Gulf Regional Legal Environment of Business 3 Essay

Gulf Regional Legal Environment of Business 3 - Essay Example Competition law is part of the legal environment of business in Gulf region that requires numerous amendments and enforcement. Competition laws facilitate the entry of foreign firms in the economy and ensure that the economy gains from increased product innovation and high quality products. Fair competition laws also facilitate bilateral and regional cooperation between several states thus strengthening both the economic and political relations. Oman has certain anti-competitive laws that hinder free trade in the economy. Examples of the anti-competitive laws include subsidies to the national companies, exempt of import custom duties for national companies dealing with agriculture and manufacturing and requirement that foreign entities cannot have 100 percent of shareholding of the investment. In addition, Oman grants tax exemptions to local shipping companies and uses discriminative tariffs that hinder fair competition within the Gulf region (Kawai & Wignaraja, 2011). 2. Free trade agreements One of the agreements that Oman has entered with other countries is the Gulf Cooperation Council free trade agreement that consists of other countries such as Saudi Arabia, United Arab Emirates, Kuwait, Bahrain and Qatar (Ramady, 2012). The free trade agreement is committed to improvement of investments and trade in goods and services. The agreement aims at elimination of both tariff and non-tariff barriers and expediting the movements of goods and services between the two countries (European Commission, 2013). Accordingly, members of the G.C.C acknowledge that anti-competitive practices restrict trade among the countries and each member is required to implement competition laws that ensure free and fair trading practices (European Commission, 2013). The GCC agreement aims at attaining liberalization of trade and promoting competition among the member countries. The parties to the agreement appreciate that anticompetitive trade practices will restrict the trade among the countries and the parties must maintain competitive laws. The agreement also aims at fostering common scientific progress in fields such as economy and trade and setting up of joint ventures. a. Importance and advantages of the agreements The G.C.C free trade agreement is expected to provide new export opportunities for Oman exports within the bloc. The trade agreement also aims at protecting intellectual property through allowing Oman to establish increased protection for copyrights, patents and trademarks (Bilateral.org, 2012). Accordingly, Oman will conduct government procurement procedures in free and transparent manner without any discriminatory practices. The free trade agreement will spur economic growth in Oman and entrench democratic ideals that are essential for peace and stability in the Gulf region (BBC News, 2013). Ramazani & Kechichian (1988) asserts that he G.C.C free trade agreement will increase the competitiveness of Oman exports through improving the access of the global markets. The agreement also will strengthen the role of the private sector in the economic development of the country. The trade agreement will enable Oman to lower the production process and increase the efficiency in the utilisation of the available raw materials such as oil reserves. All the products manufactured within the member countries are allowed to move freely within the member