Accession of Saudi Arabia to the WTO

On Sunday 1 September EU Trade Commissioner Pascal Lamy and the Saudi Minister of Commerce and Industry, Dr. Hashim A. Yamani will sign in Jeddah the agreement concluding the bilateral market access negotiations for the accession of Saudi Arabia to the WTO. 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. Commissioner Lamy noted: "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. 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." He further noted: "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."

The deal signed today 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% and similar commitments were undertaken for agricultural goods.

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 (Mode 4). 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, 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.


Background

Saudi Arabia originally applied to join 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 21 July 1993. The purpose of this 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 finalise the terms of accession. These appear in a report, a draft membership treaty ("protocol of accession") and lists ("schedules") of the member-to-be's commitments.

The EU is Saudi Arabia's main trading partner. Bilateral trade amounted to € 27 billion in 2002.


For more information:

http://europa.eu.int/comm/trade

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