The US House of Representatives passed in late July the US-Oman free trade agreement (FTA) that will eliminate most duties on industrial and consumer goods. The US Senate approved the agreement in June, which remains to be signed by US President Bush (MEED 7:10:05).

'We expect the agreement to increase exports to the US, particularly garments and maybe petrochemicals and fertilisers in the future,' under-secretary for economic affairs Abdulmalik al-Hinai told MEED in May. 'There are few US companies in Oman. This agreement will persuade them to come.'

The US is the seventh largest destination for Omani non-oil exports. In 2005, the sultanate exported RO 19.1 million
($49.6 million) of non-oil goods to the US. The US is Oman's fourth largest source of imports, with RO 208.8 million ($542 million) of goods imported that year.

The pact is expected to encourage US investment in projects at the industrial port under development at Sohar. 'It is going to be very important for the second phase of Sohar: downstream industries,' said Manal Mohammed al-Abdwani, director-general of planning and follow-up at the Commerce & Industry Ministry. 'US investment is important for petrochemical and gas-based industries, it will gradually make a difference at the local level and we'll see the benefits of exporting [these products] to the US.'

The US' Dow Chemical Company has a stake in Oman Petrochemical Industries Company (OPIC). OPIC is building an ethane cracker, three polyethylene and two polypropylene units at Sohar, all scheduled to come on stream in 2009.