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. Last Updated: 07/27/2016

Saudi Arabia Set to Join WTO in 2004

JEDDAH, Saudi Arabia -- Oil-rich Saudi Arabia expects to complete long-running negotiations with the World Trade Organization this year, with entry in early 2004, the country's trade minister said Sunday.

"We would like to finish the major steps already by the end of 2003. Very early next year, we should be in. That is our target," Minister Hashem Yamani said in an interview after signing a bilateral trade agreement with European Trade Commissioner Pascal Lamy.

The bilateral deal with the European Union, finalized Friday, is one of the key steps Saudi Arabia has to take on its path to the WTO, as the 15-nation bloc is the kingdom's main trading partner.

"It's very important, because this is the last hurdle before they go into bilateral negotiations with the Americans, which is the last stage," said Hussein Shobokshi, president of Shobokshi Development and Trading in Jeddah.

To enter the WTO, a country has to negotiate bilateral deals with current members of the trade body, as well as adopt the WTO's body of legislation.

"After Cancun we hope to sit down with [the United States] and finalize a bilateral deal," Yamani said, referring to the Sept. 10-14 WTO ministerial meeting in the Mexican resort to propel the Doha round of trade negotiations.

Shbokshi said he expects official WTO entry by the end of 2003, though economist Ihsan Bu-Hulaiga said the U.S. trade talks could still cause delays.

"This is a major step, there's no doubt, but no one knows when Saudi Arabia will finally be accepted," he said.

Saad Rayes, a leading Saudi businessman, agreed that the way ahead could be difficult.

"It's the first concrete step so far. I never felt at any time in the last seven years that it was close. But ... dealing with the Americans will not be a piece of cake. It will not take a few months, it will take a year or more," Rayes said.

The Saudis first applied to join the WTO's predecessor, the GATT, in 1993, and the WTO committee overseeing Saudi Arabia's entry has not met for almost three years, but Yamani said talks could be held in October.

He also said the Saudi government is determined to push on with reforms of the domestic economy and help the country diversify from its oil dependence.

"Accession [to the WTO] is a way to really get more investors from outside so that our economy can get better."

The country is working on the privatization of 20 public enterprises and has created a training scheme to help curb joblessness among young people, he said, adding that the government wants to improve the legislative framework and boost investor confidence in Saudi Arabia.

Under the EU deal, the government has won tariff protection for 165 agriculture, dairy and poultry items.

"These industries are weak at the moment. They fear dumping and cutting prices from the Europeans," said Shobokshi, who expects the terms of the EU deal to have immediate effect.

Saudi Arabia had decided, by sealing this deal, to "liberate and deregulate its service industries, banking, brokerage and insurance," Shobokshi said.