EU-Saudi trade deal paves way for WTO entry
European Union (EU) Trade Commissioner Pascal Lamy and the Saudi Minister of Commerce and Industry Hashim A. Yamani have signed an agreement concluding the bilateral market negotiations for the accession of Saudi Arabia to the World Trade Organization (WTO).
The EU is Saudi Arabia’s main trading partner with bilateral trade reaching €27 billion in 2002. This signature comes after a month of intense negotiations that have allowed the conclusion of an ambitious agreement on the opening of the Saudi market to foreign goods and services, reported the Directorate General Trade of the European Commission (EC).
“The agreement reached with the EU is a step in the right direction,” said Saudi economist Mohammed Al-Sabban in Arab News . However, the date of Saudi Arabia’s entrance into the WTO is not clear. “There are numerous factors involved that need to be ironed out before one can speculate on when,” he said. “They include the conditions set forth by remaining WTO members and the time it takes Saudi Arabia to accomplish them… But I think the Kingdom’s will and determination to become a member of the WTO will also speed things up.”
The deal signed covers the commitments that Saudi Arabia will undertake at the moment of accession for both goods and services. The average tariff level that Saudi Arabia undertakes to apply for industrial goods will be close to 12 percent and similar commitments were undertaken for agricultural goods.
"The conclusion of the bilateral deal with the EU is an important step forward in the process of Saudi Arabia’s accession to the WTO,” said Lamy. Saudi Arabia's decision, to be relatively ambitious in its trade relations with its major partner, is a sign that should be welcomed by the international community."
"We particularly value the decision that Saudi Arabia has taken to comply with all WTO rules by the time of accession and to eliminate a number of obstacles to international trade like the bans on the importation of certain food products and the dual-pricing of gas products. I am today confident that the completion of the accession process is close, and that is another positive signal ahead of Cancun," added Lamy
In services, Saudi Arabia is offering commitments in a large number of sectors such as telecommunication, courier, construction, distribution, environmental, banking, insurance, news agency, transport services and temporary movement of professionals. Commitments have been obtained on cross border provision and commercial establishment. These commitments by Saudi Arabia will guarantee the European service providers improved market access and more predictable conditions for conducting business.
The bilateral deal has also solved the issue of double-pricing of energy. Saudi Arabia has now abolished the double-pricing of gas and has put an end to the exclusion of foreign companies from the national energy sector.
Saudi Arabia still has to conclude bilateral negotiations with a number of other partners. The negotiations will also continue at the multilateral level where a new Working Party should take place in October 2003, concentrating on the application of WTO rules in Saudi Arabia and the commitments that Saudi Arabia will undertake in all the fields covered by the WTO.
Saudi Arabia originally applied to join the General Agreement on Tariffs and Trade (GATT) in 1993. With the creation of the WTO the demand was converted into the application to join WTO in 1995. Since then there have been eight sessions of multilateral negotiations in Geneva and a far greater number of bilateral negotiations.
The multilateral negotiations take place within the WTO Working Party for the accession of Saudi Arabia which was established in July 1993. At the same time, Saudi Arabia is holding parallel bilateral talks with a number of WTO members. Since the EU is Saudi Arabia’s first trading partner, the conclusion of the EU-Saudi Arabia bilateral talks will be a significant step ahead in Saudi Arabia’s accession to the WTO.
Once the working party has completed its examination of the applicant’s trade regime, and the parallel bilateral market access negotiations are complete, the working party will finalize the terms of accession. — (menareport.com)
© 2003 Mena Report (www.menareport.com)