RIYADH: US-Saudi trade relations have remained solid, albeit with imports from the US progressively declining over the years as a percentage of total imports. But Saudi Arabia remains one of the US’s top 15 trading partners.
Total bilateral trade in 2007 is estimated to have reached SR192.7 billion ($51.3 billion), while total US exports to Saudi Arabia were estimated at SR51.4 billion ($13.7 billion), up from a lower base of SR19.7 billion ($5.2 billion) back in 2002.
The increase is significant (161 percent), yet compared to some other trading partners the US is losing total market share. Back in 2000, US exports to the Kingdom were 19.7 percent of total imports and by 2007 were down to 13.5 percent. China’s total market share in 2000 was 4.1 percent, which more than doubled to 9.6 percent by 2007. Others, such as Germany, have been able to maintain their market share in Saudi Arabia (8.3 percent 2000 against 8.8 percent in 2007), in contrast to Japan which has seen its share decline (10.7 percent in 2000 against 8.7 percent in 2007). This trend is due to the significant changes taking place globally and to the export role of China (competitive pricing, quality and variety improvements), as well as to the shifting import priorities of the Kingdom and changing nature of the US exports in terms of products and services. The dollar peg has not acted as a boost to the trade relationship, contrary to public perceptions.
The recent turmoil in the US auto manufacturing sector is changing consumers’ perceptions about US products, but that is an unavoidable consequence of the crisis.
(To be concluded)
(John Sfakianakis is chief economist at SABB, Riyadh)