GENEVA, (Reuters) – Saudi Arabia, the top global oil exporter, will become the 149th member of the World Trade Organisation (WTO) next month after the trade body”s executive on Friday rubber-stamped its entry.
Following 12 years of tough on-off negotiations, the WTO”s executive General Council endorsed a decision by its accession working party last month that the kingdom had met all conditions.
Approval in the council cleared the way for the country to attend a major WTO ministerial meeting in Hong Kong in December as a full member.
"Today we have taken a decision that allows Saudi Arabia to become the 149th member of the organisation…30 days after today they become a full member. It is a historic day," said Kenyan ambassador Amina Mohamed, who chairs the council.
Saudi Arabia”s entry will open its protected but growing economy to the outside world — a prospect that has worried some elements of the Saudi Islamic religious establishment.
Stock prices on the Saudi market, the Arab world”s largest, have soared to all-time highs on optimism about the economy since the WTO working party announced the successful conclusion of entry negotiations on Oct. 28.
"It is good for Saudi Arabia, it is good for the trading partners of Saudi Arabia and it”s good for the organisation," said WTO Director-General Pascal Lamy. "One more heavyweight around the table. It is good news," he added.
WTO entry should boost foreign investment, providing funds for diversification of the largely oil-based economy, and bring new export opportunities for Saudi firms, especially in the petrochemical industry.
"The accession will enhance the business environment in Saudi Arabia by adding more transparency and predictability," Saudi Commerce Minister Hashim A.Yamani told journalists.
"This we expect to lead to more investment and job creation," he said, adding that it would also enhance Saudi Arabia”s "already existing role as a stabilising factor in the world economy."
The talks went on for so long partly because of domestic fears that WTO free trading rules would limit Saudi Arabia”s right to restrict imports of goods prohibited under Islam, including pork, alcohol and pornography.
The United States and some others also took time to accept that Saudi Arabia was sufficiently economically open to join. Fears among small Saudi firms over the international competition that WTO accession will bring are echoed by petrochemical producers in Europe who worry that cheap oil and gas give Saudi firms an unbeatable advantage. Saudi Arabia first applied to join the GATT, predecessor to the WTO, in 1993. It stepped up the pace of negotiations in the last two years, partly to avoid being left out in the cold as Washington began talks on free trade agreements with neighbours such as Bahrain, Oman and the United Arab Emirates.
Before Washington would agree to its WTO entry, the kingdom promised not to enforce aspects of the Arab League boycott of Israel that apply to U.S. firms doing business with Israel.