires ten years after the date on 
which duties on the article are eliminated pursuant to the 
Agreement.
    Section 327 of the Act gives authority to the President to 
provide compensation to Oman if he orders relief.
    Section 328 provides for the treatment of confidential 
business information.

Reason for change

    The Committee intends that the provisions of subtitle B be 
administered in a manner that is in compliance with U.S. 
obligations under Article 3.1 of the Agreement. In particular, 
the Committee expects that the President will implement a 
transparent process that will serve as an example to our 
trading partners. For example, in addition to publishing a 
summary of the request for safeguard relief, the Committee 
notes that the President plans to make available the full text 
of the request, subject to the protection of business 
confidential data, on the Department of Commerce, International 
Trade Administration's website. In addition, the Committee 
encourages the President to issue regulations on procedures for 
requesting such safeguard measures, for making its 
determinations under section 322(a), and for providing relief 
under section 322(b).

                    TITLE IV: GOVERNMENT PROCUREMENT


Section 401: Eligible products

Current law

    U.S. procurement law (the Buy American Act of 1933 and the 
Buy American Act of 1988) discriminates against foreign 
suppliers of goods and services in favor of U.S. providers of 
goods and services. Most discriminatory purchasing provisions 
are waived if the United States is party to a bilateral or 
multilateral procurement agreement, such as the WTO Agreement 
on Government Procurement and the North American Free Trade 
Agreement.

Explanation of provision

    Section 401 implements chapter 9 of the Agreement and 
amends the definition of ``eligible product'' in section 308 of 
the Trade Agreements Act of 1979. As amended, section 308(4)(A) 
will provide that, for a party to United States-Oman Free Trade 
Agreement, an ``eligible product'' means ``a product or service 
of that country or instrumentality which is covered under that 
Agreement for procurement by the United States.''

Reason for change

    This provision implements U.S. obligations under chapter 9 
of the Agreement.

                       III. VOTE OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the vote of the Committee on Ways and Means in its 
consideration of the bill, H.R. 5684.

                       MOTION TO REPORT THE BILL

    The bill, H.R. 5684, was ordered favorably reported by a 
rollcall vote of 23-15 (with a quorum being present).

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................        X   ........  .........  Mr. Rangel.......  ........        X
Mr. Shaw.......................        X   ........  .........  Mr. Stark........  ........        X
Mrs. Johnson...................        X   ........  .........  Mr. Levin........  ........        X
Mr. Herger.....................        X   ........  .........  Mr. Cardin.......  ........        X
Mr. McCrery....................        X   ........  .........  Mr. McDermott....  ........        X
Mr. Camp.......................        X   ........  .........  Mr. Lewis (GA)...  ........        X
Mr. Ramstad....................        X   ........  .........  Mr. Neal.........  ........        X
Mr. Nussle.....................        X   ........  .........  Mr. McNulty......  ........        X
Mr. Johnson....................  ........  ........  .........  Mr. Tanner.......  ........        X
Mr. English....................        X   ........  .........  Mr. Becerra......  ........  ........
Mr. Hayworth...................        X   ........  .........  Mr. Doggett......  ........        X
Mr. Weller.....................        X   ........  .........  Mr. Pomeroy......  ........        X
Mr. Hulshof....................        X   ........  .........  Ms. Tubbs Jones..  ........        X
Mr. Lewis (KY).................        X   ........  .........  Mr. Thompson.....  ........        X
Mr. Foley......................        X   ........  .........  Mr. Larson.......  ........        X
Mr. Brady......................        X   ........  .........  Mr. Emanuel......  ........        X
Mr. Reynolds...................        X
Mr. Ryan.......................        X
Mr. Cantor.....................        X
Mr. Linder.....................        X
Mr. Beauprez...................        X
Ms. Hart.......................        X
Mr. Chocola....................        X
Mr. Nunes......................        X
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of this bill, H.R. 
5684, as reported: The Committee agrees with the estimate 
prepared by the Congressional Budget Office (CBO) which is 
included below.

    B. Statement Regarding New Budget Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that 
enactment of H.R. 5684 would reduce customs duty receipts due 
to lower tariffs imposed on goods from Oman.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following report prepared by the CBO 
is provided.

H.R. 5684--United States-Oman Free Trade Agreement Implementation Act

    Summary: H.R. 5684 would approve the free trade agreement 
between the government of the United States and the government 
of Oman that was entered into on January 19, 2006. It would 
provide for tariff reductions and other changes in law related 
to implementation of the agreement.
    The Congressional Budget Office estimates that enacting the 
bill would reduce revenues by $15 million in 2007, by $111 
million over the 2007-2011 period, and by $271 million over the 
2007-2016 period, net of income and payroll tax offsets. CBO 
estimates that enacting H.R. 5684 also would increase direct 
spending by $1 million in 2007, $6 million over the 2007-2011 
period, and $10 million over the 2007-2016 period. Further, CBO 
estimates that implementing the legislation would incur new 
discretionary spending of less than $1 million per year, 
assuming the availability of appropriated funds.
    CBO has determined that H.R. 5684 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would not directly 
affect the budgets of state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5684 over the 2007-2016 period is 
shown in the following table. The cost for spending under this 
legislation falls within budget function 750 (administration of 
justice).

----------------------------------------------------------------------------------------------------------------
                                                     By fiscal year, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2007    2008    2009    2010    2011    2012    2013    2014    2015    2016
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES

Changes in revenues.............     -15     -21     -23     -25     -26     -28     -30     -32     -34     -37
                                           CHANGES IN DIRECT SPENDING

Estimated budget authority......       1       1       1       1       1       1       1       1       0       0
Estimated outlays...............       1       1       1       1       1       1       1       1       0      0
----------------------------------------------------------------------------------------------------------------
Note.--Negative changes in revenues and positive changes in direct spending correspond to increases in budget
  deficits.

Basis of estimate

            Revenues
    Under the United States-Oman agreement, tariffs on U.S. 
imports from Oman would be phased out over time. The tariffs 
would be phased out for individual products at varying rates 
according to one of several different timetables ranging from 
immediate elimination on the date the agreement enters into 
force to gradual elimination over 10 years. According to the 
U.S. International Trade Commission, the United States 
collected about $20 million in customs duties in 2004 or $422 
million of imports from Oman. Those imports consist largely of 
various types of apparel articles and oils. Based on these 
data, CBO estimates that phasing out tariff rates as outlined 
in the U.S.-Oman agreement would reduce revenues by $15 million 
in 2007, by $111 million over the 2007-2011 period, and by $271 
million over the 2007-2016 period, net of income and payroll 
tax offsets.
    This estimate includes the effects of increased imports 
from Oman that would result from the reduced prices of imported 
products in the United States, reflecting the lower tariff 
rates. It is likely that some of the increase in U.S. imports 
from Oman would displace imports from other countries. In the 
absence of specific data on the extent of this substitution 
effect, CBO assumes that an amount equal to one-half of the 
increse in U.S. imports from Oman would displace imports from 
other countries.
            Direct spending
    This legislation would exempt certain goods imported from 
Oman from merchandise processing fees collected by the 
Department of Homeland Security. Such fees are recorded as 
offsetting receipts (a credit against direct spending). Based 
on the value of goods imported from Oman in 2005, CBO estimates 
that implementing this provision would reduce fee collections 
by about $1 million in fiscal year 2007 and in each year 
through 2014, for a total of $10 million over the 2007-2014 
period. There would be no effects in later years because the 
authority to collect merchandise processing fees expires at the 
end of 2014.
            Spending subject to appropriation
    Title I of H.R. 5684 would authorize the appropriation of 
necessary funds for the Department of Commerce to pay the 
United States share of the costs of the dispute settlement 
procedures established by the agreement. Based on information 
from the agency, CBO estimates that implementing this provision 
would cost less than $1 million per year, subject to the 
availability of appropriated funds.
    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Previous CBO estimate: On June 28, 2006, CBO transmitted a 
cost estimate of S. 3569, an identically titled bill ordered 
reported by the Senate Committee on Finance on June 28, 2006. 
The two bills are identical, as are CBO's estimates.
    Estimate prepared by: Federal revenues: Emily Schlect; 
Federal spending: Mark Grabowicz and Kim Cawley; Impact on 
state, local, and tribal governments: Melissa Merrell; Impact 
on the private sector: Craig Cammarata.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis; Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee, based on public hearing testimony and 
information from the Administration, concluded that it is 
appropriate and timely to consider the bill as reported. In 
addition, the legislation is governed by procedures of the 
Bipartisan Trade Promotion Authority Act of 2002.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill H.R. 5684 makes de minimis authorization of funding, and 
the Administration has in place program goals and objectives, 
which have been reviewed by the Committee.

                 C. Constitutional Authority Statement

    With respect to clause 3(d)(1) of rule XIII of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article 1 of the 
Constitution, Section 8 (`The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States.')

              D. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Act of 1995 (P.L. 104-4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

SECTION 13031 OF THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 
                                  1985


SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.

  (a) * * *
  (b) Limitations on Fees.--(1) * * *

           *       *       *       *       *       *       *

  (17) No fee may be charged under subsection (a) (9) or (10) 
with respect to goods that qualify as originating goods under 
section 202 of the United States-Oman Free Trade Agreement 
Implementation Act. Any service for which an exemption from 
such fee is provided by reason of this paragraph may not be 
funded with money contained in the Customs User Fee Account.

           *       *       *       *       *       *       *

                              ----------                              


                 SECTION 520 OF THE TARIFF ACT OF 1930


SEC. 520. REFUNDS AND ERRORS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Goods Qualifying Under Free Trade Agreement Rules of 
Origin.--Notwithstanding the fact that a valid protest was not 
filed, the Customs Service may, in accordance with regulations 
prescribed by the Secretary, reliquidate an entry to refund any 
excess duties (including any merchandise processing fees) paid 
on a good qualifying under the rules of origin set out in 
section 202 of the North American Free Trade Agreement 
Implementation Act, section 202 of the United States-Chile Free 
Trade Agreement Implementation Act, [or] section 203 of the 
Dominican Republic-Central America-United States Free Trade 
Agreement Implementation Act [for which], or section 202 of the 
United States-Oman Free Trade Agreement Implementation Act for 
which no claim for preferential tariff treatment was made at 
the time of importation if the importer, within 1 year after 
the date of importation, files, in accordance with those 
regulations, a claim that includes--
          (1) * * *

           *       *       *       *       *       *       *

          (3) such other documentation and information relating 
        to the importation of the goods as the Customs Service 
        may require.
                              ----------                              


                  SECTION 202 OF THE TRADE ACT OF 1974


SEC. 202. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY 
                    COMMISSION.

  (a) Petitions and Adjustment Plans.--
          (1) * * *

           *       *       *       *       *       *       *

          (8) The procedures concerning the release of 
        confidential business information set forth in section 
        332(g) of the Tariff Act of 1930 shall apply with 
        respect to information received by the Commission in 
        the course of investigations conducted under this 
        chapter, part 1 of title III of the North American Free 
        Trade Agreement Implementation Act, title II of the 
        United States-Jordan Free Trade Area Implementation 
        Act, title III of the United States-Chile Free Trade 
        Agreement Implementation Act, title III of the United 
        States-Singapore Free Trade Agreement Implementation 
        Act, title III of the United States-Australia Free 
        Trade Agreement Implementation Act, title III of the 
        United States-Morocco Free Trade Agreement 
        Implementation Act, title III of the Dominican 
        Republic-Central America-United States Free Trade 
        Agreement Implementation Act, [and] title III of the 
        United States-Bahrain Free Trade Agreement 
        Implementation Act, and title III of the United States-
        Oman Free Trade Agreement Implementation Act. The 
        Commission may request that parties providing 
        confidential business information furnish 
        nonconfidential summaries thereof or, if such parties 
        indicate that the information in the submission cannot 
        be summarized, the reasons why a summary cannot be 
        provided. If the Commission finds that a request for 
        confidentiality is not warranted and if the party 
        concerned is either unwilling to make the information 
        public or to authorize its disclosure in generalized or 
        summarized form, the Commission may disregard the 
        submission.

           *       *       *       *       *       *       *

                              ----------                              


            SECTION 308 OF THE TRADE AGREEMENTS ACT OF 1979


SEC. 308. DEFINITIONS.

  As used in this title--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Eligible products.--
                  (A) In general.--The term ``eligible 
                product'' means, with respect to any foreign 
                country or instrumentality that is--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) a party to the Dominican 
                        Republic-Central America-United States 
                        Free Trade Agreement, a product or 
                        service of that country or 
                        instrumentality which is covered under 
                        that Agreement for procurement by the 
                        United States; [or]
                          (v) a party to a free trade agreement 
                        that entered into force with respect to 
                        the United States after December 31, 
                        2005, and before July 2, 2006, a 
                        product or service of that country or 
                        instrumentality which is covered under 
                        the free trade agreement for 
                        procurement by the United States[.]; or
                          (vi) a party to the United States-
                        Oman Free Trade Agreement, a product or 
                        service of that country or 
                        instrumentality which is covered under 
                        that Agreement for procurement by the 
                        United States.

           *       *       *       *       *       *       *




                               IX. VIEWS

                            ADDITIONAL VIEWS

    Democratic Members of the Committee believe that 
international trade agreements, properly structured, can be an 
important tool for promoting broad-based economic growth in the 
United States and around the world, and can enhance bilateral 
relationships between the United States and its trading 
partners.
    However, the consideration of trade agreements in Congress 
has become more partisan with every agreement negotiated since 
the Trade Act of 2002. The lack of constructive dialogue 
between Republicans and Democrats on the Committee, and between 
Committee Members from both parties and the Administration, has 
exacerbated differences in views among the Members of the 
Committee.
    The manner in which the U.S.-Oman Free Trade Agreement was 
handled is a perfect example of how not to treat our trade 
relationships with foreign countries. Rather than dealing 
solely with the U.S. Trade Representative, Oman also was forced 
to negotiate separately with Republican trade leadership and 
Democratic trade leadership. This is inappropriate, as the 
differences between Republicans and Democrats in Congress 
should not be the direct concern of foreign countries.
    We hope that the concerns we have raised in relation to the 
U.S.-Oman Free Trade Agreement still can be addressed. We also 
stand ready to engage with Republican Members of the Committee 
in an honest dialogue to determine how to resolve the areas 
where Members have differences so that the Committee's support 
for future trade agreements will be truly bipartisan.

                                   Charles B. Rangel.
                                   Sander M. Levin.
                                   John Lewis.
                                   Lloyd Doggett.
                                   Pete Stark.
                                   Mike Thompson.
                                   John B. Larson.
                                   Jim McDermott.
                                   Xavier Becerra.
                                   Stephanie Tubbs Jones.
                                   Earl Pomeroy.
                                   Rahm Emanuel.
                                   Richard E. Neal.
                                   Michael R. McNulty.
                                   Ben Cardin.
                                   John Tanner.

                            DISSENTING VIEWS

    The United States-Oman Free Trade Agreement (FTA) 
represents another missed opportunity for U.S. trade policy. As 
with previous agreements, the Administration had an opportunity 
to negotiate and submit to Congress for approval an agreement 
that would have ensured that the benefits of trade flow broadly 
throughout society--to working people; farmers, large and 
small; and businesses, large and small. The Administration had 
an opportunity to craft a lasting, bipartisan approach to U.S. 
trade policy. Instead, the Administration negotiated a free 
trade agreement with Oman and submitted a bill to Congress that 
does little to ensure that our trade policy raises living 
standards in the United States and abroad, and that once again 
exacerbates, rather than bridges, differences in views among 
the Members of this Committee.
    The United States and Oman have enjoyed good relations for 
more than 170 years. The two countries signed a treaty of 
friendship in 1833. Today, Oman is a key friend and ally of the 
United States in the Middle East. A correctly drafted trade 
agreement with Oman would solidify this already strong 
relationship. However, the agreement negotiated by the 
Administration fails to adequately address several important 
issues.

                     I. INADEQUATE LABOR PROVISIONS

    As in all other FTAs negotiated by the Bush Administration, 
the single enforceable labor provision in the text of the U.S.-
Oman FTA requires only that each Party ``effectively enforce 
its labor laws.'' Further, that labor provision is subject to a 
weaker enforcement mechanism than that applicable to other 
provisions in the agreement.
    This structure is inadequate in this case, particularly 
because Oman's labor laws and practices fail to comply with 
basic international labor standards, as reported by the 
International Labor Organization, U.S. Department of State, and 
U.S. Department of Labor. In view of these shortcomings, a 
correctly drafted agreement would require that the Parties to 
the agreement meet basic international labor standards so as to 
ensure that workers have the ability to organize and 
collectively bargain for better working conditions and wages. A 
correctly drafted agreement would ensure that U.S. firms and 
workers are not asked to compete against companies that gain a 
competitive advantage by suppressing their workers. A correctly 
drafted agreement would not promote a race to the bottom.
    A correctly drafted agreement, particularly an agreement 
with a country whose labor laws and practices do not comply 
with basic ILO standards, would require each party to the 
agreement to commit to: (1) bring its labor laws into 
compliance with the basic standards of the International Labor 
Organization (ILO) within 3 years; (2) subject this commitment 
to meet basic ILO labor standards and other obligations set 
forth in the Chapter on Labor to the regular dispute settlement 
mechanisms that apply to all other commercial provisions in the 
agreement; and (3) engage in an intensive process--in which the 
United States and international institutions provide amply 
technical and other assistance--such as the government is able 
to meet ILO standards in its laws, practices and enforcement 
activities as rapidly as possible and on a sustained basis.
    In the case of Oman, Committee Democrats sought to overcome 
the lack of enforceable commitments in the U.S.-Oman FTA 
regarding compliance with basic labor standards. Ways and Means 
Democrats identified to the Government of Oman in November 2005 
and February 2006, the changes to Oman's laws that need to be 
made for Oman to comply with ILO standards. The changes were 
limited to those changes necessary to bring Oman's law into 
compliance with basic ILO standards: the right to associated; 
the right to bargain collectively; and bans on exploitative 
child labor and forced labor.
    Despite eight months of discussions, the Government of 
Oman's laws and practices remain far short of basic ILO 
standards and the Government of Oman has not yet brought its 
laws into compliance with ILO standards. Instead, the 
Government of Oman has promised to amend its laws by October 
31, 2006. Further, Oman has not committed to apply its labor 
standards in a manner consistent with basic international 
standards, pending formal changes to its laws.
    Oman's failure to ensure that working people on the ground 
today enjoy basic internationally-recognized rights stands in 
sharp contrast to the clear and binding commitments made by the 
Government of Bahrain regarding the continued application of 
its labor laws when Congress considered the U.S.-Bahrain FTA in 
December 2005. In that case, Bahrain made a binding commitment 
prior to the House vote to (1) continued applying its existing 
labor laws in a manner consistent with ILO standards; as well 
as (2) promptly present to its Parliament formal amendments to 
its laws to ensure they were fully ILO-compliant.
    Had Oman made the same demonstration and undertook the same 
commitments--no more and no less--prior to the Committee markup 
as did the Government of Bahrain in November 2005, there would 
have been a basis in Committee for a broad majority of 
Democratic Committee Members to support the FTA and 
implementing legislation as related to basic labor standards.

       II. ADMINISTRATION DISREGARDED ACTION BY FINANCE COMMITTEE

    We also have strong concerns about the fact that the 
President submitted the formal Oman implementing legislation to 
Congress on June 26, 2006, without including an amendment that 
was approved unanimously by the Senate Finance Committee during 
its mock markup on May 18. The amendment would have prohibited 
products manufactured by companies that engage in human 
trafficking or indentured labor from receiving preferential 
treatment under the FTA.
    At the least, the Members of the Ways and Means Committee 
and Finance Committee should have convened a ``mock'' 
conference to discuss how to handle this amendment. (This was 
the procedure used for NAFTA and the Uruguay Round in the 
1990s.) The fact that the Administration went ahead and 
submitted the implementing bill to Congress without such a 
conference makes a mockery of the procedures that were 
established under the fast track procedures in the Trade Act of 
2002.

      III. REPORTS RE: OMAN'S PARTICIPATION IN ARAB LEAGUE BOYCOTT

    In many ways, Oman has been a leader in the Middle East 
with regard to its ties to Israel. Unfortunately, recent 
reports, including press reports, indicate that Oman has not 
taken a key step to advancing its relationship with Israel, 
eliminating the Arab League boycott against Israel.
    In a letter sent by the Omani Minister of Commerce and 
Industry to U.S. Trade Representative Portman in September 
2005, ``Oman does not apply any aspect of the [Arab League 
boycott], whether primary, secondary or tertiary or have any 
laws to that effect.'' However, despite the statement of the 
Government of Oman that it does not participate in the Arab 
League boycott, independent evidence suggests that the boycott 
may be still be enforced on the ground in Oman. A June 8, 2006 
article in the Jerusalem Post quotes the Chief of Customs 
Officers at Seeb International Airport outside Muscat, the 
Omani capital, as stating:

          No products from Israel are allowed. If it is a 
        personal item or two, they will probably not check. But 
        if it is for marketing or to sell, then it is not 
        allowed.

    The article further quotes an official with Oman's 
Directorate General of Customs as stating, ``Products from 
Israel are not permitted because of the boycott.''
    In response to the Jerusalem Post article, the Government 
of Oman issued a circular to its relevant agencies reiterating 
its policy of not enforcing the boycott. We urge the Government 
of Oman to continue its efforts to ensure the enforcement of 
the boycott is terminated permanently on the ground in Oman.

                     IV. OTHER CONTINUING CONCERNS

    We also continue to have reservations about sections of the 
U.S.-Oman FTA that, like other recently negotiated U.S. FTAs, 
could affect the availability of affordable drugs. In 
particular, we are concerned about test data requirements in 
the U.S.-Oman FTA, which could affect a country's ability to 
address public health problems and delay the introduction of 
generic pharmaceuticals. Further, we are concerned that the 
U.S.-Oman FTA, like other recent FTAs, fails to balance 
appropriately the promotion of access to affordable medicines 
through a streamlined process for generic competition with the 
protection of intellectual property of pharmaceuticals.
    Similarly, we object to the FTA's Chapter on the 
Environment, which like other recently negotiated FTAs, 
includes only minimal commitments. The Chapter includes no 
benchmarks for the Parties to meet in improving their 
environmental laws and practices, and instead requires only 
that the countries enforce their existing laws. Further, this 
requirement is subject to a weaker enforcement mechanism than 
other provisions in the agreement.
    Another area of concern is the so-called ``investor-state'' 
dispute settlement mechanism provided for in the U.S.-Oman 
FTA's Chapter on Investment. The investor-state mechanism can 
be a useful tool to ensure that U.S. investors overseas are 
protected against unfair treatment. However, if not properly 
crafted to reflect current U.S. laws, the investor-state 
mechanism can provide foreign investors greater rights than 
U.S. investors in the U.S. market.
    Unfortunately, the U.S.-Oman FTA still leaves out key 
elements of U.S. law, notwithstanding that it arguably is an 
improvement over the standard contained at Chapter 11 of the 
NAFTA. The result is to empower panels to issue decisions that 
could go well beyond U.S. law--allowing foreign investors to 
receive greater rights than U.S. investors in the U.S. market.

                                   Charles B. Rangel.
                                   Sander M. Levin.
                                   John Lewis.
                                   Lloyd Doggett.
                                   Pete Stark.
                                   Richard E. Neal.
                                   John B. Larson.
                                   Jim McDermott.
                                   Xavier Becerra.
                                   Stephanie Tubbs Jones.
                                   Earl Pomeroy.
                                   Rahm Emanuel.
                                   Ben Cardin.
                                   Michael R. McNulty.

                                  
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