They say there’s no such thing as a free lunch. There’s certainly no such thing as a free-trade agreement that survives Congress without breaking a sweat. At least not these days.
A trade deal with Oman is illustrating the point right now. Last week, the Senate approved it by a vote of 60 to 34. That’s good news, because the pact makes common sense. But it’s becoming harder and harder to pass even the most commonsensical of free-trade agreements.
Oman is an important American ally in a critical part of the world, occupying a strategic position at the mouth of the Persian Gulf. We should forge strong ties to this small nation if only for reasons of national security, especially as the situation in Iran becomes more vexing. Fortunately, the Oman trade deal also makes economic sense: Two years ago, the United States exported $330 million in goods to Oman. With trade barriers coming down, this figure will do nothing but rise.
“The United States will gain much from this new economic partnership,” said U.S. Trade Representative Susan Schwab. “The agreement will create jobs and economic growth here at home and promote democracy, prosperity, and hope in the Middle East.”
Despite this, protectionists struggled to defeat the agreement with Oman. First, they tried to revive and relive the Dubai Ports controversy. They suggested–falsely–that a trade deal with Oman would leave American ports vulnerable to terrorists. This allegation was absurd – the deal has nothing to do with port security. Yet the Dubai Ports flap caused so much political damage earlier this year that its resurrection in this context probably was inevitable even if it was irresponsible.
Opponents of the deal also rode their standard hobbyhorse of labor rights, claiming that Oman exploits workers to such an obscene degree that it would be a disgrace to contemplate the exchange of goods and services with it. They fail to understand that Oman is a developing country, and that the only way it will continue to develop in a positive direction is if it has an opportunity to grow economically. What’s more, Oman is on the verge of passing labor standards that arguably are stronger than those in Bahrain, whose free-trade agreement with the United States passed the Senate last year on a voice vote.
The Senate’s 60 votes for free trade with Oman mark an improvement over the Central American Free Trade Agreement, which managed to attract only 54 votes in favor. But it’s also a far cry from the 85 votes in favor of a pact with Morocco. The Bush administration has promoted the concept of a Middle East Free Trade Agreement, and so far Congress has finalized trade deals with Bahrain, Israel, Jordan, and Morocco. Oman is proving to be the toughest sell of the bunch.
The bottom line is that the congressional consensus for free trade isn’t dead, but neither is it thriving. A major problem is the partisan bickering that intensifies as elections approach, moving common sense and good economics into the back seat.
The next test will come in the House of Representatives, which is scheduled to consider the Oman agreement this month. The Ways and Means Committee recently approved the measure, which will now head to the floor for a final vote.
After that come two more near-future challenges: Approving a free-trade agreement with Peru and permanent normal trade relations with Vietnam.
The agreement with Peru may generate some of the same sentiments that made last year’s CAFTA vote so difficult. Passage seems likely, but it will be interesting to see how many members of Congress decide to back it. Upcoming November elections will be closer and the pandering for votes will be in full swing.
Congress also is expected to normalize trade with Vietnam. There is enormous political pressure to accomplish this before President Bush visits Vietnam in November.
None of it will be easy. When it comes to free trade, there are no free lunches and no free votes.
Dean Kleckner chairs Truth About Trade and Technology. He is an Iowa farmer and past president of the American Farm Bureau.