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Lower Tariffs Offer Freer Access to Bahrain and Oman
By Ron Verdonk, Hovaguim
Kizirian and Mohamed Taha
Bahrain and Oman, two small Middle Eastern nations, are providing expanded opportunities for U.S. agricultural exporters.
These countries reduced tariff rates for a wide range of goods, including food products, to give their consumers better access to a wider range of products and to enhance trade with the world.
Bahrain has abolished tariffs on many foods, including fresh fruits and vegetables, which had been 5 percent. Tariffs on semi-processed and consumer- ready food products remain at 5 percent.
Bahrain and Oman are both members of the Gulf Cooperation Council (GCC), an economic/political union of six oil-producing countries in the Arabian Gulf. The other GCC members are Kuwait, Qatar, Saudi Arabia and the United Arab Emirates.
In 1999, the GCC members signed an agreement to unify their tariffs by March 2005. This will help to facilitate trade among themselves and with other nations.
As for Oman, tariffs have been brought back to 5 percent across-the-board, except for essential products, which do not face a tariff. Little more than a year ago, tariffs for many food products in Oman had been increased to 15 percent.
What the Tariff Cuts Mean
Among Bahraini traders, there is a
degree of optimism that the tariff change may revive the
re-export business over the long term to neighboring countries
like Saudi Arabia, Iran and, potentially, Iraq.
For Oman, the decision to revert to previous lower tariffs is expected to return some U.S. processed food products to store shelves. With the duty hike in early 1999, these products either disappeared or lost market share, competitive victims of tariffs that made them more expensive than local products.
The Omani government’s
decision to lower tariffs could benefit consumers and local
traders alike. It will also reduce overland imports from the
re-export capital of the Gulf, Dubai.
Background on Oman and Bahrain
Naturally, both countries’ fortunes are tied to the oil industry. Petroleum production and processing account for about 60 percent of Bahrain’s export receipts and 75 percent of Oman’s earnings.
Bahrain mainly buys goods from Saudi Arabia, the United States and the United Kingdom. Oman imports mainly from the United Arab Emirates, Japan and the United Kingdom. Note that among the GCC countries, Kuwait and the United Arab Emirates have no food import duty.
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The authors are respectively the Director and Marketing Specialists at the Agricultural Trade Office in Dubai, United Arab Emirates. Tel.: (011-971-4) 331-4063; Fax.: (011-971-4) 331-4998 E-mail: atodubai@fas.usda.gov
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