Times of Oman | Wednesday, September 27, 2006
Bush signs US-Oman free trade agreement
By Our Special Correspondent
MUSCAT - US President George W. Bush signed legislation containing the historic US-Oman Free Trade Agreement (FTA) into law in Washigton yesterday.
“This agreement will level the playing field for US workers and businesses, provide additional access to US goods, help Oman’s leaders develop long-term opportunities for their people, and advance our shared goal of building a Middle East Free Trade Area,” the president said.
US Ambassador to Oman, Gary A. Grappo, hailed the signing of the US-Oman FTA. He said: “Completing the agreement is a big step for both our countries and the crowning achievement to a relationship begun less than 20 years after American independence, one affirmed in our very first treaty with an Arab government, the Treaty of Amity an Commerce signed in 1833.”
The US Embassy in Oman supports a range of programmes reflecting the deep historic, diplomatic, and economic, bilateral ties between the US and the Sultanate.
The US-Oman FTA, fifth such pact between the US and an Arab nation, will enter into force when all legal requirements and procedures have been completed. The FTA is expected to break new ground for US-Oman bilateral trade relations, expanding export opportunities for the US and Omani firms.
The pact will also provide new opportunities for services and provide a secure and predictable legal framework for investment.
The agreement is expected to provide for effective enforcement of labour and environmental laws, and protect intellectual property. US Trade Representative Susan Schwab called the FTA “good news for the US, Oman, and our efforts to promote economic opportunity in the Middle East,” adding that the $1 billion, two-way trade relationship between the two nations is now set to grow. On the first day this agreement goes into effect, 100 per cent of consumer and industrial products will flow without tariffs.”
The US-Oman FTA negotiations, which begun on March 12, 2005 entailed enormous scope for consumers and the domestic economy to witness spectacular changes in trade.
The FTA will strip away most barriers to bilateral trade between the two countries. Free trade agreements play a key role in raising living standards; promote economic activity, investment opportunities, development, prosperity, job opportunities, etc.
Oman is essentially a consumer market, and the essence of FTA is trade liberalisation and duty-free. FTA will wipe out export-import tariffs. US goods, including vehicles, machinery, toys, pharmaceutical products, games and sports equipment and agricultural commodities like cereals, dairy produce, fruits and vegetables and meats would enjoy good demand in Oman as traders and consumers will enjoy more choice, and more significantly, affordable prices. In the Gulf, significant progress towards regional integration has already been achieved. Barriers to free movement of goods, services, capital and national labour have been largely eliminated and a common external tariff is now in place.
AGCC Customs Union, based on a single entry point customs duty collection mechanism, which came into existence on January 1, 2003 had made customs duty on majority of imported goods for the six-member Arab states five per cent.
“The FTA will bring in more flexibility in financial services, telecommunications, e-commerce, intellectual property rights, labour norms, etc. Though certain free trade agreements are already in place in the Mena region, they have not been sufficient to overcome the effects of high border trade barriers and restrictions on services. “Technically, over the longer-term, a return to lower oil prices and the need for enhanced reforms across the region will present substantial challenges,” analysts said.