For some time now, Saudi Arabia has been going through the procedures for accession to the World Trade Organization (WTO). The Kingdom's admission to the body, which will be the dominant force in international commercial and economic relations in the future, is expected to have immense benefits for other countries, notably the United States, as well as for Saudi Arabia itself.
The WTO arose out of the Global Agreement on Tariffs and Trade (GATT), an international agreement that was designed to eliminate trade barriers between countries. The WTO was created in 1995 to ensure and promote free trade among nations. It was the result of GATT's "Round of Uruguay" talks that lasted from 1985 through 1994.
The Saudi Cable Company in Jeddah is examples of successful joint ventures between Saudi and foreign companies.
In 1993, prior to the launch of the WTO, Saudi Arabia had applied to join GATT and had attended its meetings as an observer. With the establishment of the WTO, the Kingdom has focused its efforts on joining this international body. To facilitate its admission to the organization, Saudi Arabia has taken a number of steps to comply with its basic requirements. These include the introduction of a new code for taxing foreign invested capital, revision of regulations on sponsorship and a change in the law for ownership of real estate by resident foreigners. These laws will provide greater freedom of movement of foreign capital in the Saudi market and ensure greater ease of reinvestment and of disposition of the profits.
Saudi officials have on many occasions made clear the Kingdom's seriousness of intent to accede to the WTO. During his visit to the United States in September 1998, Crown Prince Abdullah Ibn Abdul Aziz, Deputy Prime Minister and Commander of the National Guard, met with members of the U.S.-Saudi Arabian Business Council in Washington, DC, and apprised them on investment opportunities in Saudi Arabia. In his meetings with U.S. officials, he stressed the point of the accession of Saudi Arabia to the WTO, and the official joint statement on his departure expressed support for this. In November 1999 Second Deputy Prime Minister, Minister of Defense and Aviation and Inspector-General Prince Sultan Ibn Abdul Aziz visited the United States and spoke of the process of privatization in the Kingdom, stressing Saudi Arabia's serious intent to join WTO. Again, a joint statement issued by Saudi Arabia and the United States expressed the Clinton administration's support for Saudi admission to the organization.
In fact, Crown Prince Abdullah and Prince Sultan have taken every opportunity during their recent travels abroad, to Europe and Asia, as well as to the United States, to emphasize Saudi Arabia's desire for a speedy admission to the WTO, an acceptance that would allow it to enjoy the opportunities that would open up for the Saudi economy.
To deliver comprehensive facts about investing in Saudi Arabia, the government has been organizing and participating in a number of international exhibits, which explain the continued development of the Saudi market and the changes being introduced to various commercial and economic regulations intended to enhance the business climate.
Within the country, a number of campaigns have been introduced to raise public awareness of the Kingdom's application to join the WTO and of its benefits. In regional efforts to promote the WTO's principles, Saudi Arabia has endorsed the Arab Free Trade Zone Model when embarking on bilateral trade agreements and is encouraging the Gulf Cooperation Council (GCC) to create a free trade zone among the six member states on the Arabian Gulf.
The benefits of Saudi accession to the WTO are not limited to Saudi Arabia but extend to other nations. The lowering of tariffs along with the liberalization of investment will create an atmosphere that will attract more foreign investors into the Saudi market, facilitating the Kingdom's continued development and diversification of its economy, and at the same time allowing foreign businesses and investors to profit from this process. Opening the door of investment for foreigners will transfer new technologies and will bring skills to the area through the training of Saudi labor. And most important of all, Saudi Arabia's products will be able to compete in the domestic, regional and international markets.
The private sector is also involved in the process of expediting the Kingdom's accession to the WTO. As part of this, several delegations of Saudi businessmen representing private sector industries have visited other countries to meet with government officials and business leaders.
One such delegation visited the United States in November to meet with their counterparts in the American private sector. During their visit they explained that although its infrastructure was set up by the government, today Saudi Arabia has a private sector that is mature enough to make major contributions to the Kingdom's future development. The business leaders also explained how the American private sector can benefit from the Kingdom's accession to the WTO, with lower customs rates and exports to the Saudi market free from restrictions.
International trade shows and exhibitions are contributing to spreading the word about investment opportunities in the Kingdom. As an example, the Saudi American Bank (SAMBA) over the past year has organized four such exhibits and sent delegations to more than 15 major cities in Asia, Europe and North America, directly contacting hundreds of foreign companies, many of whom are responding favorably. Other private sector entities and government agencies have undertaken similar ventures.
The most recent WTO ministerial conference took place in Seattle, Washington, from November 30 to December 3, 1999. Minister of Commerce Dr. Osama Faqih addressed the meeting and declared that Saudi Arabia had reached the final stage of the process of joining the organization, having introduced important proposals on the entry of commodities and services to its markets. In response to a question about the remaining stages of the process, he referred to the sixth round of negotiations held last September in Geneva, Switzerland, and said that although many areas had been covered, there were still issues under discussion at the bilateral level.
The Saudi market is one of the largest and most important for U.S. exports. It is continuously developing, in the best interests of all parties. Moreover, Saudi Arabia provides unique opportunities for joint ventures with American and other companies. The availability of energy and natural resources, proximity to important markets and its position at the crossroads of Europe, Africa and Asia make the Kingdom a logical site for the establishment of industrial facilities to manufacture goods for the domestic market and also for export to neighboring countries and beyond. Aware of the size and scope of the benefits the Kingdom's accession will have for all involved, Saudi Arabia is completing the required steps with support from the United States as well as organizations representing private businesses, such as the U.S.-Saudi Arabian Business Council.