Discussions have been painstaking with complex issues to be resolved A range of issues have had to be examined including bank and insurance regulations, intellectual property rights as well as domestic subsidies.
But a positive conclusion is in sight. Deputy US Trade Representative Peter Allgeier has stated that Washington is close to agreement with Riyadh on the tariff cuts need to finalise a bilateral market access deal. “There is still work remaining particularly in services, but I remain hopeful that the accession process will reinforce reforms that are now underway in the Kingdom.”
In a speech to the Saudi-American Business Council during his recent US visit to meet President George W Bush, Crown Prince Abdullah said that “Economic reforms in the Kingdom have created a new investment-friendly environment that welcomes investors. We have enacted a clear and flexible taxation law, reorganised the capital market so that it matches international standards and have expedited the privatisation process.”
Fawaz al-Ami head of the Saudi negotiating team has said the Kingdom is ready to reduce agricultural subsidies and others as well as ending customs duties on some 1,500 agricultural and industrial products.
Any applicant for WTO membership must negotiate a bilateral market access deal with any of the 148 WTO members that requests one but a bilateral trade concord with the US is crucial
More than 30 such bilateral agreements have already been reached by Saudi Arabia the most recent with China. An agreement with the US following one already achieved with the European Union is likely to be the final hurdle with Saudi accession sealed possibly at the WTO ministerial meeting in Hong Kong in December.
America is a leading supplier of food, machinery and transport equipment to Saudi Arabia. The US ranks as Saudi Arabia’s biggest trade partner with bilateral trade reaching $26 billion last year. In addition, the US is also the Kingdom’s biggest foreign investor.
According to Holly Vineyard, US Assistant Secretary of State for Commerce the Kingdom “now offers a suitable atmosphere for investment.”
Looking ahead to strengthened trade links, A 50-member trade mission, the largest Saudi business delegation to travel to America in the last four years concluded a tour in May to promote inward investment in the Kingdom’s natural gas industry, petrochemicals, water and electricity, mining, transport as well as other key sectors.
The mission visited New York, Chicago, Atlanta, Houston and San Francisco with the aim of promoting investment projects valued at $613 billion to American companies. It was led by Khaled Ibn Musaed Al-Seif, chairman of the foreign trade development committee at the Council of Saudi Chambers of Commerce and Industry. The Saudi Arabian General Investment Authority together with Aramco and CSCCI arranged the mission which was sponsored in the US by ChevronTexaco, ExxonMobil, the US Departments of Trade and Energy and the Federation of American Industrialists.
Omar Bahlaiwa, secretary-general of the CSCCI committee said the response was ‘so good that the visit would be the beginning may more such trips’.
As well as concluding its bilateral trade agreements, Saudi Arabia is preparing a final accession document prior to meeting meet with all WTO members in July for talks on a multilateral agreement that will be designed to bring the Kingdom’s trade regulatory environment into line with international norms.
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