The European Union and Saudi Arabia signed a bilateral trade pact earlier this week which will clear the way for the opening of the Saudi market for many types of goods and services, and represents the last major hurdle on the kingdom's bid to join the WTO by 2004.
"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," notes the EU's chief trade negotiator, Pascal Lamy.
The deal 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 made for agricultural goods.
In services, Saudi Arabia is offering commitments in a large number of sectors such as telecommunications, couriers, 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 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.
The EU is Saudi's largest trading partner with bilateral trade valued at 27 billion euros in 2002.
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