FTA Alert: GCC-South Korea FTA

Leaders from the GCC and South Korea recently held talks in an effort to finalize a GCC-South Korea Free Trade Agreement (FTA) by the end of this year. The GCC is South Korea’s second largest trading partner, just after China. The FTA is expected to result in a 400% increase in South Korean investments in the UAE, with similar increases expected in Oman.

Oman and South Korea have enjoyed particularly strong ties over the last several years and the FTA will bring great benefits to both countries. Oman exported $5 billion in oil and gas to Korea in 2006, while importing $350 million in Korean products and services in 2006. Korean exports to Oman grew 219% from 2004 to 2006, as Omani exports to Korea grew 207% in the same period.

Further evidence of the strengthening relationship between Oman and Korea can be found in last month’s launch of the Oman-Korea Friendship Association (OKFA). The OKFA will promote friendship and social ties between Oman and Korea. The founding members of the OKFA include senior members of the Suhail Bahwan Group, Oman Trading Establishment, Oman Oil, and Towell Auto Centre, among others.

The FTA will enable both Oman and Korea to further their existing strong relationship and will likely result in greater Korean investment in Oman.