Minister of Commerce and Industry Dr. Hashim Yamani issued a press release today on the bilateral agreement concluded yesterday with the European Union concerning the Kingdom's application to accede to the World Trade Organization (WTO). The statement explained the advantages to be achieved by accession to WTO, and that the agreement gives the Kingdom access to markets in the sectors of goods and services. To date, the Kingdom has signed bilateral agreements with 14 of its trade partners, and others are under negotiation. If Saudi Arabia remains outside WTO, he said, it would lead to isolation and a definite weakening of the Kingdom's ability to contribute to international decisions, participate in comprehensive trade negotiations, or draft new agreements. The Kingdom would also lose the chance to raise issues of concern to its economy or defend its vital economic and commercial interests during times of revision of other countries' commercial policies. On the other hand, the Kingdom's accession to WTO will provide it with the opportunity to work alongside other countries, especially the developing world, for joint goals, and use its economic influence to direct the course of globalization towards its own interests. WTO membership will achieve the following:
1. WTO membership will shield the Kingdom against unilateral measures and partial commercial policies, thereby lessening the risks facing Saudi producers and exporters.
2. Saudi exports will have the right of full access to the markets of WTO members, and enjoy mutual and unprejudiced treatment. Instead of being tied to bilateral agreements with each trade partner, the Kingdom will have the right to all the privileges and benefits provided by a package of international agreements concluded within the framework of WTO. The Kingdom will then avoid being subject to any arbitrary practices that might be based on the political or economical motives of other countries.
3. Saudi exports of goods and services to WTO members will benefit from the continuous efforts to liberate global trade, providing such goods and services with secure access to world markets according to clear conditions and agreed-upon provisions.
4. Saudi exports will enjoy treatment equal to that for local products in other member countries.
5. Saudi exports will not be subject to fines for dumping, unless stated in WTO regulations.
6. WTO membership will promote the Kingdom's economic reform program while the opening of the Saudi market to foreign goods and services will help accelerate privatization, enhance competition, and make the Kingdom more attractive to foreign investment.
7. Openness will serve as an incentive to producers and Saudi company owners to become more efficient in order to face the challenges created by the entrance of foreign imports.
8. WTO members are committed to seeking solutions for commercial disputes through arbitration mechanisms.
9. The Kingdom's accession to the WTO will add greater vivacity and vigor to its economy, guarantee its integration into the global multilateral commercial order, and preserve its momentum for sustainable economic development and growth.
10. The Kingdom's presence in the organization will enable it to effectively participate alongside the developing group in decision making and defending their collective basic interests.
The minister reviewed the Kingdom's achievements the last few years in reforming and restructuring its economy, by:
1. setting up new establishments aimed at accelerating decision-making, such as the Supreme Council for Petroleum and Minerals; the Supreme Economic Council; the Higher Commission for Tourism; and the Saudi Arabian General Investment Authority.
2. setting up organizational bodies aimed at forging mechanisms for organizing the local market, including the commission for telecommunications and information technology; the utilities commission; the commission for industrial cities; the financial markets commission; and the food and drug commission.
3. developing and enacting a number of commercial and investment regulations, including 25 regulations which have so far been issued and 15 in advanced stages of study.
4. issuing a decision to implement the strategy of privatization of some 20 government facilities.
5. shrinking the negative list of foreign investment in order to diversify the economic base.
6. reducing the rate of taxes on the profits of foreign companies, with unlimited transfer of losses.
A spokesman for the European Trade Commission announced in Brussels on Saturday that the European Union had agreed to back Saudi Arabia's candidacy for the WTO. To ensure its seat, Riyadh will now only have to conclude bilateral negotiations with the United States, its second largest trading partner. The EU is Saudi Arabia's top trading partner with a total bilateral trade turnover of around 27 billion euros (U.S. $29.5 billion) in 2002.