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Statement of Michael P. Weitzel - Program Manager, Dyncorp Print
Statement of Michael P. Weitzel, Program Manager, DynCorp International, and President, Muscat American Business Council, Muscat, Sultanate of Oman

Testimony Before the House Committee on Ways and Means

April 05, 2006

Mr. Chairman and distinguished members of the Committee on Ways and Means, I thank you for this opportunity to testify on the proposed U.S.-Oman Free Trade Agreement. My name is Michael P. Weitzel, and I serve as president of the Muscat American Business Council – MABC.

I am employed by DynCorp International as Program Manager of the U.S. Air Force’s War Reserve Materiel (WRM) Program in the Central Command (CENTCOM) Area of Responsibility (AOR). DynCorp International provides support services to the U.S. and foreign governments as well as private companies worldwide. We have over 14,000 employees in 35 countries and revenues of nearly $2 billion. Both as an active duty Air Force Colonel assigned to CENTCOM and then CENTAF and, after retiring, as the WRM Program Manager, I have experienced first hand the partnership our country has long enjoyed with the Sultanate of Oman. I am based in the Middle East and have spent the last two years in Oman’s capital city, Muscat.

The Muscat American Business Council was established in October 2004. Its goals are to increase knowledge, strengthen business ties, and stimulate the exchange of information between the American business community and Omani businesses and government. MABC provides a forum for issues that impact the business community and offers a single voice for communication with ministries and government decision makers. Membership is open to companies in Oman with U.S. affiliation or interest in U.S.-Oman relations. 45 companies joined MABC in its first year

The FTA is good for business. That, quite simply, is the bottom line. The agreement encourages trade by eliminating tariffs; promotes investment by creating a more transparent and therefore more inviting business environment; it requires partners to commit to standards - internationally recognized and agreed standards - regarding labor and intellectual property rights. The agreement is designed for mutual benefit, to create jobs and stimulate investment in both the U.S. and Oman.

In a recent article, Oman’s Minister of Commerce and Industry, H.E. Maqbool Ali Sultan, identified FTA benefits to both sides as follows: “Oman needs a larger, global market to achieve their long-term goal of establishing a viable non-oil sector. The FTA will contribute to economic diversification. ...The U.S. stands to gain from increased exports, which have grown each year since 2003. Imports from the U.S. January – October 2005 were $432.1 million, an increase of 23.6 % from the previous year.” It is interesting, also, to note results of the U.S.-Jordan FTA, which was signed in 2000. Trade between Jordan and the U.S. prior to the agreement was approximately $300 million; by 2003, it had more than tripled to over $1 billion.

MABC member Michael Hansen of Oman Marketing and Services Company translates statistics into tangible examples of benefit to the U.S. economy. The Honda SUV model MRV, known as the "Pilot" in the U.S., and the Honda Odyssey are produced in the U.S. and supplied to Oman and the GCC region. Honda is evaluating whether to increase the supply of cars to be produced in the U.S. for sale in Oman and the wider GCC region. This will create jobs in America. Rheem air conditioners are manufactured in the U.S. and sold in Oman by Oman Marketing and Services Company. FTA implementation would mean elimination of import duty and therefore a reduction in the high logistics costs from the U.S. to Oman.  Increased sales are the end result.

MABC member Yaser Tobeh, General Manager of the Dhofar Power Company, provides the following example of the FTA’s potential benefit to Oman’s economy. He writes, “The growth of our business relies directly on the number of customers and bulk consumers that get connected to our system in Salalah and the Dhofar region. With the Salalah Free Zone under construction, the FTA would encourage U.S. investors and companies to bring businesses or industries into the Zone, which means more power connections and more system expansions, thus providing growth to our utility.” And while the Dhofar Power Company would benefit, U.S. investors would also benefit from the company’s increased production made possible by additional sales and profits.

Oman, the size of New Mexico, with a population approaching three million, has made dramatic strides in a short time. Prior to 1970 when Sultan Qaboos bin Said assumed leadership, the country was closed to outside influence; infrastructure and social services were negligible. Today, Oman has a modern infrastructure, outstanding educational and medical facilities, and women are welcomed in the workplace. The economy is growing, there is a significant campaign underway to achieve economic diversification, and major infrastructure development.

Work is in progress to improve ports in Salalah and Muscat, to build a new port in Duqm, and the newly completed port of the industrial city of Sohar has been commissioned. Also underway are plans for a new terminal at the existing Seeb airport, plus additional airports elsewhere. A residential resort called The Wave is being built now and, for the first time, foreigners will be able to own property in Oman. Cultivation of tourism, and in particular eco-tourism, is a priority. Properties such as Shangri La’s recently opened Barr Al Jissah Resort, which includes three luxury hotels in a location of spectacular beauty, and largely built by the Dallas-based firm Turner Construction, will - I am both happy and sad to say - make Oman a much sought-after destination.

Recent steps to enhance local labor conditions and comply with ILO labor requirements demonstrate Oman’s commitment to the FTA. Prior to 2003, Oman functioned under an archaic labor law that simply did not keep pace with the Sultanate’s ratification of core international labor standards and specifically forbade strikes. Today, workers are joining the rapidly growing number of unions and engaging in collective bargaining and even strikes with the full protection of the Omani government. The Omani government is not simply writing new laws – it is putting its modern labor policies into practical effect.

In December 2005, I participated in the Regional Labor Dialogue, a three-day event organized by the U.S. Embassy and Oman’s Ministry of Manpower as part of the U.S. Department of State’s Middle East Partnership Initiative (MEPI). Held in Muscat, the event was well attended by government and private sector interests from across the region, including labor ministers from ten nations. Issues such as work conditions, third country workers, child labor laws, and women in the workplace were discussed openly and energetically. This in itself is significant and noteworthy progress.

DynCorp International has operations throughout the region including Bahrain. As a result of the U.S.-Bahrain Free Trade Agreement, our company has a workers’ union. We view this as a plus, and we work together with the DynCorp Workers Trade Union and the General Federation of Bahrain Trade Unions (GFBTU) as they develop and take on the responsibilities of organized labor. We intend to be leaders in the implementation of the U.S.-Oman FTA labor provisions, and will be supportive of the formation of workers’ representative groups in Oman.

Beyond economics, Oman is a positive presence in the region and a valued partner in the Global War on Terror. It is a country that rejects extremism and supports moderation and tolerance. For the last three decades, Oman has been a trusted ally and has enabled the United States to maintain its stabilizing military presence in the Gulf. At last week’s MABC meeting, Salem bin Nasser Al Ismaily, CEO of the Omani Center for Investment Promotion & Export Development (OCIPED), spoke on the subject of Economic Freedom in the Arab World. He emphasized the integral link between trade and security. They go hand in hand, and more trade means a better chance to end political instability as well as economic stagnation. Unemployment is a problem in Oman; the FTA will increase the number of jobs available for Omanis. We believe efforts to create jobs and raise standards of living will contribute positively to stability in the region.

We have every reason to be optimistic. Oman’s willingness to meet the high standards required of FTA partners is a testament to the progressive spirit and determination of the Omani people and their leader, Sultan Qaboos bin Said. The Muscat American Business Council supports the U.S.-Oman FTA as good business and good policy. We look forward to doing our utmost to support the agreement by increasing awareness locally and enhancing opportunities for trade between these two countries. Having more American products on the shelves in Oman will be a sure sign of the FTA’s success.
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