Oman's accession to the World Trade Organisation (WTO) has had a significant influence on its law and economy

The WTO is located in Geneva, Switzerland and was established on January 1, 1995. It has 149 member countries (as on December 11, 2005), accounting for around 90 per cent of the world's trade.

It is a global international organisation with the aim of helping producers of goods and services, exporters and importers conduct their businesses more effectively. The organisation was set up to act as a successor to the General Agreement on Tariffs and Trade (GATT) which governed the rules of international trade from 1945 until 1995.

The WTO currently focuses on issues associated with free trade including intellectual property rights, investment, agriculture, and trade in services and manufactured goods. Generally, the principles to which WTO members need to agree are:

1. Extending trade concessions equally to all WTO members
2. Aiming for lower tariffs (the reason being that by creating tariffs or duty, tax is added to the cost of imported goods which increases the selling price on the domestic market)
3. Making trade more predictable through the use of common trading rules
4. Increasing levels of competition by cutting subsidies which prejudice the interests of another country

Decisions in the WTO are made by a consensus among all member countries and the decisions are then ratified by each member's domestic government. These WTO agreements are the legal ground rules for international commerce between member states. Essentially, they are contracts guaranteeing member countries important trade rights. They also bind governments to keep their trade policies within agreed limits, hopefully to everyone’s benefit.

The intention is that each member country receives guarantees that its exports will be treated fairly and consistently in the markets of other member countries. Each promises to do the same for imports into its own market.

While this sounds straightforward in theory, in practice significant issues arise that challenge the commitment of member states to WTO agreements. By way of example, a significant challenge for WTO adherence came from something as unusual as beef hormones. The European Union (EU) banned hormones in the use of beef production, based on some studies indicating that hormones could cause cancer. The US and Canada challenged the European Union ban, claiming it was motivated by anti-competitive reasons, and the WTO panel ruled against the European Union. It found that the ban was not soundly based, meaning that European consumers and governments were forced to accept imports of beef raised with hormones or otherwise be penalised with harsh trade sanctions.

The concern amongst WTO's critics is that proposed national laws may never be put into effect, or are weakened, because another nation threatens to mount a challenge with the WTO panel. Those critics argue that developing countries are especially vulnerable to such threats by more affluent developed nations, which have more resources, both legal and monetary, to take a case to the WTO. Supporters of WTO point to the massive increase in world trade over the past years and the benefits that the increase in trade brings to many nations.

Oman’s accession to the WTO
The Sultanate of Oman signed the Protocol of Accession to the WTO on October 10, 2000, under Royal Decree 112/2000 completing the process for Oman to become a member of the WTO, which it became officially on November 9, 2000.

The Sultanate of Oman recognised from the beginning its obligations to the WTO in joining the organisation and endeavoured to remove all obstacles to WTO membership during the period of negotiation. This led to the promul-gation of extensive new legislation and a number of bilateral agreements with member countries, including the EU.

WTO agreements
The following are the key set of agreements that were created in 1994 under the Uruguay Round Agreements which established the WTO. These are those agreements to which the Sultanate of Oman has agreed to abide by, through joining the WTO.

Marrakech agreement establishing the WTO
The Marrakech Agreement actually set up and established the WTO itself. It is also the agreement that member countries sign up to when they join the WTO. Annexed to the Marrakech Agreement are agreements on goods, services, intellectual property, dispute settlement and trade policy review mechanism.

General agreement on trade and tariffs (GATT)
GATT deals with the trade of goods and aims to lower customs duties and other trade barriers. GATT also requires member countries to make commitments on cutting some tariffs, in some cases to zero, and 'bind' others so that they cannot be raised. Other important aspects of GATT are the principles of non-discrimination between member states, and 'national treatment', which provides that imported and locally produced goods be treated equally once they have entered the country’s market.

In line with GATT, the Sultanate of Oman became a member of the World Customs Organisation as part of the requirements for the harmonisation of customs procedures under Royal Decree 21/2000 and also issued new regulations on the customs evaluation of imported goods through Royal Decree 83/2000. With regard to tariffs, Oman only had to make minimal changes because in relation to most sectors, the levels were below those required by the WTO.

The Sultanate of Oman has also become a member of the GCC Unified Custom Law under Royal Decree 67/2003, which has had a significant impact on custom duty payable on goods imported from other GCC states.

General agreement on trade in services (GATS)
GATS is a set of legally enforceable rules covering international trade in services and operates on three levels. The first containing general principles and obligations, the second, annexes dealing with rules for specific sectors and finally there are individual countries�specific commitments to provide access to their markets.

By joining the WTO and GATS, Oman is committed to allowing access to foreign service providers in many sectors including telecommunications; banking and other financial services; insurance; maritime transport; construction and education. Oman has also agreed to raise foreign participation in business entities from 49 per cent to 70 per cent (with a few minor exceptions). Corporate Income Tax rules have also been changed in light of the change in percentage of foreign participation, under Royal Decree 68/2000 and Royal Decree 69/2000.

Agreement on trade related aspects of intellectual property rights (TRIPS)
TRIPS covers how WTO principles should be applied to intellectual property (IP) and how best to protect IP rights. Its basic aim is to harmonise the extent of protection and enforcement of IP rights internationally.

In compliance with its obligations under TRIPS, Oman has issued extensive legislation in this area. It has also ratified two TRIPS treaties; the Paris Convention for the Protection of Industrial Property Rights and the Berne Convention for the Protection of Literary and Artistic Works. Both of these treaties contain provisions dealing with the mutual recognition, priority and enforcement of IP rights within member countries.

Future impact
Oman's accession to the WTO agreement has already had a significant impact on the laws of Oman. This is likely to continue over the coming years as the principles of free trade, through the WTO, continue to strengthen and impact on the economies and legal systems of all of the WTO member states.

The author is solicitor, trowers & hamlins, muscat. Tel: +968 24 682923
Email: CSchofield@trowers.com