JEDDAH, 13 February 2006 — The fears of many Saudis who see the Kingdom’s accession to the World Trade Organization (WTO) as a threat to the country’s conservative culture and developing economy, were calmed by the four key speakers in yesterday’s session, “Saudi Arabia Beyond the WTO”, at the 7th Jeddah Economic Forum. The speakers were of one mind that the Saudi socio-economic system is strong enough to withstand any backlash that would result from the Kingdom’s accession to the organization and the concurrent economic globalization process.
“The Saudis should look to the WTO as an advantage to strengthen their engagement in the multilateral trading system,” said Harsha Singh, the deputy director-general of WTO, who gave a fillip to developing nations on dispute issues. “There are fears among many that large economies in the organization are capable of hijacking the WTO’s dispute-settlement mechanism to their advantage, but this is not true,” said Singh. Developing countries can use the dispute-settlement mechanism to file cases against developed countries thus protecting their rights while seeking fairer trade.
The WTO has always been friendly to Arab countries, added Singh, and the current trade round is named after Doha, the capital city of Qatar, which reflects an emphasis of the Arab presence in the organization. The Saudi economy is the largest Arab economy by far and Singh believes that its presence in the organization will enhance the status of Arabs while also contributing to the accession of other Arab states.
Singh believes that Saudi Arabia accession to the WTO is important to the organization and it adds to its significance. “Saudi Arabia is the world’s major oil exporter, and it is the world’s 33rd largest merchandise exporter, and excluding it from the global multilateral trade system created a gap in the organization,” said Singh.
Taking Singh’s statement a bit further, Fawaz Al-Alamy, Saudi deputy minister of commerce and industry for technical affairs, said: “Saudi Arabia is fully ready for the WTO.” Al-Alamy, who was a key member of the Saudi’s negotiating team on the country’s WTO accession, said that the Saudi economy is ready for the globalization challenges because the Kingdom fully supports free trade principles.
He pointed out that tariff levels are very low compared to other countries in the region. Moreover, there are no technical trade barriers in the Kingdom since it does not implement quota restrictions. Saudi’s trade position is robust as “the percentage of the country’s trade to its gross domestic product (GDP) is at 70 percent,” said Al-Alamy.
“WTO is an advantage to the Saudi economy because most of the world economic activities in all aspects take place within the economies of member countries,” said Al-Alamy. According to WTO statistics, 90 percent of international trade along with 96 percent of international financial transactions occur within the economies of its member countries. “Foreign direct investments (FDI) are a key source for increasing the Kingdom’s GDP growth rate, and the WTO agreements will help to increase the flow of FDI into the Kingdom,” added Al-Alamy. Saudi Arabia aims at attracting $624 billion of FDI into the country in the coming years.
Commenting on the expected amount of FDI, Christopher Parlin, law professor at Georgetown University and the legal consultants on Saudi Arabia’s accession to the WTO, said: “This is a large sum for any country to attract.” Parlin, the third speaker at the session, believes that the accession of the Kingdom will make it more lucrative for investments especially in the petrochemical sector; however, he believes that Saudi lawyers are not capable of engaging in international trade issues and disputes.
Robert Lacey, a British historian and a specialist on Saudi Arabian issues, said that he did not foresee any risk to the Saudi cultural identity that following Kingdom’s accession to the WTO. Lacey said that the Saudi state is the driving force for the political stability in the Kingdom and this stability is what holding the Saudi society together. “The Saudi culture is not static as many would like to believe; it is dynamic and it will not be affected easily by the influx of expatriates into the Kingdom,” said Lacey who lived in Saudi Arabia during the 1970s.
Lacey justified his position by pointing to the Western experience with immigration and how Western culture survived the expected loss of identity. He said that Saudi traditional dresses for both men and women are not authentic as many might think since there is no existing Saudi who wears the exact dress of his ancestors. Dresses, nevertheless, were innovated in a way that preserved the people’s cultural identity and this can be applied to all other aspect of the culture.