The Oman-US free trade agreement: a door to the American market

Oman is one of the few countries in the Gulf region with a free trade agreement in force with the United States, an agreement that has been in place for close to two decades and that removes or reduces tariffs on a wide range of goods traded between the two countries. This distinguishes Oman from Gulf neighbors that do not have an equivalent bilateral arrangement with Washington, and it is one of the less discussed but genuinely useful features of doing business from Oman.

The agreement covers goods and, in various respects, services and investment, and it sits alongside Oman's broader network of trade relationships rather than replacing them. For a company weighing where in the Gulf to manufacture or process goods intended for the US market, the existence of this agreement is a relevant, checkable fact.

Agreements of this kind typically take years of negotiation before entering into force, and once in place they tend to remain a stable feature of the trade relationship rather than something renegotiated frequently, which gives companies planning around it a reasonable degree of long-term certainty compared with relying on general trade terms alone.

In general terms, a free trade agreement like this one allows goods that qualify under its rules to enter the partner country's market with reduced or eliminated tariffs, compared with goods coming from a country without such an agreement. This can make a real difference to the landed cost of a product in the US market, particularly for goods that would otherwise carry a meaningful tariff.

Whether a specific product qualifies depends on rules of origin, which set out how much of a good's value or processing needs to originate within Oman for it to be treated as an Omani product under the agreement. These rules are technical and specific to each product category, so a company should confirm eligibility for its own goods with the relevant Omani authority or a qualified trade advisor rather than assume qualification.

For a company deciding where to locate manufacturing or processing aimed partly at the US market, Oman's free trade agreement adds a consideration that does not apply in every Gulf location. Goods that are substantially transformed or manufactured in Oman, meeting the agreement's rules of origin, may be able to reach the US market on more favorable terms than the same goods shipped from elsewhere in the region.

This is particularly relevant when combined with Oman's free zones, since a company can potentially combine the ownership and tax advantages of a zone like Sohar or Duqm with the market access advantages of the US agreement, though each element needs to be verified separately with the relevant authority.

Oman's free trade agreement with the US does not exist in isolation from the country's other advantages. A manufacturer based in a free zone such as Sohar or Duqm can import raw materials through a port that sits outside the Strait of Hormuz, process them locally under free zone terms, and export finished goods to the US market with the benefit of the trade agreement, all within one location.

This combination, location, free zone terms, and preferential US market access, is part of what makes Oman worth a closer look for manufacturing investment aimed beyond the Gulf region itself, not just within it.

For Turkish and European companies exploring manufacturing or assembly operations in the Gulf, Oman's agreement with the US is a factor worth weighing if part of the intended output is destined for the American market, since it is not a feature shared by every potential Gulf location.

Yeke Gulf, the Oman-based company within Yeke Group, follows how these trade arrangements fit together as part of its broader work developing trade and projects between Türkiye, the EU and Oman, and treats Oman's US agreement as one more factor to weigh when structuring a manufacturing or export plan.