(MENAFN - Times of Oman) The Oman-US Free Trade Agreement, which came into force on the New Year's Day, will open up a plethora of opportunities for traders in Oman and the United States.
With the implementation of the agreement, consumers in Oman can expect quality US products to become cheaper, especially in the automobile, electronic and IT-related sectors.
Commenting on the FTA, US Ambassador to the Sultanate Gary A. Grappo said: "In today's challenging global environment, the Oman-US Free Trade Agreement will provide new opportunities and expanded horizons for economic development to Omani and to American businesses alike,"
Under the Free Trade Agreement, trade in consumer and industrial products will be duty-free.
The liberalisation will expand opportunities for exports of machinery, automobiles, optic and medical instruments, electrical machinery, and such agricultural products as vegetable oils, sugars, sweeteners and beverage bases.
"The trade accord will immediately increase bilateral access for industrial, consumer and agricultural goods and provide new opportunities in the services sector," Grappo said.
The Omani business community has welcomed the agreement which lifts all tariff barriers to consumer and industrial products.
Welcoming the agreement, leading businessman Pankaj Khimji of Khimji Ramdas said: "It will be the first-of-a-kind trade agreement with a western economic powerhouse.
"Items such as cars and ancillary products will be cheaper and so will all the IT and software related items."
The implementation of the pact came more than two years after it was approved by the US Congress in mid-2006 and signed by President Bush later that year. "As such, this agreement will set the ground rules for many such bilateral understandings to follow. I compliment the individuals and the statutory authorities who have diligently worked in making this epic agreement a reality," said Pankaj Khimji.
"The implementation of the US Oman FTA is an important step towards improving trade in goods and services in Oman and is expected to significantly contribute to economic growth and trade between the US and Oman," said Mohamed Nayaz, executive manager (Advisory Services) at Ernst and Young.
"The implementation of the US Oman FTA is an important step towards improving trade in goods and services in Oman and is expected to significantly contribute to economic growth and trade between US and Oman. It is a comprehensive agreement that will eliminate tariffs and barriers and expand trade between both countries," he said. "From January 1, hundred per cent of consumer and industrial products will be duty free. Oman will provide substantial market access across its entire services regime, provide a secure, predictable legal framework for US investors operating in Oman, provide for effective enforcement of labour and environmental laws, and protect intellectual property," Nayaz added.
The agreement provides benefits for businesses wishing to supply services cross-border (for instance, by electronic means) as well as businesses wishing to establish a presence locally in the other country, he added.
With regard to computer and related services, the FTA serves to reinforce Oman's already-strong WTO commitments in this important sector, Nayaz said.
The FTA also affirms the importance of avoiding e-commerce barriers and the applicability of WTO rules. In the agreement, US and Oman agree not to impose customs duties on digital products transmitted electronically, he said.
The e-commerce commitments will help Oman to increase its productivity, and spur innovation and participation in the global digital economy.
The FTA reiterates Oman's confidence, reciprocity, importance it attaches to workforce, environment and other issues such as human rights, free transfer of profits and capital, said Sandeep V. Arora, a noted columnist.
The agreement will generate export opportunities for US and Omani companies and help create more employment opportunities, he said.
"The FTA will certainly contribute to the economic growth and trade between the Sultanate and US," said Tariq Hilal Al Barwani, founder-president of KnowledgeOman.com, yesterday.
"With the Sultanate's recent adoption and promotion of electronic transactions online, we would definitely sooner or later see a number of traditional businesses going electronic, and with such a move, the business houses will increase their productivity and become part of the 'global digital economy'," he said.
In a statement US trade representative Susan Schwab said: "The US-Oman agreement advances the president's vision for economic integration and development in the Middle East and holds important promise for the people of both Oman and the United States. President George W. Bush has announced the entry into force of the US-Oman Free Trade Agreement as part of economic integration and development in the Middle East and better ties with the Sultanate."