RIYADH, 20 July — Ihsan Buhulaika, an economist and a Shoura Council member, has pointed out that the ongoing competition between Gulf seaports augurs well for Saudi seaports.

In a statement about the emerging scenario, he forecast increased shipping and related activities at Saudi ports.

Saudi Arabia’s decision to cut customs tariff from 12 to five percent last year had helped raise trade exchange between the Kingdom and Iran by 29 percent last August.

The growth in Saudi-Iran trade had negatively affected the revenues of Dubai, which is the main regional hub for re-exports, especially for communication and information technology equipments.

According to a report issued by the Export Promotion Center under the Council of Saudi Chambers the cut in Saudi customs tariffs would affect Dubai’s position as the port of re-export to the Kingdom. Fall in exports to Saudi Arabia would adversely affect a major project to develop Dubai’s Jebal Ali Port at a cost of $35 million.

The expanded facility, to be completed this year, is designed to receive the world’s largest container ships, which are beyond the capacity of other ports in the region to berth.

In the face of these developments, Saudi seaports have stepped up preparations to absorb a possible increase in imports, especially after the 60 percent cut in customs tariff.

Saudi Ports Authority is planning to open re-export zones in Jeddah and Dammam.

This move will help the Kingdom protect its position as one of the major conduits in the region and receive European exports to Iran.

Saudi and Iranian authorities are working closely to expand trade relations by removing obstacles facing businessmen.

The main impediment to Saudi-Iranian trade is the absence of guarantees for payments. There is also lack of coordination between businessmen of the two countries.

Among the major factors that affect bilateral trade exchanges are the non-availability of direct shipping lines and lack of information about the needs and products of either side.

Non-availability of hard currency in Iran is a major problem facing the Saudi exporter, coupled with the unstable exchange rate of the Iranian riyal.

The Export Promotion Center had conducted a study on the Iranian market with the support of the World Trade Center in Geneva.

The study did not give a clear picture, because the two countries, especially Saudi Arabia, had used Jebal Ali for export and import operations.

It was suggested that Saudi businessmen should appoint representatives in Iran to remove the difficulties in entering the market and promote trade ties.

The report also stressed the importance of exporting directly to the free trade zones in Iran by Saudi businessmen.