The World Trade Organisation (WTO) general council formally concluded its negotiations with Riyadh on 11 November, paving the way for the kingdom to join the trade body as its 149th member on 11 December, three days before the WTO ministerial summit in Hong Kong.
The World Trade Organisation (WTO) general council formally concluded its negotiations with Riyadh on 11 November, paving the way for the kingdom to join the trade body as its 149th member on 11 December, three days before the WTO ministerial summit in Hong Kong. The decision, which comes more than 12 years after Riyadh first applied for membership, was widely welcomed by both the WTO and the government. 'Today's decision is a historic event for the WTO,' said WTO director-general Pascal Lamy on 11 November. Commerce Minister Hashim Yamani, who led the Saudi delegation in the trade talks, also welcomed the news: 'This is a high point in the programme of economic and structural reform that Saudi Arabia has undertaken. Accession will further integrate Saudi Arabia's economy into the world economy. It will also deepen the universality of the multilateral trading system.' Under the terms of accession, published at the conclusion of negotiations, Riyadh is committed to making a number of trade and economic concessions as a proviso of membership, leading to criticism by some - especially in the agricultural sector - who fear they will be unable to compete in an open market (see box). However, most local businesses have welcomed the move as it will grant them better access to export markets. 'Historically, there has never been an example of a country joining the WTO and becoming worse off for it,' says one Riyadh-based economist. Saudi Arabia is the last of the six members of the GCC to join the WTO. Kuwait, Bahrain, Qatar and the UAE all acceded in the mid-1990s, while Oman joined five years ago (MEED 16:9:05). WTO membership concessions The kingdom will eliminate any non-tariff measures that cannot be justified under WTO rules, but will retain the right to restrict the import of goods that could harm 'public morals' such as pornography, pork and alcohol; All export subsidies on agricultural products will be phased out; On the date of accession, Riyadh will adopt a series of international treaties on the protection of intellectual property rights and the application of technical regulations and standards, as well as the protection of food safety, human, animal and plant life, and health; At the end of a 10-year implementation period, average bound tariffs on imported goods will decrease to 12.4 and 10.5 per cent for agricultural and non-agricultural products respectively. The individual tariff rates for agricultural products will range from 5 per cent to 200 per cent, with the highest rates being applied to tobacco products and dates. Some 11 per cent of non-agricultural products will be imported duty-free whereas the highest tariff rate will affect wood, as well as iron and steel products; Foreign insurance companies will be permitted to open and operate direct branches in the kingdom. A commercial presence will also be permitted for insurersthat establish a locally incorporated co-operative insurance joint-stock company, in which foreign participation is limited to 60 per cent; On accession, the foreign equity shareholding for joint ventures in banking will be increased to 60 per cent, and foreign banks will be permitted in the form of a locally incorporated joint stock company or as a branch of an international bank. Financial services will only be able to be provided by commercial banks, although asset management and advisory services can also be provided by non-commercial banking financial institutions; Within three years of accession, up to 70 per cent foreign equity ownership in the telecommunications sector will be allowed. These commitments will apply to both basic telecommunication services and value-added telecoms services. Public telecommunications services will have to be provided by a joint stock company; The kingdom will have to e
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