WORLD  TRADE  
ORGANIZATION  WT/TPR/S/201/Rev.1 
5 August 2008  
 
(08-3721) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
OMAN 
 
Revision 
 
 
 
 
This report, prepared for the first Trad e Policy Review of Oman, has been drawn 
up by the WTO Secretariat on its own responsibility.  The Secretariat has, as 
required by the Agreement establishing  the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Om an on its trade policies and practices. 
 
Any technical questions arising from this report may be addressed to 
Messrs. Ricardo Barba (022/739 5088), Samer Seif El Yazal (022/739 5459), 
Carlos Pérez del Castillo (022/739 53 36), or Jacques Degbelo (022/739 5583). 
 
Document WT/TPR/G/201 contains the policy statement submitted by Oman. 
 
 
 
 Oman WT/TPR/S/201/Rev.1
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 CONTENTS 
    Page 
SUMMARY OBSERVATIONS vii 
(1) T HE ECONOMIC ENVIRONEMENT  vii 
(2) I NSTITUTIONAL FRAMEWORK  vii 
(3) T RADE POLICY INSTRUMENTS  viii 
(4) S ECTORAL POLICIES  ix 
(5) T RADE POLICY AND TRADING PARTNERS  ix 
I. ECONOMIC ENVIRONMENT 1 
(1) M AJOR FEATURES OF THE ECONOMY  1 
(2) R ECENT ECONOMIC DEVELOPMENTS  2 
(3) T RADE PERFORMANCE AND INVESTMENT  4 
(i) Trade in goods and services 4 (ii) Foreign direct investment 8 
(4) O
UTLOOK  9 
II. TRADE AND INVESTMENT REGIMES 11 
(1) T HE INSTITUTIONAL FRAMEWORK  11 
(2) T RADE POLICY FORMULATION AND IMPLEMENTATION  12 
(3) P OLICY OBJECTIVES  14 
(4) T RADE AGREEMENTS  14 
(i) WTO 14 (ii) Regional agreements 16 
(iii) Bilateral agreements 17 
(iv) Other preferential arrangements 17 
(5) I
NVESTMENT FRAMEWORK  18 
ANNEX II.1:  AID FOR TRADE 20 
III. TRADE POLICIES AND PRACTICES BY MEASURE 22 
(1) I NTRODUCTION  22 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  22 
(i) Registration and documentation 22 (ii) Customs procedures and valuation 23 
(iii) Rules of origin 24 
(iv) Tariffs, other duties, and taxes 24 (v) Import prohibitions, restrictions, and licensing 28 
(vi) Contingency trade remedies 30 
(vii) Standards and other technical requirements 30 (viii) Government procurement 34 
(ix) Local-content requirements 35 
(x) Other measures 35 WT/TPR/S/201/Rev.1 Trade Policy Review 
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     Page 
(3) M EASURES DIRECTLY AFFECTING EXPORTS  35 
(i) Registration and documentation 35 
(ii) Export duties and taxes 35 (iii) Export prohibitions and restrictions 35 
(iv) Export subsidies, finance, insurance, and assistance 35 
(v) Free zones 37 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  38 
(i) Incentives 38 
(ii) Competition policy and price controls 38 (iii) State trading, state-owned enterprises, and privatization 39 
(iv) Intellectual property rights 40 
IV. TRADE POLICIES BY SECTOR 44 
(1) I
NTRODUCTION  44 
(2) A GRICULTURE , FISHERIES , AND RELATED ACTIVITIES  45 
(i) Main features 45 (ii) Agricultural policy 46 
(iii) Fisheries 48 
(3) M
INING , QUARRYING , AND ENERGY  50 
(i) Mining and quarrying 50 
(ii) Crude oil 53 (iii) Natural gas 55 
(iv) Electricity 56 
(4) M
ANUFACTURING  58 
(5) S ERVICES  61 
(i) Overview 61 
(ii) Financial services 61 (iii) Telecommunications and postal services 65 
(iv) Transport 68 
(v) Tourism 72 
REFERENCES   75 
APPENDIX TABLES  77 
 
  Oman WT/TPR/S/201/Rev.1 
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 CHARTS 
    P a g e  
I. ECONOMIC ENVIRONMENT  
I.1 Structure of merchandise trade, 2000-06 6 
I.2 Direction of merchandise trade, 2000-06 7 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Breakdown of applied MFN tariff rates, 2008 25 
III.2 Tariff escalation by ISIC 2-digit industry, 2008 27 
IV. TRADE POLICIES BY SECTOR  
IV.1 Tariff protection in the manufacturing sector, 2008 60 
 
TABLES 
I. ECONOMIC ENVIRONMENT  
I.1  Oman at a glance, 2008 1 
I.2 Selected economic indicators, 2001-07 3 
I.3 Balance of payments, 2000-06 4 I.4 Foreign direct investment, 2002-06 9 
II. TRADE AND INVESTMENT REGIMES  
II.1 Main trade-related laws, 2008 13 
II.2 Selected notifications to the WTO, April 2008 15 
II.3 Bilateral investment treaties, April 2008 19 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Structure of MFN tariffs, 2008 24 
III.2 Summary analysis of the applied MFN tariff, 2008 26 III.3 Prohibited imports, 2008 28 
III.4 Restricted imports, 2008 29 
III.5 Summary of IPR legislation, 2008 40 III.6 Participation in international IPR agreements, 2008 41 
IV. TRADE POLICIES BY SECTOR  
IV.1 Main agricultural products, 2000-05 45 
IV.2 Fish production, 2000-06 48 
IV.3 Mining permits and leases, 2008 51 
IV.4 Oil production, exports, and refinery, 2002-06 53 IV.5 Natural gas production, 2004-06 56 
IV.6 Electricity and water production and distribution, 2001-06 57 
IV.7 Electricity tariffs, 2008 57 WT/TPR/S/201/Rev.1 Trade Policy Review 
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     P a g e  
IV.8 Value added, investment, exports, and employment in the manufacturing sector, 2005 58 
IV.9 Securities market, 2002-06 65 
IV.10 Selected telecommunication indicators, 2002-07 66 IV.11 Shipping and maritime transport services, 2001-06 69 
IV.12 Air transport services, 2001-07 71 
IV.13 Tourism main indicators, 2001-07 73 
 
APPENDIX TABLES 
I. ECONOMIC ENVIRONMENT  
AI.1 Structure of exports (including re-exports), 2000-06 79 
AI.2 Structure of imports, 2000-06 80 
AI.3 Destination of exports (including re-exports), 2000-06 81 AI.4 Origin of imports, 2000-06 82 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
AIII.1 Applied MFN tariff averages by HS2, 2008 83 
AIII.2 Mandatory standards, 2008 87 
IV. TRADE POLICIES BY SECTOR  
IV.1 Applied MFN tariffs, by ISIC Rev.2 category, 2008 90 
IV.2 Summary of Oman's specific commitments in services, 2008 93 
  
 
 Oman WT/TPR/S/201/Rev.1 
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 SUMMARY OBSERVATIONS 
(1) T HE ECONOMIC ENVIRONMENT  
1. Since the mid 1990s, the Sultanate of 
Oman has been implementing a development 
strategy centred on a liberal trade regime and 
aimed at, inter alia , reducing its high 
dependence on crude oil and natural gas (almost 50% of its GDP, 65% of government income, and over 90% of merchandise 
exports).  To this end, Oman is promoting 
downstream industries and tourism; improving education and health services; modernizing its infrastructure; and addressing some structural problems, including the privatization of state-owned enterprises (SOEs).  It has also 
established reserve funds aimed at ensuring 
inter-generational economic equity in the exploitation of its non-renewable natural wealth.  
2. The development strategy has resulted 
in high real GDP growth of 5.3% on average 
per year during 2000-07, and low inflation of 1.2% on average annually over 2000-07 despite a surge to a 16-year high of 5.9% in 2007, due partly to an increase in private and public consumption.  Oman has also registered 
surpluses in both its overall fiscal position 
(8.4% of GDP on average annually during 2001-06) and external current account (8.6% of GDP on average per year over 2001-07). With a population of around 2.6 million (26% 
being expatriates), and a per capita income 
estimated at US$14,500 for 2007, Oman's main economic and social challenge is to provide more employment opportunities for its citizens. The "Omanization" programme, 
aimed at promoting employment of Omanis, is 
being implemented. 
3. With the exception of Kuwait, all Gulf 
Cooperation Council (GCC) countries have their currencies pegged to the U.S. dollar.  The rial Omani (RO), the national currency, has 
been pegged to the U.S dollar since 1973 
(US$2.6 per 1 RO as from 1986). Oman accepted the obligations of Article VIII of the IMF Agreement on 19 June 1974.  It has no restrictions on capital receipts or payments by 
residents or non-residents.  In 2006, Oman ranked 44
th among world merchandise 
exporters (counting the EC as one), and 
57th among importers. Oman's merchandise 
trade is relatively diversified, with Middle East and Asian countries, notably the UAE and the Republic of Korea, as the main trading partners.  In services trade, Oman ranked 79
th 
among exporters and 47th among importers. 
Oman is, increasingly, a net importer of services, with a deficit averaging US$1,813 million per year during 2000-06, peaking at US$2,827 million (equivalent to 7.9% of GDP) in 2006.  
4. Oman's average annual inflow of 
foreign direct investment (FDI) jumped from RO 208.9 million in 2003 to an estimated RO 637.7 million in 2006, partly as a result of steps taken to improve Oman's investment 
climate, including through the establishment, 
in 1997, of the Oman Centre for Investment Promotion and Export Development.  Nonetheless, FDI inflows have been inhibited by, inter alia , the slow progress of parts of the 
privatization programme; prohibition of land 
ownership for foreigners, except in the new 
tourist areas; and prohibition of foreign investment in activities such as tourist guide, internal waterway, and taxi transportation. 
(2) I
NSTITUTIONAL FRAMEWORK  
5. Formulation and implementation of 
Oman's trade policy is the responsibility of the Ministry of Commerce and Industry, in coordination with other ministries. The private sector provides inputs to trade policy 
formulation through the Oman Chamber of 
Commerce and Industry on an ad hoc  basis. 
6. The WTO Agreements and the GCC 
Treaty are the main factors underlying Oman's trade policy.  The Government recognizes the importance of trade and investment to its 
overall goals.  To this end, Oman has been 
reviewing and amending its laws, including on 
contingency trade remedies, government WT/TPR/S/201/Rev.1 Trade Policy Review 
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 procurement, commercial companies, and 
investment. 
7. Oman deposited its instrument of 
ratification of accession and became a WTO 
Member on 9 November 2000.  It is a 
signatory to the WTO's Information Technology Agreement, and is an observer to the plurilateral Agreement on Government Procurement.  Oman has not been involved in 
any dispute under the WTO Dispute 
Settlement Mechanism, either directly or as a third party. 
8. Oman participates in the GCC, and in 
the Pan Arab Free Trade Area (in which all six States of the GCC take part). Under the GCC, 
negotiations for a trade agreement with the EC 
are continuing, and possible trade agreements are also being discussed with, inter alia , 
Australia, China, and New Zealand.  In 2005, Oman signed a trade agreement with the 
United States (not yet in force), becoming the 
second country in the region to do so, after Bahrain; the other GCC members are also negotiating bilaterally with the United States. GCC Heads of States have agreed that any new preferential agreement concluded by a 
member would apply pari passu  to all 
members, except for agreements with the United States. 
(3) T
RADE POLICY INSTRUMENTS  
9. Oman has a relatively simple MFN 
tariff; all rates are ad valorem , and there are no 
tariff quotas, and no other duties and charges on imports. Since 1 January 2003, Oman has been applying the GCC common external tariff, which consists of rates of zero (9.4% of 
all lines) and 5% (88.8%).  On alcoholic 
beverages, tobacco and tobacco products, and pork and pork products, Oman applies a 100% tariff (1% of the lines).  Oman's applied average MFN tariff rate is 5.5%, i.e. 9.9% on agriculture (WTO definition), and 4.6% on 
non-agricultural products.  Oman has bound 
100% of its tariff lines at rates ranging up to 200%, and averaging 13.8% (i.e. average bound rates of 28% on agricultural products, and 11.6% on non-agricultural goods);  this 
leaves margin for applied tariff increases. 
10. On aggregate, Oman's tariff displays 
positive escalation, from first-stage processed 
products, with an average tariff of 4.4%, to 
semi-finished goods, with an average of 4.8%, and fully processed products, on which tariffs average 6%. This positive tariff escalation stems from the lower applied tariffs (on 
average) on agricultural raw materials. At a 
more disaggregate level, there are mixed results: in some industries (e.g. textiles and apparel, wood produc ts, and non-metallic 
mineral products) tariffs are uniform from the first to the final stage of processing); 
otherwise, tariff escalation is mixed (negative 
from the first to the second stage, and then positive) in the food, beverages, and tobacco industry, reflecting the high rates on tobacco and spirits.  Escalation is negative in chemicals 
and plastics, and in the paper, printing and 
publishing industries, and other manufacturing because of duty-free imports of pharmaceuticals and certain books.  
11. The documentation for all imported 
products must be authenticated by the 
Consulate of Oman or representative, or any 
Arab Embassy in the country of origin.  Oman encounters some difficulties in implementing the provisions of the GCC customs law based on the WTO Customs Valuation Agreement, 
with goods such as tobacco and tobacco 
products still subject to minimum import prices. Import and export prohibitions and restrictions are maintained on a number of products, mainly for health, security, moral, 
and religious reasons. Om an is harmonizing its 
regime on standards and technical regulations at the GCC level. 
12. Oman has adopted the GCC Treaty 
provisions on contingency trade remedies, but has never used them.  Its government 
procurement regime provides for price 
preferences of 10% and 5% for local and GCC products, respectively.  Oman has no competition legislation per se , but provisions 
of legal instruments such as Sultani Decree Oman WT/TPR/S/201/Rev.1 
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 No. 38/2000 regulate aspects of competition.  
State ownership remains significant throughout the economy.  Oman is to enact new laws on intellectual property rights 
(IPRs), a prerequisite for the entry into force 
of its bilateral trade agreement with the United States.  During the last few years, Oman has made significant progress in enforcing IPR protection.  Nonetheless, under-the-counter 
sales of unauthorized software and DVDs are 
reported to persist in some locations. 
13. In addition to import duty concessions, 
other general incentives available in Oman, to national and foreign investors, include:  exemption from the tax on profits for five 
years (renewable for another five years);   
long-term use of land at favourable rates;  subsidized electricity, water, and natural gas for production;  and "soft loans" for up to ten years, with a moratorium period of up to 
three years, at a subsidized interest rate. 
(4) S
ECTORAL POLICIES  
14. In accordance with Oman's long-term 
development strategy (Vision 1996-2020), the contribution of agriculture and manufacturing to GDP are expected to increase, respectively, 
from 2.8% to 5%, and from 7% to 29% during 
the period, whereas the shares of services, and oil and natural gas are to  fall to 47% (52.3% in 
1996), and 19% (over 40% in 1996), respectively.  One major state-owned 
enterprise, Petroleum Development Oman, 
dominates oil and natural gas activities, either directly or in cooperation with foreign enterprises, through production-sharing agreements.  Oman is pursuing an intensive 
exploration drive to enlarge its known 
hydrocarbons reserves, so as to expand the duration of their exploitation, and broaden its production capacity.  Oman is also increasing its electricity network in order to meet growing demand.  The simple average applied 
MFN tariff on mining and quarrying (major 
division 2 of ISIC, Revision 2) is 4.9%. 
15. Services constitute a crucial 
component in Oman's overall policy of economic diversification. Private sector 
participation is being encouraged by removing obstacles to foreign investment. Several SOEs in the sector operate under monopoly, or hold 
exclusive rights in some branches (e.g. Oman 
Telecommunications Company, Oman Postal Company, and Oman Air).  Under the General Agreement on Trade in Services, Oman made commitments in all services categories, and 
has tabled its initial conditional offer in the 
ongoing services negotiations. 
16. Oman's manufacturing sector benefits 
from its relatively large endowment of hydrocarbons used as inputs by industries producing chemicals and liquefied natural gas. 
The Government holds 100% stake or is an 
important shareholder in some manufacturing companies (e.g. Salalah Methanol Company, Oman Polypropylene Company, and Oman Cement Company). MFN customs tariffs on 
manufactured goods (major division 3 of ISIC, 
Revision 2) average 5.6%, with rates ranging up to 100% on alcoholic beverages, and tobacco and tobacco products. 
17. Despite its small and decreasing share 
of total GDP, agriculture is an important sector 
in the economy because of Oman's food 
security objective, which is to be achieved mainly through relatively low customs tariffs. Oman is a net exporter of fishery products, but a net importer of agricultural products.  The 
simple average applied MFN tariff on 
agricultural products (major division 1 of ISIC, Revision 2) is 3.9%. The Government assists agricultural producers by offering basic infrastructure (e.g. drainage and irrigation 
facilities), soft loans, and free inputs, such as 
new seed varieties, fertilizers, and chemicals. 
(5) T
RADE POLICY AND TRADING 
 P ARTNERS  
18. Oman has a generally open trade 
regime, and the bulk of its trade has been 
liberalized on a unilateral basis.  Furthermore, 
it is a strong supporter of the WTO, and is participating actively in the ongoing multilateral negotiations.  Nonetheless, Oman WT/TPR/S/201/Rev.1 Trade Policy Review 
Page x 
 
 
 needs to bring some elements of its trade 
regime more up to date and into greater conformity with WTO provisions.  Continued reforms, including dismantling of the 
remaining impediments to FDI, and 
improvement of multilateral commitments, both on goods and services, could contribute to better resource allocation, and increase the predictability of its trade regime. 
19. Increasingly, a key element in Oman's 
reform process relates to full economic integration under the GCC.  In this regard, however, Oman has indicated that it would not join the GCC planned monetary union by 2010. Its membership in the GCC has 
contributed to GDP growth by improving competition in the economy, but has also detracted from multilateral efforts, given the 
increased demand on its limited administrative 
and negotiating resources.  Oman's future trade agreements, both at the GCC level and bilaterally, could further complicate this situation.  It is therefore important to consider 
the potentially greater advantages of further 
market opening on a multilateral basis. Trading partners could help by ensuring that their markets are fully open to goods and services of interest to Oman, and by providing more technical assistance.