WTO to ratify Saudi Arabia membership

11-Nov-05

World Trade Organisation is expected to ratify Saudi Arabia ‘s accession as its 149th member, 12 years after the kingdom first applied to join the global free trade body. This was possible after Saudi and EU negotiators resolved lingering technical disputes over insurance regulations and gas pricing last month. Although a bilateral trade accord had been signed in 2003, European officials claimed that Saudi Arabia’s policy of fixing gas feedstock prices for domestic petrochemicals companies was equivalent to an anti-competitive subsidy. The EU yielded after receiving assurances that future pricing policies would adhere to WTO regulations. As preparations for WTO entry, the government has proceeded with the introduction of 42 new laws and regulations designed to reduce tariffs and trade barriers, equalise treatment of local and foreign companies and harmonise Saudi trade policy with WTO principles. Although some domestic companies will probably suffer from new competitors entering the market, energy-intensive industries on which the kingdom has concentrated for the past two to three years - such as petrochemicals, steel and cement - will find their access to European, US and Asian markets greatly improved.