For the sultanate to derive full benefit from the Free Trade Agreement (FTA) with the US and vice versa, it is imperative that both the countries take measures to create more awareness on the potential among the private sector in their respective nations, said Christopher Wilson, Assistant US Trade Representative, who was in Muscat recently to discuss ways to take FTA forward.
As for specific Omani industries that stand to gain from the FTA, he said the renewable energy sector is one area in Oman where the US could extend support to and bring in investment and technical expertise. It could bring export benefits for both sides.
“Many of the American companies will not be looking at Oman as a single country, it will also be as a gateway to the other countries in the Gulf region. Companies in the US need not look at Oman only in terms of export of goods; they can also look at the sultanate in terms of trade and services. The potential for the development of telecom and Internet services is very promising.”
There would be other sectors in Oman that would benefit from the increased interaction, but the Omani authorities are better placed to identify those as they have more experience and insight into the local industry, Wilson said.
He said the general perception that to derive maximum benefit from an FTA with the US, a country has to export products made from indigenous material is not completely correct. “This is a very complicated area of the FTA. The basic rule – I’m really simplifying it here – for a product to qualify is that it needs to be substantially transformed within the Omani territory and has a certain percentage of Omani content, which I believe is about 35 per cent of the total product. This is a gross simplification of a complicated clause, but it allows for raw materials or basic products to be brought in from elsewhere and then transformed in Oman before being exported to the US.”
At a roundtable organised by the US Embassy in cooperation with Tawasul Global Connections Center, Wilson, who was on his first visit to Oman, said the FTA reflects the depth and strength of the historic relationship between the two countries. This will set the stage for even more growth and diversification in the economic partnership.
US Ambassador to Oman H E Richard J Schmierer also joined the discussion. He said together, Oman and the US are in many ways ideally suited to take advantage of a trade relationship. “The FTA is in fact only the latest in a series of agreements that began with the US-Oman Treaty of Amity and Commerce in 1833,” said H E Schmierer.
The value of trade between countries was US$2bn in 2008. US was enjoying a moderate surplus in trade with Oman and “we will like to see this trade increase mutually,” said Wilson. One of the reasons for identifying Oman as a partner for FTA was the potential this country holds.
Currently, values are rather limited. “But with the FTA in place, we are confident of a growth in ties.” Asked whether he feels that the FTA took a long time to come into effect, Wilson pointed out that considering the magnitude of the treaty it did not take much time.
“The FTA with Oman took much lesser time compared to that of other partner countries in this region. This was largely due to the concerted efforts of His Majesty Sultan Qaboos bin Said and the ministries concerned in ensuring that the changes in law and Royal decrees are in place.”
Wilson said the US is interested in a deeper degree of interaction with the GCC “as it is developing a wide array of standards and regulations that affect US trade and our free trade partners, Oman and Bahrain. We have a long and strong relationship with Saudi Arabia, which has recently become a member of WTO. This has provided a new level of maturity in the way we work with each other on trade issues.”
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