WORLD TRADE  
ORGANIZATION  WT/TPR/M/201 
24 July 2008 
 (08-3547) 
Trade Policy Review Body 
25 and 27 June 2008  
 
 
 
TRADE POLICY REVIEW 
 
OMAN 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Yonov Frederick Agah (Nigeria) 
 
   Page 
 
I.
 INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF OMAN 4  
III. STATEMENT BY THE DISCUSSANT 7  
IV. STATEMENTS BY MEMBERS 10  
V. REPLIES BY THE REPRESENTATIVE OF OMAN AND ADDITIONAL 
COMMENTS  14  
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 17  
 
 
Note:   Advance written questions by WTO Me mbers and the replies provided by Oman are 
reproduced in document WT/TPR/M/201/Add.1 and will be available online at:  
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm.   WT/TPR/M/201 
 Page 3 
 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The first Trade Policy Review of Oman was he ld on 25 and 27 June 2008.  The Chairperson 
H.E. Mr. Yonov Frederick Agah (Nigeria) we lcomed the delegation of Oman, headed by 
H.E. Mr. Maqbool Ali Sultan, Minister of Commerce and Industry, and the discussant, Mr. Ravi Bangar (India).  As usual, the discussant would speak in his personal capacity and not as a 
representative of his country.  In accordance with th e established procedures, the discussant had made 
available, in advance, outlines of the main i ssues he intended to raise (document WT/TPR/D/176). 
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by Oman was contained in document WT/TPR/G/201 and 
that of the WTO Secretariat in WT/TPR/S/201.  As indicated in WT/TPR/6/Rev.1, the Member under 
review should provide written answers, by the be ginning of the review meeting, to questions 
submitted at least two weeks in advance.  Questions  posed subsequently should be answered, to the 
extent possible, before the start of the second sessi on.  Questions left unanswered at the end of the 
second session should be answered in writing no later th an one month after the meeting.  Questions by 
the following delegations had been submitted in wr iting at least two weeks in advance and had been 
transmitted to the delegation of Oman:  the United Stat es;  Brazil;  Australia;  the Republic of Korea;  
Argentina;  the European Communities;  Japan;  Colo mbia;  Canada;  and Hong Kong, China.  Copies 
of these questions and of Oman's answers were available in the meeting room.  All advance questions, as well as the responses received from the Omani delegation, are reproduced in 
WT/TPR/M/201/Add.1. 
3. According to the documentation prepared for th is Review, Oman's economic performance had 
been impressive over the last few years, with high real GDP growth, low inflation, and surpluses in its 
overall fiscal position and external current ac count. This had mainly resulted from Oman's 
development strategy centred on a liberal trade regime, and a significant increase in oil and gas revenues.  In addition, Oman had taken steps to  improve its investment climate, although foreign 
investment was still not allowed in certain activities.  
4. Oman had substantially liberalized its trade re gime;  its market was quite open to foreign 
products, with an applied MFN average tariff rate of  5.5%.  A key element of Oman's reform process 
related to its full economic inte gration under the Gulf Cooperation Council, of which the customs 
union component had been launched on 1 January 2003.  Oman also participated in the Pan Arab 
Free-Trade Area, and had concluded a bilateral tr ade agreement (not yet in force) with the 
United States. WT/TPR/M/201 
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II. OPENING STATEMENT BY THE REPRESENTATIVE OF OMAN 
5. The representative of Oman
 stated that Oman's economy was open and liberal.  Its economic 
policies were centred on the welfare and prosperity  of its nationals, through raising their living 
standard, providing them with job opportunities, and enabling them to share the fruits of economic 
growth and development.  In 2007, Oman's econom ic growth had reached 12.9%;  the oil and gas 
sectors had accounted for 45.3% of GDP;  total expo rts had reached RO 9,505.7 million, of which oil 
and gas accounted for 75.9%. 
6. Economic diversification in order to reduce o il dependence was one of Oman's main policy 
objectives.  Consistent efforts were bearing fruit;  the oil share to GDP was declining gradually.  The 
objective was to reduce it to 9% by 2020.  A number of industrial and services projects aimed at 
further diversification were being implemented or planned.  Diversification would remain a main 
policy objective in the years to come.  Following its 2008 Article IV Consultations, the IMF had commended Oman for its strong growth performance over the past few years, in particular its progress 
in implementing structural reforms that had contributed to strong non-oil output growth. 
7. Privatization was another main pillar of Oman's  economic policy.  The private sector had had 
neither the resources nor the experience and experti se to participate meaningfully in Oman's early 
years of economic development.  The public sector  had had to fill the gap, which explained its 
dominant role in the economy.  Ho wever, the current emphasis was on enhancing the participation of 
the private sector, thereby decreasing substantially th e role of the public sector.  Oman's privatization 
programme was aimed at making the private sector  the driving force of economic development.  
8. Oman's investment policy was linked to its di versification and priv atization programmes. 
Oman was committed to a pro-growth, pro-business investment policy.  Foreign investors enjoyed 
national treatment and 70% ownership;  100% foreign ownership was allowed for projects 
contributing to Oman's economic development.  The tax rate on domestic and foreign companies 
registered in Oman was very low (12%).  Oman  had concluded many agreements on investment 
promotion and protection in the last few years.  The Foreign Capital Investment Law, the Commercial 
Companies Law, the Taxation Law, and other inv estment-related laws were being revised towards 
greater liberalization and flexibility. 
9. Human resource development was a high prio rity given its importance to economic 
development.  Oman had implem ented wide ranging policies on human resource development.  Top 
grade schools, colleges, and universities had been est ablished to educate and train the youth, with the 
view to preparing it for the challenges and opportuni ties in a competitive environment.  Technical and 
vocational training institutes had also been estab lished to cater for the needs of industries and 
businesses.  Sultan Qaboos University was runni ng classes on WTO laws and procedures.  The 
Omanization Programme was often misunderstood a nd misinterpreted;  it was meant to tackle 
unemployment of qualified Omanis and encourage companies to employ suitably qualified and 
available Omanis.  It did not work against fore igners.  Every government had to provide job 
opportunities for its citizens;  the Omanization Progra mme should be looked at in the perspective of 
avoiding social tensions that could result from the unemployment of educated youth.  It had resulted 
in an increase rather than a decrease in foreign labour.  
10. As a historical trading nation, Oman understood and appreciated the value of open markets, 
liberal trade policies, and a rule-based multilate ral trading system.  The GATT/WTO rules and 
procedures had contributed to liberalize and expand in ternational trade over the past 60 years.  Oman's 
trade policy was based on, and consistent with, these rules and procedures.  Oman had adhered 
faithfully to the WTO rules and disciplines, and abid ed by its commitments.  Low tariffs, near absence 
of quantitative restrictions, no export subsidies, no prohibited TRIMS, and commercially meaningful 
commitments to trade in services characterized Oman's trade policy.  Oman had bound its tariffs on all agricultural and non-agricultural products at low rates.  Under the Gulf Cooperation Council  WT/TPR/M/201 
 Page 5 
 
 
(GCC) common external tariff, its applied tariffs on nearly all products were zero or 5%.  Oman's 
bound and applied tariffs compared favourably with most Members.  There were no prohibitions or 
restrictions on imports and exports, except for health , safety, or national security reasons.  Oman did 
not apply export subsidies on agricultural or non-agricultural products.  The few production and 
domestic subsidies were within the WTO rules;  domestic support to agriculture were green box 
measures.  
11. Oman recognized the importance and potential of  services.  Oman had made commitments on 
11 sectors and some 95 subsectors;  it might consider further commitments consistent with its trade and development needs.  
12. Oman had an extensive array of intellect ual property laws, backed by an effective 
enforcement mechanism.  Aware of the importance of protecting and enforcing IP rights, Oman had 
revised its IP laws to provide  higher levels of protection. 
13. Oman was actively engaged in regional and bila teral FTAs.  It was a founding member of the 
GCC.  The GCC had established a free-trade area in 1981, which had evolved into a customs union in 2003 and into a common market in 2008.  Oman was also participating in the Pan-Arab Free Trade 
Area (PAFTA), an interim agreemen t in force since 1998;  its implementation had been accelerated so 
that mutual tariffs had been eliminated in 2005 (i nstead of 2007).  An FTA with the United States 
would soon enter into force.  The GCC had concl uded FTAs with Singapore and the EFTA States;  it 
was about to conclude an FTA with the EC, a nd was negotiating with other Members.  Oman's 
participation in FTAs or FTA negotiations did not m ean that it was turning its back on the multilateral 
trading system, which had served the international community very well over the past 60 years;  no 
better substitute was available or conceivable.   
14. Oman was strongly supporting the DDA negotiatio ns and wished they had been concluded 
much earlier.  What mattered was achieving ambiti ous and substantial results.  The DDA objectives as 
regards the interests of developing countries should be  fulfilled;  these interests had to remain at the 
core of the negotiations.  Although Oman's ma in interests were in the NAMA and services 
negotiations, it was also interested in agriculture, ru les, and dispute settlement .  Oman was looking for 
better market access;  it favoured substantial tariffs reduction through the use of a formula, as well as 
some sectoral negotiations on a voluntary basis.  Om an had already contributed substantially to the 
NAMA negotiations by binding tariffs on all non-agri cultural products at low rates.  The negotiations 
on agriculture were key to the success of the DDA;  Oman urged major Members to eliminate export 
subsidies and to eliminate or reduce substantially ta riffs and domestic support to agriculture.  Trade in 
services was growing fast;  ne gotiations should aim at impr oving market access based on a 
progressive liberalization.  Improved and clarifie d WTO rules, and improvement of the dispute 
settlement procedures were crucial for the multilate ral trading system to function efficiently.   
15. Oman had notified its new customs valuation legi slation to the WTO.  The issue of minimum 
prices on tobacco and tobacco products would be so rted out in consultation with WTO valuation 
experts.  The GCC member states hoped to have their common list of import prohibitions completed 
in the next few months.  The requirements for ma rketing and distributing pharmaceutical products in 
Oman were a simplified form of approval proce ss.  Oman did not apply export subsidies on 
agricultural and non-agricultural products, as paragr aphs 63 to 67 of the Secretariat Report might 
imply.  The GCC Trade Remedy Law provided for th e application of anti-dumping or countervailing 
duties, or safeguard measures on a GCC basis and not on a national basis.  Paragraph 31 (Chapter II of 
the Report by the Secretariat) gave a mistaken view of the Omanization Programme;  and there were 
some comments of a political nature that better would be avoided in a Trade Policy Review. WT/TPR/M/201 
Page 6  
 
16. The four pillars of Oman's economic policy were sustainable development with stable 
macroeconomic framework;  a diversified, dynami c, and globalized economy;  advanced human 
resource development;  and an efficient and compe titive private sector.  The instruments for achieving 
these objectives were diversification, privatization, an d liberalization.  Oman believed in an open and 
liberal trade policy whose formulation and implementation were based on the principles of the 
multilateral trading system and the WTO rules a nd procedures.  Oman fully supported a successful 
conclusion of the DDA and the strengthening of the WTO.  WT/TPR/M/201 
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III. STATEMENT BY THE DISCUSSANT 
17. The discussant  recalled that Minister Sultan had been guiding Oman's commercial and 
industrial progress since 1991 when he had been ap pointed Minister of Commerce and Industry, and 
was also the Chairman of Oman Oil Company.   Oman was committed to advancing economic 
freedom in the Middle East.  The discussant's remark s were aimed at having as objective an analysis 
as possible to better understand Oman's trade regime and policies.  
18. This was Oman's first Trade Policy Review.  Gi ven its history as an important trading and 
maritime power, Members needed to  look into Oman's past to comprehend its continuous efforts to 
develop into a prosperous and diversified economy with a modern society exercising a moderating 
influence in the region.  The copper mining and sm elting industry had always been well developed in 
Oman.  In the 19th Century, Oman had reached wealth, prosperity, and political stability by becoming 
a regional power, concluding agreements with Europ ean powers, and being the first Arab State to 
establish diplomatic relations with the United States .  In particular, Oman's strategic importance lay 
on the Strait of Hormuz, through which about two thir ds of the world's sea-borne trade in crude oil 
passed.  The ports of Sohar and Muttrah had also held great prominence.  From 1856 to 1970, Oman 
had slipped into isolation;  prior to 1970, there had been no schools, newspa pers, radio stations, and 
only 10 km of paved roads.  There were currently  9,673 km of paved roads, including 550 km of 
expressways.  Sultan Qaboos was committed to pros perity, and economic and social progress;  he 
hoped to increase knowledge and education.  Oman's development was based on a series of five-year 
plans aimed at providing infrastructure, i.e. hou sing, hospitals, schools, roads, electricity, and 
communications. 
19. Oman had pursued policies aimed at establishi ng social welfare to promote stability and 
security in a rapidly changing social environment.  It had transformed from a less-developed economy with a low standard of living and subsistence agricu lture as the main source of income, into a modern 
society with a stable and strong economy, a high st andard of living, and increasing job opportunities 
for its young and growing population.  Oman ranke d high in international indexes, including the 
Fraser Institute's Global Economic Freedom Index;  Aon Political Risk Map 2007 classified Oman as 
"least politically risked" in the Middle East and No rthern Africa region.  Oman's political and social 
reforms had been most impressive:  university enro llment was nearly equa lly split between boys and 
girls;  and women had enjoyed relatively more freedom  than elsewhere in the Arabian Peninsula.  In 
1997, they had been given the right to vote and to stand for election to the Consultative Council.  Their participation in A'Shura and in holding sen ior positions reflected the desire to see working 
women gaining trust and respect.  In 2004, the first fe male minister with portfolio had been appointed.  
Several women had been elected to the Council.   Three women were government ministers (in 
tourism, higher education, and social development).  
(i) Macroeconomic environment  
20. Sultan Qaboos said once that there was no evolutio n without roots.  Oman had flourished by 
building upon its past achievements while embraci ng modern technology in a unique blend;  this 
delicate, yet important balance had kept it unique  among its neighbours.  Since 1970, socioeconomic 
developments aimed at improving the standard of li ving, had been Oman's key concern.  GDP growth 
had been impressive since 2004, reaching double digits .  In 2006, oil and gas had accounted for 44.9% 
of GDP, and non-petroleum activities for 53.1%, with  agriculture accounting for 1.3%, industry for 
around 14%, and services for 37.7%.  According to Oman Vision 2020, Oman would no longer be an oil-reliant economy by 2020 but a diversified economy with higher levels of savings and investment.  
The discussant asked about Oman's plans to achieve these objectives.  
21. Oman Vision 2020 and the seventh Five-Year De velopment Plan project ed real annual GDP 
growth at not less than 3%, coupled with average in flation of not more than 2%.  However, inflation 
had accelerated recently to a 12.4% record, as soari ng global food prices and rents intensified price WT/TPR/M/201 
Page 8  
 
pressures;  in general, inflation was accelerating across the Arab Gulf region, where most countries 
(including Oman) had pegged their currencies to the weakening dollar, which was driving up import 
costs.  The discussant enquired about planned steps to rein in inflation.  
(ii) Trade policy 
22. Oman's trade policies were aimed at maximizi ng its economic development with a view to 
ensuring prosperity, raising the standard of living, and providing increased job opportunities.  Oman did not apply any other duties and charges (bound at zero), nor any domestic taxes (e.g. VAT, sales tax, or excise duties) on imports.  Oman had bou nd its import tariffs on all agricultural and non-
agricultural products;  therefore, 100% of its duties were bound.  The simple average bound rates 
were 13.8% on all products;  11.6% on non-agricultur al products;  and 28% on agricultural products.  
A little more than 88% of Oman's im ports were non-agricultural products. 
23. Oman had never taken any action under the GCC Trade Remedy Law.  It did not apply any 
export subsidies or taxes, export licensing procedur es, nor export performance requirements.  Oman 
had enacted, implemented, and enforced IP laws.  
(iii) Sectoral policies 
24. Oil was the mainstay of Oman's economy, acc ounting for 44.9% of GDP and around 67% of 
total exports.  Oil and gas accounted for around 81% of total exports.  Since the share of non-oil and 
non-gas exports to Oman's total exports had increas ed slightly (from 6.8% in 2003 to 9.8% in 2006), 
and the non-oil industry's contribution was projected  to increase substantially (from 14.2% in 2006 to 
29% in 2020), the discussant asked about how th ese ambitious objectives would be achieved.  
Services were emerging fast and accounted for 37.7% of GDP.   
25. Oman's privatization programme was aimed at reducing the role of the State in the economy 
and fostering the development of an efficient a nd competitive private sector, thereby contributing to 
the overall efficiency and dynamism of the economy .  Privatization had been carried out in some 
sectors in recent years.  The discussant asked about Oman's plans for further reforms in the remaining 
state-owned enterprises (SOEs).   
26. Oman had pursued an open and liberal investme nt policy.  It had encouraged domestic and 
foreign investment in order to achieve diversifi cation, through reducing gradually its oil dependence 
and promoting the development of the manufacturing, services, tourism, and fisheries sectors.  
Conscious policy efforts had been made to achieve economic diversification.  The discussant wished 
to know how the changes in the gas, manufacturing,  and tourism sectors were carried out as they 
would be of interest to domestic and foreign investors.  
27. Oman's investment regime was liberal:  there was no personal income tax, and the corporate 
income tax was a 12% flat rate.  A five-year tax holiday (renewable for another five years) was allowed for foreign and domestic investment project s.  Repatriation of capital and profits were not 
restricted or controlled.  This had resulted in  an increase in FDI of over 140% between 2003 and 
2006.  It was a welcome statement that Oman w ould continue to encour age foreign and domestic 
investment.  Investors would undoubtedly study th e proposed revised Fore ign Capital Investment 
Law, which was aimed at making the law even more liberal and investor friendly.   
28. Oman had a good potential for tourism.  It ha d 14 UNESCO world heritage sites, more than 
500 fortresses, and offered activities linked to nature, geology, adventure, and curative tourism.  The 
tourism sector, which had received a million tourists, should be able to realize its full potential in the 
years to come. 
29. The median age of Oman's population was 18.9 year s;  it enjoyed a life expectancy of almost 
74 years.  Therefore, developing human resources and upgrading the skills of its nationals in order to  WT/TPR/M/201 
 Page 9 
 
 
keep abreast of technological changes and meet  the demands of a knowledge-based economy and 
increasing globalization, had been of highest importa nce in Oman's development programmes.  Oman 
was committed to nurturing innovation and crea ting a suitable climate for entrepreneurship. 
(iv) Oman:  regional integration, the WTO, and DDA 
30. As an ancient trading nation, Oman appreciat ed fully the value of open and liberal trade 
policies.  It played an important role in regional integration.  Oman was a founding member of the 
Indian Ocean Rim-Association for Regional Coopera tion and the GCC.  The GCC member States had 
established a free-trade area in 1981.  Oman was al so a member of the PAFTA established in 1998.   
31. Since acceding to the WTO in 2000, Oman had pa rticipated actively in different bodies and 
activities to promote and protect its trade inter ests, as well as in the DDA negotiations.  The 
discussant urged Members to take note of Oman's t echnical assistance needs in order to ensure its 
more effective participation in the multilateral trading system.   
32. Oman had marked solid achievements over the l ast four decades;  the discussant believed that 
it would continue its modernizati on and would be a voice of moderati on, playing a crucial role in 
ensuring peace, progress, prosperity, and stability  within its borders and the region.   WT/TPR/M/201 
Page 10  
 
IV. STATEMENTS BY MEMBERS 
33. Members noted that Oman had transformed from a less-developed to a high-income economy.  
They commended its impressive macroeconomic pe rformance since 2000 (high real GDP, high GDP 
per capita, low inflation, and surpluses in its overa ll fiscal position and its external account), which 
resulted from its liberal trade regime, economic di versification, and development strategies.   
34. Members stressed that Oman's economy was highly dependent on crude oil and natural gas.  
They commended it for further diversifying its economy by promoting the manufacturing, agriculture, fisheries, and tourism sectors.  According to Om an Vision 2020, the oil and gas contribution was to 
decrease to 9% of GDP by 2020.  Members encouraged  Oman to continue its diversification efforts.  
Members also noted the importance of services to Oman's economy.  
35. Members noted that Oman Vision 2020 was ai med not only at diversifying the economy but 
improving education and health services, moderniz ing the infrastructure, and addressing structural 
problems (i.e. privatizing SOEs).  They commended Oman's efforts to enhance the participation of the 
private sector in the economy, thereby decreasing s ubstantially the role of the public sector.  They 
encouraged Oman to pursue its privatization programme aimed at creating an efficient and 
competitive private sector.  However, some Members noted that providing more job opportunities 
remained one of Oman's main economic and social challenges.  Oman's development strategy success 
was internationally recognized as Oman ranked high in freedom indexes.   
36. Although Oman had enhanced its investment re gime, which had resulted in an impressive 
increase in FDI between 2000-06, restrictions rema ined (e.g. prohibitions of land ownership for 
foreigners and foreign participation in some se ctors (e.g. tourism and transport), and foreign 
ownership limited to 70%);  Memb ers urged Oman to remove these impediments to FDI.  Members 
believed that Oman's future growth would be assi sted by addressing regulatory impediments to trade 
and investment.   
37. Members commended Oman for opening up its market.  Oman had a simple tariff structure 
and maintained ad valorem  rates for all its tariff lines;  the average MFN applied tariff was 5.5%.  
Non-tariff barriers were almost non-existent.  Oman did not apply tariff quotas nor other duties and 
charges on imports.  Its customs clearance procedures were efficient.  Some Members urged Oman to strengthen its IPR enforcement. 
38. Since its accession in 2000, Oman had been pa rticipating actively in the WTO, including the 
DDA negotiations through the RAMs group;  it su pported a successful conclusion of the Round.  
Some Members noted Oman's efforts to make it s trade policy compliant with the WTO rules and 
procedures.  Members hoped that Oman would rema in committed to the multilateral trading system 
through improving its commitments and bringing some elements of its trade regime up to date and 
into greater conformity with the WTO provisions.  Members also stressed Oman's more active regional participation within the GGC and the PAFTA.  
39. The representative of Brazil
 said that Brazil's bilateral trade with Oman had increased 
significantly in 2007;  non-traditional merchandise ha d improved their share in overall trade flows.  
The negotiations for an FTA between MERCOSUR a nd the GCC would help to further expand their 
bilateral trade.   
40. The representative of Australia  referred to Australia's bila teral relations with Oman in 
education, training, and trade.  Oman was Australia's  fifth largest trading partner in the Gulf region, 
and was an important market for Australia's transformed manufactured products;  there was 
considerable scope for further growth in their bila teral trade.  Australia and Oman were committed to 
increasing investment flows and reducing barriers to trade;  in this regard, negotiations on a FTA 
between Australia and the GCC had been launched.  WT/TPR/M/201 
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41. The representative of the Republic of Korea  said that Oman had been an important partner in 
energy cooperation;  Korean companies had been participating in Oman's industrialization and in 
various construction projects.  Korea hoped that th eir economic cooperation would further strengthen.  
On government procurement, Korea noted that Om an granted a price preference to local and GCC 
products and asked Oman to reconsider the practice of  giving priority to the bid price over quality and 
technology transfer.  While understanding the le gitimacy of the Omanization programme, Korea 
believed that a more flexible application was desi rable for foreign companies that trained national 
workers since they might face di fficulties to secure skilled labour in  some sectors due to Oman's 
labour market rigidity.   
42. The representative of Argentina  said that Argentina and Oman had participated in the first 
South America-Arab Countries Summit in 2005, whic h had established a basis for bi-regional links 
with a view to enhancing bilateral relations.  In that context, Argentina, together with the other 
MERCOSUR partners, had initiated ne gotiations with the GCC with a view to achieving a free trade 
agreement (FTA).  Although the current level of trade between Argentina and Oman was relatively 
low, the planned framework of integration betw een the two regional blocs would enable their 
economies to develop their full potential.  
43. The representative of the European Communities  noted Oman's important reforms in services.  
The EC encouraged Oman to implement a legal frame work for competition.  Oman wished to address 
its competition policy at the GCC level and the EC was interested in the expect ed timeframe for this.  
EC bilateral trade with Oman had been stable over the last few years and there was room for 
improvement.  The EC had been Oman's fifth major trading partner in 2006;  under the GSP, Oman 
benefited from preferential access to the EC mark et.  The EC was negotiating a region-to-region FTA 
with the GCC.  The EC was concerned about the r ecent request by GCC member States to change the 
notification status of their customs union from Artic le XXIV to the Enabling Clause;  the EC was of 
the view that the Enabling Clause did not provide an appropriate legal basis for notifying customs 
unions.  The EC was interested in hearing Oman's  views in this respect.  The EC and the GCC 
cooperated in various areas, including energy and e ducation.  The EC was interested to know when 
Oman planned to fully apply the GCC CET, which would help to fully implement the customs union 
and increase the transparency and predictability of Oman's trade regime.  Oman was an observer to 
the WTO Plurilateral Agreement on Government Proc urement and the EC invited it to participate 
actively in the GPA Committee and to cons ider its possible accession to the GPA. 
44. The representative of Japan  noted that Oman's investment policy was aimed at achieving 
economic diversification and job creation.  Japan  wished to know of any plans to address FDI 
prohibitions in certain services subsectors.  Japan hoped that the Foreign Capital Investment Law, 
which allowed foreign ownership up to 49%, w ould be amended promptly to reflect Oman's 
commitments, i.e. allowing foreign ownership up to 70%.  While welcoming Oman's top policy 
priority of job creation through the Omaniza tion programme, Japan stressed that the quota 
requirement of hiring Omani labour would increase hum an costs for companies;  it was interested in 
hearing about specific measures to further strengthe n training and education programmes in order to 
develop human resources and upgrade the skills of its nationals.   
45. The representative of Colombia  stated that Colombia regarded Oman's trade policy as 
appropriate to its situation as a country that depe nded on imports for its basic supplies.  Colombia 
emphasized that the low simple average applied MF N tariffs for agricultural products promoted food 
security.   
46. The representative of Canada  said that Canada's exports to Oman had more than doubled in 
2007 due to increases in machinery and aluminium exports, while imports from Oman had decreased.  
Canada looked forward to furthe r improving bilateral trade.   WT/TPR/M/201 
Page 12  
 
47. The representative of Hong Kong, China
 hoped that bilateral trade with Oman would continue 
to increase.  Hong Kong, China commended Oman's e fforts in promoting the development of services 
and encouraging private-sector participation in services thereby enhancing competitiveness.  Hong 
Kong, China encouraged Oman to table its revi sed offer on services and improve further its GATS 
commitments.  It encouraged Oman to consid er narrowing the gap between its bound and applied 
rates. 
48. The representative of Qatar (on behalf of the Arab League and the GGC member States ) said 
that promoting investment, reducing tariffs, removi ng restrictions, and participating actively in the 
DDA negotiations showed Oman's desire to hono ur its WTO commitments.  Oman's economic 
diversification would help to consolidate and strengthen the multilateral trading system. 
49. The representative of Nigeria  said that Oman's participation in the GCC had hindered its 
multilateral efforts due to its limited capacity an d resources;  Oman could benefit further from 
multilateral market opening.  Therefore, Nigeria ur ged Members to ensure th at their markets were 
fully open in sectors and products of  export interest to Oman;  adequate technical assistance should 
also be provided.  Services could be further enhanced through better market access and national 
treatment for foreign services and providers;  the sect or should be further de veloped to improve its 
competitiveness.  Nigeria welcomed Oman's effort s to harmonize its standards with international 
ones, and to use international standards for conf ormity assessment, in compliance with the WTO TBT 
and SPS principles.  Nigeria and Oman shared  economic similarities and were committed to 
enhancing their trade relations.   
50. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen, and Matsu  
said that pursuing programmes aimed at further li beralizing markets was the best way to achieve 
sustained economic growth. 
51. The representative of India  said that the Indo-Omani relations had been marked by regular 
high-level exchange.  Bilateral institutional mech anisms included the Joint Commission, the Joint 
Business Council, and the Strategic Consultative Group;  India's largest joint-venture abroad had been 
set up in Oman.  Oman had invested in Indian re fineries, pharmaceutical industry, and home furniture. 
Over 100 Indian companies were operating in Oman .  Indian IT companies had helped Oman in 
setting up an IT park.  Their bilateral trade had been growing steadily.  A large number of Indians 
were working in Oman.  Under the ITEC programme , India provided Omani with training facilities in 
diverse areas and about 1,500 Omani students were studying in India. 
52. The representative of China  believed that Oman's long-term projected GDP growth would 
further diversify its economy, with high levels of sav ings and investment.  China's bilateral trade with 
Oman had increased in 2007;  they had been cooperating in direct investment, engineering 
technology, and contracting services.  Oman's reform  efforts had already brought positive results as 
Oman's economy was increasingly dependent on international trade and its merchandise imports had more than doubled.   
53. The representative of Honduras
 wanted to know what methodology had been used as the basis 
for stating that the average customs clearance ti me was ten minutes, what Aid for Trade projects 
Oman had received since 2002 and what suppor t had been given to trade facilitation. 
54. The representative of Singapore  said that Singapore had establishe d diplomatic relations with 
Oman in 1985.  Bilateral trade had increased in 2007 while investment remained minor.  Singapore's 
companies had participated increasingly in Oman's  economic progress and had identified potential for 
investment.  The 2003 Avoidance of Double Taxatio n Agreement and the 2007 Investment Guarantee 
Agreement had deepened further their relations, whic h had also strengthen within the context of the 
GCC.  The GCC was Singapore's seventh largest trading partner.  In 2008, they had concluded the negotiations on an FTA covering tr ade in goods and services, e-commerce, government procurement,  WT/TPR/M/201 
 Page 13 
 
 
customs, and cooperation;  market access for goods  would be free of duty.  The FTA would allow 
service providers to reap benefits in architecture, engineering, air transport services, and retail sale of fuel services.   
55. The representative of Pakistan
 noted that Oman was a net importer of services;  therefore, it 
offered generous incentives to fore ign and national investors.  Paki stan and Oman were negotiating a 
bilateral trade agreement to boost their stagnant trad e volume.  Pakistan thanked Oman's Ministry of 
Commerce and Industry for establishing the Pak-Om an Joint Investment Company and facilitating 
business in goods and services procurement.   
56. The representative of Tunisia  noted that the growth of the non-petroleum sector had increased 
significantly in 2007 as compared with 2006.  Oman had signed several bilateral agreements 
(including the one with Tunisia) and also agreements  within the framework of the GCC.  It seemed to 
Tunisia that the real challenge for Oman was to continue along the path of reform, notwithstanding 
the current international circumstances.  Tunisi a congratulated Oman on the course it had set itself 
with a view to achieving the objectives of its Vision 2020 .   
57. The representative of Turkey  said that Oman's privatization programme would help to 
increase job opportunities.  Oman considered re gional trade initiatives as complementary to the 
multilateral trading system.  Bilateral trade with Oman had reached US$65 million in 2007;  Turkey 
and Oman were committed to increasing and diversif ying their cooperation.  Mutual recognition in 
standards and double taxation agreemen ts were in place.  Turkey and Oman were negotiating a FTA 
within the context of the GCC;  Turkey hoped th at the successful conclusion of these negotiations 
would further enhance their trade relations.   
58. The representative of Jordan  hoped that Oman would achieve its ambitious objectives set out 
in Oman Vision 2020, in particular economic divers ification.  Oman's privatization programme would 
ensure higher transparency and predictability in its economic and trade regime.  Jordan and Oman 
enjoyed trade and economic cooperation;  their bila teral trade had been increasing constantly.   
59. The representative of the United States  said that U.S. bilateral trade with Oman had increased 
in 2007, and U.S. FDI had amounted to over US$800 million in 2006.  The U.S.-Oman FTA had 
eliminated trade barriers (including duties on all tari ff lines);  a number of Oman's reforms pursuant to 
its FTA obligations would benefit its other trading partners (e.g. strengthening IPR protection and 
enforcement).  The United States encouraged the GCC to accelerate its efforts towards reducing 
barriers to trade, harmonizing regulations, and incr easing transparency, in conformity with the WTO 
Agreements.  The United States commended the Government's reliance on Oman's comparative 
advantage in energy-intensive industrial projects but cautioned it not to go against the market-driven 
forces (e.g. in the iron and steel market).  Th e United States encouraged Oman to pursue its 
privatization goals.  Several SOEs  still operated under monopoly, or  held exclusive rights.  The 
United States looked forward to hearing about Oman 's plans to end Omantel's monopoly in the fixed-
line telecom market and to implement pro-competiti ve regulatory reforms c onsistent with its 2000 
GATS Schedule of Commitments (i.e. allowing unlimite d market access).  It urged Oman to improve 
trade facilitation, by eliminating the consular ization requirement.  The United States expressed 
concerns about Oman's intentions to ensure tran sparency and opportunity for comment on technical 
regulations and conformity assessment requirements,  including at the GCC level and about Oman's 
import licensing requirements and questionable practices  in customs valuation, shelf-life, subsidies, 
and free zones.  The United States hoped to learn mo re about Oman's policies in these areas.  They 
also hoped that the TPR would draw Oman's attention to areas where it could further liberalize its 
regime and improve its WTO commitments. 
60. The representative of Oman  thanked delegations for their inte rventions and said that he would 
answer the day's comments during the second session of the review meeting.    WT/TPR/M/201 
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V. REPLIES BY THE REPRESENTATIVE OF OMAN AND ADDITIONAL 
COMMENTS 
61. The representative of Oman
 stated that he would answer th e issues raised by the discussant 
and the Members on the first day of the review meeting.   
62. Replying to the discussant, he said that economic diversification was going on well.  The oil 
and gas contribution to GDP should have been arou nd 40%, and not 50%;  this higher participation 
was due to high oil prices and did not mean that dive rsification had not been working.  Diversification 
was aimed at developing other sectors (e.g. tourism,  knowledge economy, trade, and other services);  
and using natural gas and crude o il in value-added industries (e.g. petrochemicals) in Oman.  These 
industries helped small and medium-sized enterprises (SMEs).   
63. Privatization was also going well and much faster than planned in some areas.  The State did 
not fully own manufacturing industries anymore, ex cept in the oil and gas sector.  Most services had 
been privatized, including insura nce services.  The State owned only specialized banks (development 
banks and housing banks).  Two cement plants had been  totally or partially privatized, as well as flour 
mills.  Four state-owned hotels woul d be privatized in 2009.  Oman had been the first Member to 
privatize the power sector;  it was also looking at privatizing power transmission and distribution.   
64. Over the past 15 years, there had been deflation in Oman;  inflation had suddenly appeared in 
the last two years.  However, it was world wide, due to increases in, inter alia , commodities, food, 
and oil prices.  Since oil prices had increased, money and liquidity had flooded into the market and many projects had come up, thereby overheating the economy and creating inflation.  To lessen 
inflation, the Central Bank had sterilized liquidity  through limited certificates of deposits, increased 
reserve requirements, and decreasing the lending depos it ratio.  In addition, salaries had been raised 
twice;  fuel prices had not been increased furthe r;  and projects under the Tender Board had been 
reduced. 
65. In response to the EC, Oman was revising its Foreign Capital Investme nt Law to make it 
more liberal and compliant with the Common Commerc ial Law.  There were very few limitations to 
FDI and some would be removed or further liberaliz ed.  FDI was not prohibited in tourism;  Oman 
hoped that the EC and other Members would invest  in its tourism sector.  The GCC was actively 
working on a competition legislation that should be finalized by 2009.  On the issue of notifying the 
GCC customs union to the WTO, the GCC position would be clarified soon.  Oman disagreed with the EC's observation on the GCC CET;  Oman had always implemented any decision agreed within 
the GCC.  However, the GCC CET did not apply to 100% of tariff lines due to sensitive items;  this 
was in accordance with the WTO rules.  Oman had stepped up and would improve its IPR 
enforcement.  It would consider possible accession to the GPA. 
66. Replying to Japan, the representative said th at FDI was not banned but a few sensitive sub-
sectors were still not open.  Oman had made commi tments on some 95 services subsectors which was 
a lot for a small developing country.  Members had the right to protect sens itive sectors with social 
implications;  Oman doubted that any Member (i ncluding Japan) had made commitments on all the 
151 services subsectors.  The Foreign Capital Invest ment Law was being revised and the 70% foreign 
equity limit was already being applied;  the revised Law would enter into effect soon.   
67. Regarding questions from the United States, th e representative stated that the GCC was 
working on, and making progress in, harmonizing regul ations, ensuring transparency, and reducing or 
removing barriers to trade.  Oman planned to end the current monopoly in the fixed-line telecom 
market before the end of 2008.  The process of awarding fully-fledged fixed services licences 
(including radio spectrum for fixed broad-band infrastructure base) would be completed for applications for individual fixed services licen ces.  A public consultation paper on rules and 
procedures for Class I licence applications had b een published on the Telecommunications Regulatory  WT/TPR/M/201 
 Page 15 
 
 
Authority website.  A proposal on consular auth entication of documents was being negotiated under 
the DDA;  Oman would accept any consensus decision.  It stood ready to hold further consultations 
on licensing requirements, customs valuation, shelf-life, subsidies, and free zones.  Oman did not market iron and steel;  it had received many appl ications for iron and steel projects due to its 
geographical location and the needs in India and Ch ina, but had not authorized them because it was 
short of gas, which was needed for its ow n petrochemical- and gas-based industries. 
68. To the Republic of Korea, the representative sai d that prohibition of land ownership did not 
impede FDI.  Foreign investors were allowed to  lease land for 50 years (renewable), which enabled 
them to establish and operate manufacturing or ser vices companies.  The 70% foreign ownership was 
not an absolute limit;  in many cases, fully foreign- owned subsidiaries or branches were allowed, as 
well as 100% foreign equity.   
69. Regarding questions by Hong Kong, China, the representative stated that Oman had already 
made significant and commercially meaningful commitments on services;  it would consider submitting a revised offer, as well as further progressi ve liberalization.  On the gap between the bound 
and applied tariff rates, the principle of binding was that applied tariffs should not be over the bound 
rates, but might be and could be lower.  The bound rates provided predictability.  The WTO rules did 
not say nor imply that the applied rates should be at, or close to, the bound rates.   
70. In response to Brazil, he indicated that nearly  all of Oman's tariff lines ranged between zero 
and 5%;  the increase to 200% was due only to toba cco, alcohol, and pork, for health and religious 
reasons.   
71. With respect to a question on customs clearan ce, from Honduras, the representative said that 
the time required to clear imports had been reduc ed substantially as the Customs Department had 
automatized clearance procedures.  Oman would submit a written reply on aid for trade projects.   
72. The discussant
 noted that Members' concerns related mainly to:  areas of challenges faced by 
Oman in its diversification process;  the privatiza tion programme;  the restrictions in land ownership 
and investment in certain sectors;  the Omanization programme;  the consular certification 
requirement;  and the absence of competition legisl ation.  He appreciated Oman's comprehensive 
replies.  Members had referred to the growth in th eir bilateral trade volumes and the expansion of the 
tradeable basket of goods and services with Oman.  This showed that trade could become a tool for 
economic growth and socioeconomic development.  Few Members express ed interest for, or offered 
support to, Oman's needs for technical assistance;  the discussant urged Members to help Oman to 
participate fully in the multilateral trading syst em.  Oman remained committed to a successful 
conclusion of the Doha Round.  The TPR process helped Members to see whether there was any 
divergence between their economic c onditions, future plans, or comme rcial laws and regulations, and 
their WTO obligations;  the discussant hoped that this Review would have a positive outcome for 
Oman.   
73. The representative of the EC  appreciated the additional information on economic 
diversification and privatization, a nd clarifications on FDI.  If further clarification was needed, the EC 
would follow-up bilaterally.  The EC noted that Oman  was discussing with its partner the notification 
status of the GCC customs union and looked forward to  its possible reconsideration.  The EC hoped to 
reinforce bilateral trade and cooperation relations with Oman through a region-to-region FTA with the 
GCC.  It hoped that this TPR had been a useful exercise for Oman.  
74. The representative of United States  said that the United States was impressed with the 
quantity and quality of Oman's work in its first TPR,  which showed its commitment to the WTO.  The 
United States was pleased with the development of bilateral trade relations.  Oman was on a course to 
continue towards higher prosperity levels.  The Un ited States appreciated Oman's additional replies;  WT/TPR/M/201 
Page 16  
 
it would submit some further questions, through the S ecretariat, on issues where clarification was still 
needed.   
75. The representative of Japan
 appreciated Oman's clarifications.  Japan hoped that its FTA 
negotiations with Oman (in the context of th e GCC) would progress and develop further their 
economies.   
76. The representative of Australia  appreciated Oman's replies.  While the TPR process in 
Geneva might seem brief, Australia recognized Oman's  hard work and preparation.  Australia looked 
forward to following up bilaterally if any clarification was required.   
77. The representative of Oman  stressed that the TPR process had allowed Oman to inform 
Members about its economic and trade polices.  Oman was adhering to the WTO principles, rules, and 
procedures and abiding by its multilateral obligati ons.  The TPR mechanism provided transparency 
and understanding of the Members' trade policies;  the TPR reports were highly appreciated by, inter 
alia, businessmen and trade experts.  
  WT/TPR/M/201 
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
78. This first Trade Policy Review of the Sultanate  of Oman has given us a better understanding 
of its trade and related policies, and of the challe nges it faces. Our discussions have greatly benefited 
from the full and open engagement of the high-leve l Omani delegation led by H.E. Mr. Maqbool Ali 
Sultan, Minister of Commerce and Industry, as we ll as the insightful comment s by the discussant, and 
the thoughtful interventions by many delegations. 
79. Members commended Oman on its impressive economic performance over the past few 
years, with high real GDP growth, low inflation,  and surpluses in its overall fiscal position and its 
external current account. This was a result of its lib eral trade regime, its m acroeconomic reforms and 
development strategy implemented since the mid 1990s, and high oil and na tural gas export earnings 
as from mid 1999. Members also appreciated Oman's efforts to diversify its economy away from 
crude oil, and for ensuring intergenerational equity  in the exploitation of its non-renewable resources, 
through the improvement of education and health services, and modernization of its infrastructure. 
Delegations also praised Oman for the steps taken to  improve its investment climate, but urged it to 
remove the remaining prohibitions on foreign ownership. 
80. Members welcomed Oman's commitment to the WTO, including the DDA negotiations, and 
encouraged it to fully meet its notifications un der various WTO Agreements. Oman's market for all 
products is quite open, and the bulk of its trade ta kes place on an MFN basis. Nonetheless, delegations 
noted Oman's participation in the Gulf Cooperation Council (GCC), the Pan Arab Free-Trade Area (PAFTA), as well as in bilateral trade agreements, mo st of which are not yet fully implemented. The 
need to maintain the notification of the GCC unde r Article XXIV of GATT 1994 was also mentioned.  
81. Members asked Oman to reduce th e gap between its MFN applied average tariff of 5.5% and 
its average bound tariff of 13.8%. Some delegations also raised concerns about Oman's requirement 
for consular formalities on imports, and the use of minimum import prices on tobacco and tobacco products. Members also noted the absence of compe tition legislation. They encouraged Oman to 
amend its government procurement regime to re move the price preferences for domestic and GCC 
products, and accede to the Plurilateral Agreemen t on Government Procurement. Members urged 
Oman to further reduce state ownership throughout the economy by pursuing its privatization programme. They sought information on the developm ent plans regarding oil and natural gas, and 
manufacturing. Some Members requested clarification on the import restrictions maintained by Oman, notably on SPS and TBT grounds. Other issues of interest to Members in cluded incentive schemes 
(e.g. for exports); protection of intellectual propert y rights; agriculture and fisheries (state support); 
and services, including GATS commitments, financial services, telecoms, transport, and tourism. 
82. Members appreciated the responses provided by the Omani delegation, and look forward to 
receiving written answers to any outstanding questions within one month. 
83. In conclusion, Members congratulated Oman on the relative openness of its economy. They 
encouraged it to pursue its reforms, including by further improving its multilateral commitments on 
goods and services. This would enhance the transparency  and predictability of its trade regime, and its 
adherence to WTO principles.  Members could help  by keeping their markets open for products and 
services of interest to Oman, and by  providing technical assistance.  
__________