MGT 615 Strategic Management

Running head: SAUDI ARABIA’S INTERNATIONAL TRADE RELATIONS 1
Saudi Arabia’s international trade relations
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SAUDI ARABIA’S INTERNATIONAL TRADE RELATIONS 2
Saudi Arabia’s international trade relations
Introduction
International trade has become a significant aspect of numerous international affairs. As a
result of international trade, most nations are not only becoming interdependent to one another
but they are also trying to conduct efficient world trade. Saudi Arabia is one of the largest
countries in the Gulf region with an estimated population of 32 million. It also has the largest
economy in the Arab World with a GDP of 683.7 billion dollars (Al Rajhi et al., 2012). In line
with being the largest economy in the Arab world, it is also the only G-20-member country from
the region. The government of Saudi Arabian is in charge of major economic activities in the
region. The country has approximately 16 per cent of world petroleum reserves and further plays
a critical role in OPEC (Ball, Geringer, Minor and McNett, 2012). Saudi Arabia is also one of
the largest supplier, exporter, large-scale oil refiner as well as a producer of natural gas. This
paper seeks to discuss Saudi Arabia’s WTO accession documents and the commitments it made
in line with trade in services. The paper will further elaborate on international agreements and
treaties that deal with trade in services in which Saudi Arabia is a member. Besides, the impact
of the WTO on trade in services in Saudi Arabia will be discussed.
Arabia’s WTO accession document
Evidently, Saudi Arabia has established itself to be one of the biggest markets on the
planet and in addition in the Arab world for both manufactured as well as service goods. Saudi
Arabia got its formal accession in 2005 following the effective bilateral agreements with the
USA[ CITATION Abe08 \l 1033 ]. The procedure of Saudi Arabia accession and participation to the
World Trade Organization (WTO) has provided numerous benefits. The Saudi Arabia entry in
the WTO has increased trade volume, presents several negotiating as well as addresses cultural

SAUDI ARABIA’S INTERNATIONAL TRADE RELATIONS 3
and economic problems[ CITATION Gol07 \l 1033 ]. Saudi Arabia WTO accession has enabled the
country to remove protective barriers, open key service segments, for example, saving money,
and protection, legitimate and capital markets to remote cooperation, place ceilings on tariffs and
further protect intellectual property rights. The country has built an open, transparent and rule-
based regime to tackle the technical trade barriers. The WTO accession has also enabled the
country to call for tariff limitation in different sectoral initiatives, government procurement
agreements notwithstanding publishing service[ CITATION Moh11 \l 1033 ]. Saudi Arabia has also
changed rivalry laws to give against anti-protection with respect to WTO rules.
International Treaties or agreements in which Saudi Arabia is a member
Saudi Arabia is a party in several bilateral and multilateral trade agreements. To start
with, Saudi Arabia is one of the members of the Gulf Cooperation Council (GCC). The GCC
comprises of countries such as Bahrain, the UAE, Qatar and Kuwait (Mohanty et al., 2011).
GCC is a regional intergovernmental political and economic union (Reiche, 2010). The GCC
trade agreement fosters free entry of goods and services among member states. It also promotes
economic, social, security and cultural cooperation between the six states that convenes each
year to discuss regional affairs. Cumulatively, the GCC countries produce almost a half of the
world oil reserves[ CITATION AlR12 \l 1033 ].
On the other hand, Saudi Arabia is also a member of the Greater Arab Free-Trade Area
(GAFTA). GAFTA is a standout amongst the most basic financial accomplishments in Arab
regular work (Abedini and Péridy, 2008). It contributes towards framing the Arab regular
market. The GAFTA liberalizes goods and services through customs duties and charges
exception between all the Arabic member countries of the GAFTA (Zarrouk, 2000). The
exception is in the less developed countries[ CITATION Moh11 \l 1033 ]. The Arab countries have