Gulf Cooperation Council (GCC) Market Profile

Market Overview:

U.S. exports of U.S. agricultural products to the Gulf Cooperation Council (GCC-6) members (Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates (or UAE), and Saudi Arabia) increased 1% to nearly US$3 billion in 2016. U.S. exports of consumer food products dropped 10% in 2016 and totaled nearly US$1.7 billion, which was 56% of the agricultural total. This partner group is a solid importer of U.S. processed foods, totaling US$1.2 billion, a decline of 2% from the prior year. 

Top U.S. processed food exports to the region in 2016 included food preparations, fats and oils, condiments and sauces, snack goods, processed/prepared dairy products, processed vegetables and pulses, chocolate and confectionery and non-alcoholic beverages. Saudi Arabia is the largest export market of the group with 47.2% of the region’s total and the UAE now accounts for 38.5% making them the dominant markets for U.S. food products in the region, although the smaller markets are likely to receive more U.S. foods indirectly. Saudi Arabia and the UAE are now the 19th and 22nd largest markets from the U.S. for agricultural products, and are frequently in the top 10 of most major processed food export categories.

The U.S. has Free Trade Agreements (FTAs) with two of the six GCC-6 countries. The U.S.-Bahrain Free Trade Agreement (FTA) entered into force on August 1, 2006.  Bahrain is the first U.S. FTA partner on the Arabian Peninsula and the third FTA partner among Arab countries (Jordan and Morocco are the others). The U.S.-Oman FTA, which went into force on January 1, 2009, significantly opened U.S. trade with Oman in goods and services by eliminating most tariff and nontariff barriers. Under the market access provisions of the FTA, almost all consumer and industrial goods and 87% of all agricultural tariff lines were given duty-free access. Both countries agreed to phase out all tariffs on the remaining eligible goods by 2019.

The GCC confers special trade and investment privileges to member countries.  Processed food products manufactured in any of these countries can be exported to other GCC countries duty-free. The GCC formally instituted its Customs Union over a decade ago. A 5% across-the-board common external tariff now applies to most imported food and agricultural products that enter from non-GCC suppliers. There are plans however to introduce a new value added tax (VAT) of 5% by 2018. 

Also, the GCC is moving forward with its plan for greater economic integration. In 2008, the GCC launched a common market, believing the agreement would increase investments and trade between member countries as well as strengthen the position of member states in free-trade talks and in the WTO. The common market requires that the GCC harmonize various regulations including food and agricultural imports standards. 

The advantages for U.S. exporters of consumer ready food products to the region are numerous. They include a high quality image of U.S. products, high regional per capita incomes, and a broad familiarity with U.S. culture. There is an increasing interest in U.S. products, as well as an increasing number of tourists to Bahrain, Oman and the U.A.E. in particular; and a U.S. military presence in Kuwait and Qatar. There are also consistently low tariffs and relatively transparent import procedures.

The challenges in the region for U.S. exporters are also apparent. There is significant competition from producers in European Union (EU), Asia, Australia, New Zealand and, increasingly, from local and regional processors. There is also the large Indian subcontinent population with easy access to "home grown" products and modest income.  U.S. goods are viewed as those with a higher price, one in part caused by higher freight rates for U.S. foods compared to other regional suppliers. Importers often want to start with small quantities and consolidate shipments, and often find there is a lack of interest from some U.S. exporters who are not willing to entertain small orders, as well as meet local labeling requirements.  

The Gulf Cooperation Council-5, (the aforementioned less Saudi Arabia), countries covered by USDA’s Office of Agricultural Affairs, OAA, in Dubai, hereinafter referred to as “Post” are a relatively homogeneous group of small nations with a total population of just over 16 million. Energy is the main source of revenue and per capita income levels are high.  All GCC countries experienced economic growth in 2016.  

Best Product Prospects:

Post advises that U.S. consumer food products with good potential into the GCC-5 region include almonds (shelled), condiments and sauces, halal poultry meat and beef (chilled and frozen), breakfast cereals and confectionary products. Snack foods, frozen vegetables, fresh apples and pears, edible oils, cheese, sweeteners and beverage bases also have good potential as well as fruit and vegetable juices, rice and pet foods.


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