Oman's Progress on Free Trade Agreement with Singapore
22/10/24
Oman has made significant strides in expanding its trade relationship with Singapore, increasing its exported products from 51 in 2000 to 135 in 2018. This growth underscores Oman’s commitment to becoming an open trading system and its active participation in global economic integration.
Since the inception of Oman Vision 2040, the country has focused on diversifying its economy beyond hydrocarbons. A pivotal step in this direction was Oman’s participation in the Gulf-Singapore Free Trade Agreement (GSFTA), established to enhance trade and investment opportunities, particularly in non-hydrocarbon sectors.
The GSFTA, which came into effect on January 1, 2015, aims to eliminate tariffs on goods, liberalize services trade and align procurement practices with World Trade Organization (WTO) standards. Notably, Oman’s integration into the global economy has accelerated since it joined the WTO in 2000, resulting in substantial trade growth. As a result, average tariffs fell from approximately 5% in 2005 to below 0.6% in 2018.
Most importantly, the GSFTA allows Omani goods to enter Singapore tariff-free with no restrictions on quantity or quality. The agreement also promotes bilateral investment flows and cooperation in key sectors such as information and communication technology, air services and business visits. Notably, it recognises halal certification from Singapore's Majlis Ugama Islam Singapura (MUIS), facilitating a healthy trade in halal products. Following the GSFTA’s implementation, Oman’s exports to Singapore grew by 20.5%.
Historically, Oman has leveraged its comparative advantage in raw materials, fuels and minerals. However, since 2015, it has also enhanced its competitiveness in consumer goods, chemicals and metals.
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