RIYADH, 14 September 2005 — Before its entry into the World Trade Organization (WTO), Saudi Arabia must still finalize discussions on the pricing of natural gas for petrochemical companies, according to ambassador Bernard Savage, chief of the delegation of the European Commission in Saudi Arabia.
In an exclusive interview, Savage said the European Union had signed an agreement with Saudi Arabia in August 2003 for the Kingdom’s accession. He explained, “There remains an outstanding issue which is the question of the pricing of natural gas supplies to petrochemical companies. There have been extensive discussions on both sides. As far as the commission is concerned, we are pushing ahead on those and we are hoping that we can continue discussions with Saudi Arabia in order to reach an agreement in time to allow for Saudi Arabia’s accession at the Hong Kong ministerial meeting of the WTO toward the end of the year.”
Part of the delegation’s job is to facilitate discussions, Savage said, adding that EU Trade Commissioner Peter Mandelson of the European Union had been personally involved in the latest negotiations between the EU and Saudi Arabia.
“When Commissioner Mandelson was here last April he said both publicly and privately that ‘the European Union is committed to Saudi Arabia’s WTO membership’, and we have that as an objective by the end of this year,” he said.
Commenting on the benefits of Saudi Arabia’s accession to the WTO, ambassador Savage said that it would not immediately benefit the economy but would, on the contrary, benefit the country in the long run. He went on to say, “The Saudi economy is very healthy and that is almost an understatement. I don’t think Saudi Arabia’s accession is critical for many of the investment decisions that have been made or are being made regardless of the accession.”
Savage did mention, however, that the country’s accession to WTO would mean two things:
First, clarification of economic modernization. “That will provide Saudi Arabia with a framework to modernize legislation and to move ahead which will subsequently give confidence to investors and allow Saudi Arabia to develop sectors which perhaps it had not been able to do before because the framework was not there.”
Second, by being a member of the WTO, Saudi Arabia will participate in making the rules for international trade. “It gives Saudi Arabia a voice and an influence in making rules,” he said.
Savage dismissed reports of the European Union’s signing separate bilateral trade deals with Gulf Cooperation Council (GCC) countries. “Both for reasons of principle but also for reasons of practicality, we have no intention of signing separate bilateral deals with GCC member states,” he said.
He said that GCC integration was a major part in the future of the region’s security, and economic and social development. “We are very keen to see the GCC agenda being put in place, whether it is the creation of a single market or a single currency, the deepening of the customs union, the deepening of economic integration; we believe that is one of the best guarantees of the future development of this region, so we have no intention of doing anything that would undermine the GCC.”
Savage said the EU hoped to sign an economic agreement with the GCC before the end of this year. “There will be technical discussions before the end of this month and a full negotiations session in October,” he said.
