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Rumsfeld Says Treaty Would Force U.S. to Share Wealth

Former Defense Secretary Donald Rumsfeld urged U.S. senators to reject the Law of the Sea Treaty backed by the Obama administration because it would force rich countries to give to poorer ones.

“I do not believe the United States should endorse a treaty that makes it a legal obligation for productive countries to pay royalties to less productive countries, based on rhetoric about the common heritage of mankind,” Rumsfeld said today in testimony before the Senate Foreign Relations Committee.

The Obama administration says ratifying the 30-year-old treaty is key to exerting U.S. influence in the Asia-Pacific region, a focus of the revamped global strategy the Pentagon presented in January. Rumsfeld’s position puts him at odds with President Barack Obama and also former President George W. Bush, whom Rumsfeld served as secretary of defense for six years.

He resigned in 2006 amid a political backlash against the wars in Iraq and Afghanistan.

Rumsfeld, 79, said in his testimony that a system of royalty payments under the United Nations treaty compels countries such as the U.S. to make payments to developing countries without making their own “sovereign choice.”

Secretary of State Hillary Clinton, Defense Secretary Leon Panetta and Joint Chiefs of Staff Chairman General Martin Dempsey all appeared before the Senate panel last month, urging ratification of the treaty. The administration says the accord is needed to counter China and maintain influence in Asia.

Business Support

The treaty was signed in 1994 by President Bill Clinton and subsequently endorsed by Bush. It has twice failed to win Senate ratification due to opposition from some conservatives who pressed the argument on sovereignty that Rumsfeld voiced today.

The U.S. Chamber of Commerce supports the treaty, as do companies including Lockheed Martin Corp. (LMT) and Exxon Mobil Corp. (XOM) Business supporters say the treaty offers a stronger legal foundation for activities such as offshore oil drilling, metal harvesting and undersea cable operations.

Rumsfeld’s criticism centered on the treaty’s creation of an International Seabed Authority that would be involved in commercial activity in international waters, including mining and gas exploration.

The U.S. would have to transfer to the authority a big share of all royalties generated by U.S. companies. He said the system could set a precedent for outer-space resources in the future.

‘Enormous Consequences’

“This, in my view, is a new idea of enormous consequence,” Rumsfeld said. “It establishes a way of looking at industry, investment, talent, risk and good fortune that argues in favor of distributing a significant portion of the value of minerals in the deep sea beds to developing countries,” he said.

Senate Foreign Relations Committee Chairman John Kerry, a Massachusetts Democrat, rejected the notion that the authority is an “out of control” entity and said there are numerous misperceptions about its structure.

“It’s totally separate from the United Nations,” he said.

Kerry has said he’ll wait until after the November elections to advance the treaty, which also is supported by the committee’s top Republican, Senator Richard Lugar of Indiana.

Underscoring the political sensitivity for Republicans, Lugar lost his May Republican primary to Indiana state Treasurer Richard Mourdock after facing criticism for past votes, including his leading role in pushing a treaty with Russia through the Senate in 2010.

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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