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Jeddah Commercial Forum Tackles Obstacles to Trade | ASHARQ AL-AWSAT English Archive 2005 -2017
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An oil tanker at the port in the northwestern city of Duba, Saudi Arabia. (REUTERS/Mohamed Al Hwaity)

An oil tanker at the port in the northwestern city of Duba, Saudi Arabia. (REUTERS/Mohamed Al Hwaity)

An oil tanker at the port in the northwestern city of Duba, Saudi Arabia. (REUTERS/Mohamed Al Hwaity)

Jeddah, Asharq Al-Awsat—The Third Jeddah Commercial Forum, held last week in one of Saudi Arabia’s most important industrial centers, highlighted both the many strengths of the Saudi economy and the need to identify and address obstacles facing trade in the Gulf nation.

Among these include the need to tackle subsidies, promote small and medium enterprise, improve port capacity to facilitate exports, and to tackle anti-dumping fees imposed on Saudi petrochemical exports by importer nations.

The deputy minister of petroleum and mineral resources and the forum’s keynote speaker, Prince Abdulaziz bin Salman bin Abdulaziz, emphasized that that Saudi Arabia “has considerable renewable energy resources, nuclear reactors and solar energy.”

Following the recent drop in global oil prices below USD 100 per barrel, Prince Abdulaziz stressed that his country has the production capacity needed to raise oil prices.

Abdulaziz Al-Twuwaijri, head of the Saudi Ports Authority, revealed a plan to develop the ports sector in Saudi Arabia over the next twenty years. He indicated that priorities in developing the nation’s ports are improving efficiency and expanding capacity, two key objectives for a major exporter like Saudi Arabia. The plan gives greater powers and further financial and administrative independence to the seaports.

Following reports that work had slowed at many major ports, incluing the Jeddah Islamic Port, following the government’s campaign against illegal foreign laborers, Mr. Twuwaijri denied that Saudi ports had been affected.

He added that his administration is working to increase private sector representation in the ports’ workforce and management, using the Red Sea Gateway, which employed workers from the private sector, and the King Abdulaziz Port Dammam project as examples of such efforts.

The Science Committee of the Third Jeddah Commercial Forum issued a number of recommendations, the most noteworthy of which was the recommendation to establish clear mechanisms and incentives for citizens seeking funding to set up small-scale businesses of their own.

The recommended initiative would also simplify procedures for foreign capital investment in sectors where it is common practice for foreign companies to register under the name of a Saudi national to avoid increased regulation. This initiative seeks to increase transparency for investors by allowing them to better monitor companies’ operations.

The Science Committee’s recommendations also called for the participation of the private sector in drafting policies and nationalization programs, in collaboration with government bodies responsible for implementing the government’s Saudization policy, specifically in the ministries of labor, civil services and education.

The Third Jeddah Commercial Forum concluded with a special meeting of the task force working to lift anti-dumping measures taken by some countries that import its petrochemical products, including Egypt, India, Turkey, and certain European countries.

Importing countries often try to offset the effects of dumping, in which an exported good is sold in the importing country at a cost far below market value or in quantities far larger than local demand requires, by subsidizing local products or imposing tariffs on imported products. Such measures are disallowed under World Trade Organization (WTO) agreements, and Saudi Arabia has been working with that body to combat anti-dumping measures taken against its exports since its accession in 2005.

Prince Abdulaziz bin Salman bin Abdulaziz discussed the task force’s plans, which include mechanisms for tackling anti-dumping measures taken by other countries:

“A task force has been formed to address the increasing number of court cases related to the dumping practices of Saudi petrochemical exporters, which represent a threat to Saudi Arabia’s commercial interests. These cases are connected to issues that were agreed upon during the talks to join the World Trade Organization.

“The task force has been formed so as to consolidate Saudi efforts to address these cases. The task force will be headed by the minister of petroleum and mineral resources, and will include the ministries of foreign affairs, finance, and commerce and industry. This task force will comprise representatives from every ministry, government institution and government agency, totaling 29 different agencies that deal with subsidy issues. In addition, representatives of Saudi exporters will also be included, as will specialized consulting firms.

“A plan of action has been tailored for each individual court case that reviews each case’s standing vis-à-vis WTO agreements and local laws. In addition to technical and legal issues, the task force’s plans also include mechanisms for political communication with involved countries, so as to help better explain [Saudi Arabia’s] position.

“The task force’s action plan … includes conducting a thorough study so as to assess Saudi Arabia’s legal standing and to identify weaknesses in the complaints lodged against it to the investigative body…. This plan also recommends requesting legal hearings with the investigative body and presenting written legal defenses complete with legal interpretations of the provisions agreed upon by the government when it joined the WTO.”

Prince Abdulaziz stated that part of the current efforts involve maintaining effective communication between Saudi Arabia and its embassies abroad, so as to allow them to keep abreast of any new developments associated with the task force’s mission. This will include preparing a legal study of existing procedures and acting as a third party in trade disputes between members of the WTO.

In addition to participating in the rules and procedures committee of the WTO, the task force is also committed to supporting Saudi petrochemical manufacturers by defending them in cases related to dumping and assisting them with relevant legal issues, including facilitating compliance with local and international regulations.