Saudi Arabia Accession to WTO

This paper discusses Saudi Arabia's accession to the World Trade Organization (WTO) and its impact on international trade in goods and services. It covers the commitments made by Saudi Arabia and the international trade treaties/agreements it is a party to. The paper also discusses the documents Saudi Arabia submitted to the Working Committee on accession and the impact of WTO in Saudi Arabia.

Running head: Saudi Arabia Accession to WTO
Business Law
Saudi Arabia Accession to WTO
Name of Student
Institution
Instructor
Date

Saudi Arabia Accession to WTO 2
Introduction
Accession is a term used to describe the process by which a state which did not
participate in the treaty making process or its ratification becomes a party to the said treaty at a
later date. It the process by which the acceding state party shows its agreement to be bound by
the terms of an international or regional treaty or convention (Borchert, Gootiiz & Mattoo, 2012,
p. 18). Saudi Arabia became a member of the World Trade Organization (WTO) in 2005 through
accession. Accession to the WTO has enabled Saudi Arabia to trade effectively in goods and
services with other international states. In this paper, I’ll concentrate on Australia’s international
trade in services and accession to the WTO.
Saudi Arabia’s WTO accession documents
These are documents that a state party wishing to be bound by the terms of a treaty
submits to the Organization. They are the documents that the Working Committee on accession
considers before they decide whether to recommend a state for accession or to reject the
accession request altogether (Al Rajhi et al, 2012, p. 47). The Working Party is charged with
examining the application to accede and then to submit recommendations to the council which
includes but not limited to a proposed/draft.
In this case of Saudi Arabia, the Documents that Saudi Arabia submitted to the Working
Committee included:
1. Memorandum on the Foreign Trade Regime of Saudi Arabia. This outlines how Saudi
Arabia conducts its international trade, the states that it trades with including the trade
agreements with such states (Ball et al, 2012, p. 49). State parties to the WTO also
submitted their questions on Saudi Arabia’s request to join WTO; questions which Saudi
Arabia replied to and submitted the said replies to the Working Committee on Accession.

Saudi Arabia Accession to WTO 3
2. Economic Development Plans. These are plans made by Saudi Arabia on their
development agenda. The plans enable the Working Committee to interrogate such plans
and make recommendations whether those plans are compatible with WTO agenda and
policies. In the case of Saudi Arabia, they submitted their sixth and seventh development
plans.
3. Economic policies such as policies on competition, pricing, privatization, investment
regime e.t.c. these policies help the Working Committee in making decisions as to the
suitability or lack of it in Saudi Arabia being recommended to accede to WTO. The
framework applied in enforcing the policies should also be submitted to the Working
Committee.
4. Policies that affects trade in services- these included Council of Ministers Decision,
Labor and Workmen Law as well as Cooperative Insurance Companies Control Law.
These as well assist the Working Committee on accession to make an informed decision.
Commitments on trade in services
During the application and submissions to the Working Committee on accession, Saudi
Arabia made the following commitment in regards to trade in services.
1. Any foreign services providers will be required to apply and seek approval from the
General Investment Authority before they are allowed to establish any commercial
service provision in Saudi Arabia. These business enterprises will be subjected to income
tax.
2. Saudi Arabia committed to make any subsidy in the country available to foreign entities
providing services except those subsidies reserved for Saudi Arabia nationals.

Saudi Arabia Accession to WTO 4
3. Saudi Arabia committed to allow entry as well as temporary stay of individuals such as
Business Visitors, Intra-corporate transferees on Information Technology, contractual
service providers, Independent professionals, installers, maintainers e.t.c. will be allowed
temporary stay for a period of up to 90 days which is subject to renewal for an equal
amount of time upon application and reasonable cause being shown. This would allow
service providers to promote and provide their services in Saudi Arabia without any form
of restriction (Aust, 2013, p. 32).
4. Insurance service providers with agents in Saudi Arabia are allowed to operate, to open
new business operations as well as offer new products for up to a period of 3 years.
International Trade treaties/Agreements in which Saudi Arabia is a party
Saudi Arabia is a party to the following international treaties on trade in services. The treaties
include:
a) General Agreement on Trade in Services (GATs)
This is a WTO treaty which came into force in 1995 after Uruguay negotiations. All the
state parties who have ratified WTO or acceded to it are members of GATs. The treaty however
provides that a state that accedes to WTO is free to incorporate an exemption to the rule stating
that all WTO members should be members of GATs. GATs treaty covers the sectors such as
Business, Engineering and Construction, Communication, Education, Distribution, Financial,
Environment, Tourism, Health, Recreation, Transport as well as Sporting. Saudi Arabia acceded
to the Treaty in 2005 when it became a member of WTO through accession.
GATs therefore make it possible for natural persons to move to other countries though
temporarily with the aim of providing services with little regulation applicable. It is aimed at
removing any restrictions on the provision and access to important services.

Saudi Arabia Accession to WTO 5
(b). Gulf Cooperation Council
The Gulf Co-operation Council and the European Free Trade Area FTA (GCC-EFTA
FTA is an agreement that applies to goods as well as services. It has been in force from the June
of 2009. It has been signed by GCC countries including Saudi Arabia, Qatar, and Kuwait among
others as well as EFTA countries including Switzerland.
The agreement is meant to achieve liberalization of their markets so as to conform with
GATs as well to promote competition in the member states for goods and services. The
agreement has certain export benefits to members which include:
i. No introduction of new custom duties to trade between party states except the customs
that are in the agreement;
ii. State parties are not allowed to introduce custom duty on any import that originates from
another state party; and
iii. State parties have undertaken to make available effective, adequate and protection of
intellectual property and their enforcement and in complies with the TRIPS Agreement.
This agreement is important to the member states as it removes restrictions on the
movement and provision of goods and services respectively. This promotes trade, development
and cohesion among and between the member states.
The impact of WTO in Saudi Arabia
Accession to WTO has opened up the economy of Saudi Arabia in the promotion and
protection of copyright, the promotion of rule of law and foreign investment
The accession to WTO has also promoted competition among local companies as well as
the creation of a global economy which has as a consequence increased the access to a variety of
goods and services.

Saudi Arabia Accession to WTO 6
Additionally, it has opened up Saudi Arabia to international trade in terms of exports to
WTO member states thereby protecting the Kingdom of Saudi Arabia from restrictive and
discriminatory policies as well as creation of dispute resolution procedures between states to
avoid disputes.
In my well considered opinion, accession to the WTO by Saudi Arabia has opened up
most industries and has gradually revolutionized international trade. The future of international
trade in goods and services in Saudi Arabia will grow substantially impacting greatly in fields
such as Information and Technology and free trade; unrestricted exchange, transfer and provision
of service. International trade will open other markets and as a result lead to industrialization and
general development as well as improving the living conditions of citizens of the Kingdom of
Saudi Arabia.
Conclusion
As discussed above, accession to WTO has opened up Saudi Arabia to the international
world leading to interaction through trade. The trade agreements and policies have revitalized the
economy due to the exchange of a myriad of goods and services as well as improving peaceful
coexistence among neighbors.

Saudi Arabia Accession to WTO 7
References
Al Rajhi, A., Al Salamah, A., Malik, M., & Wilson, R. (2012) Economic Development in Saudi
Arabia Routledge
Aust, A. (2013). Modern treaty law and practice Cambridge University Press
Borchert, I., Gootiiz, B., & Mattoo, A. (2012) Policy barriers to international trade in services:
evidence from a new database. The World Bank
https://www.wto.org/english/thewto_e/countries_e/saudi_arabia_e.htm accessed on 18 November, 2018
https://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm accessed on 18 November, 2018
https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm accessed on 18 November, 2018
http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=SA& accessed on 18
November, 2018
http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Country=US accessed on 18 November,
2018
https://www.wto.org/english/news_e/news18_e/ds565rfc_27aug18_e.htm accessed on 18 November,
2018
https://mci.gov.sa/Agencies/ForeignTrade/doc-agreements/Pages/default.aspx accessed on 18 November,
2018