GCC - Singapore Free Trade Agreement

The recent signing and implementation of the landmark GCC-Singapore Free Trade Agreement (GSFTA) is poised to bolster trade and create business opportunities between Oman and Singapore.

The GSFTA provides a framework for integration of the Gulf economy with that of the Asian financial center by promoting and facilitating the greater flow of goods, services, investment, and people between the two regions.

The Agreement also represents a political milestone for the GCC as the first Free Trade Agreement (FTA) entered into by the organization comprised of member states Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

The GCC is Singapore’s seventh largest trading partner, with bilateral trade reaching a record height of S$42.4 billion in 2007, up 127% since 2002. Total exports from the GCC to Singapore were worth S$34.8 billion, while Singapore exported an estimated S$7.5 billion worth of goods to the GCC. Singapore’s investments in the GCC totaled S$357 million in 2006. Oman’s primary exports to Singapore are petroleum crude, refined petroleum products, alcohols phenols and derive, lime cement stones, and heating and cooling equipment.

The GSFTA covers primarily Trade in Goods, Trade in Services, and Government Procurement. Additionally, it streamlines customs procedures, pledges ongoing cooperation in areas such as air services, Halal certification, and business visit cooperation, and commits the parties to complete negotiations on bilateral Investment Guarantee Agreements (IGAs) within two years.

Key elements of the GSFTA include:

1. Trade in Goods. The Agreement provides for comprehensive tariff elimination that will make each party’s goods more competitive vis-à-vis other foreign imports.
2. Customs. The GSFTA streamlines customs procedures for both countries, facilitating the flow of goods across borders. Under the Agreement, each party’s customs authorities will:

• • Provide an advance ruling on the eligibility of originating goods for preferential tariffs and tariff classification. Such a ruling will provide traders with greater certainty on the status of goods at the country of import.
• • Waive the requirement for a certificate of origin for low-value originating goods, allowing traders to save on time and cost.
• • Enhance transparency in customs controls so that traders can be fully aware of the customs requirements and procedures in their respective countries.