Oman–United States Free Trade Agreement: A Comprehensive Guide

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The Oman–United States Free Trade Agreement (FTA) is a significant trade deal that has been in effect since January 1, 2009.

The FTA eliminates tariffs on 92% of Oman's exports to the US, making it a favorable agreement for Oman's trade.

The agreement also provides for the protection of intellectual property rights, including patents, trademarks, and copyrights.

This is crucial for Oman's growing technology and innovation sectors, which rely on the protection of their intellectual property to compete globally.

Oman FTA Overview

The Oman FTA has been a game-changer for trade between Oman and the US, removing customs duties on most industrial and agricultural goods and ensuring a transparent and stable investment environment.

Since 2009, the volume of trade between Oman and the US has increased by 30% to reach more than 3 billion US dollars annually.

The Oman FTA has also led to a significant increase in US foreign direct investment in Oman, with a 36% increase to the end of 2023, positioning the US as the second largest foreign investor in Oman.

For another approach, see: Shipyards in the United States

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The agreement has opened up new avenues for cooperation, particularly in sectors such as energy, logistics, and infrastructure, creating opportunities for both nations.

Bilateral trade has exceeded OMR 1.15 billion (USD 3 billion) annually since 2021, and US investments in Oman reached OMR 5 billion (USD 13 billion) in Q2 2024, focusing on infrastructure, energy, and technology.

The FTA has also benefited Omani companies by opening up US markets to them, and has ensured intellectual property protection standards, benefiting trademarks, copyrights, and patents.

Implementation and Launch

The Oman–United States Free Trade Agreement has been a game-changer for businesses in both countries.

The U.S.-Oman Free Trade Agreement Guide, launched by the Oman American Business Council in December 2024, marks the 15th anniversary of the agreement and is a valuable resource for companies seeking to maximize opportunities through access to data, success stories, and practical insights.

The guide is free to download and will be updated regularly to ensure its relevance and impact for businesses in Oman and the United States.

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The FTA Implementation Act, made available by the United States Trade Representative, has been instrumental in facilitating the agreement's implementation.

The FTA allows US investors to wholly own their companies without requiring a local sponsor, although many choose to partner with Omani companies to leverage local expertise and to facilitate business.

The agreement contains trade facilitation measures designed to expedite the movement of goods and the provision of services between Oman and the United States.

Rules and Protocols

The Oman–United States Free Trade Agreement has established clear rules and protocols to ensure a smooth and fair trade relationship between the two countries. The agreement has a phased implementation schedule, with different dates for various provisions to take effect.

The agreement requires Oman to eliminate tariffs on 92% of US exports within five years, while the US will eliminate tariffs on 75% of Omani exports within the same timeframe. This phased approach allows both countries to adjust to the new trade conditions gradually.

The agreement also includes provisions for customs procedures, such as the use of electronic data interchange and the establishment of a customs valuation system. This will help streamline the customs process and reduce trade costs for both countries.

Oman FTA Quotas

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Oman FTA Quotas are a crucial aspect of the trade agreement between Oman and the United States. The Oman FTA goods that may be subject to a reduced tariff rate quota (TRQ) include beef, dairy, peanuts, sugar, tobacco, cotton, and apparel.

These goods are eligible for a reduced tariff rate, which can be a significant advantage for importers. However, the availability of these quotas is limited, and it's essential to check the current fill levels before importing.

The Commodity Graph Report is a valuable resource for checking the current fill levels of these quotas. By visiting this report, you can get an accurate picture of the available quotas and plan your imports accordingly.

The TPL Threshold to Fill List is another useful tool for identifying almost closed and closed quotas. This list helps you stay ahead of the game and avoid any potential issues with quota availability.

Oman FTA Quotas can be complex, but with the right resources and information, you can navigate them with ease.

Rules of Origin

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Rules of Origin are a crucial aspect of international trade agreements. A good is considered originating if it is imported directly from the territory of one Party into the territory of another Party.

To qualify as an originating good, it must meet one of two conditions: the good must be wholly the growth, product, or manufacture of one or both of the Parties, or it must be a new or different article of commerce that has been grown, produced, or manufactured in the territory of one or both of the Parties.

The good must also meet the substantial transformation rule, which requires that the sum of the value of materials produced in the territory of one or both of the Parties, plus the direct costs of processing operations performed in the territory of one or both of the Parties, is not less than 35 percent of the appraised value of the good at the time it is imported.

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There are also specific rules of origin for certain goods, such as textiles and apparel, which are outlined in Annex 3-A and Annex 4-A of the Final Text.

In addition to these rules, there are several other ways to qualify a product as originating, including:

  • Accumulation, which allows the producer to reduce the value of non-originating materials used in production.
  • De Minimis, which allows the exporter to disregard a small percentage of non-originating materials that do not meet a tariff shift rule.
  • Direct Shipment, which requires goods to be shipped directly from one FTA party to another.
  • Fungible Goods and Materials, which refers to goods or materials that are interchangeable for commercial purposes and have essentially identical properties.
  • Indirect Materials, which are goods used in production, testing, or inspection but not physically incorporated into the good.

Reconciliation Prototype

The Reconciliation Prototype is an alternate method for submitting high-volume post-importation Oman FTA claims, specifically designed for ongoing claims.

This method must be used within one year of importation.

All preference program requirements and responsibilities remain in effect, just like standard 19 USC 1520(d) claims.

Opinions and Perspectives

The Oman-United States Free Trade Agreement has been a game-changer for the country's economy. Oman's exports to the US have increased significantly since the agreement was implemented in 2006.

The agreement has also provided new opportunities for American businesses to invest in Oman. The country's strategic location makes it an attractive destination for trade and investment.

Oman's trade deficit has decreased since the agreement was implemented, with the country's exports to the US increasing by 35% between 2006 and 2010. This is a significant improvement for Oman's economy.

The agreement has also helped to increase economic cooperation between the two countries, with joint projects in areas such as energy and tourism.

Frequently Asked Questions

What was the first Arab country to enact a free trade agreement with the United States?

The first Arab country to enact a free trade agreement with the United States was Jordan, signed on October 24, 2000. This historic agreement marked a significant milestone in US-Arab trade relations.

Clara Donnelly

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Clara Donnelly is a versatile writer with a passion for crafting engaging content across various industries. With a keen eye for detail and a knack for storytelling, she brings complex topics to life through her writing. Her expertise spans a range of topics, including sustainable packaging solutions, where she explores innovative ideas and eco-friendly practices that minimize waste and promote environmental responsibility.

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