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The joining of Saudi Arabia in WTO and its econmic impacts Essay Example

  • Category:
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    Research Paper
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    Undergraduate
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KSA and WTO

Introduction

On 11th December 2005, Saudi Arabia became the 149th Member of the World Trade Organization1. Saudi Arabia had applied for WTO membership in 1993 and thus its accession took 12 years. This was the second longest accession period after China which took 14 years.

While WTO membership is seen as an opportunity to increase trade, for heavily trade-oriented economies this advantage is hardly noticeable. By the time of its accession, Saudi Arabia was ranked 13th in world merchandise export and 14th in merchandise import2. Merchandise trade was accounting for SR 640.3 billion or 68 per cent of the Kingdoms GDP in 2005. Around the world trade contributes and average of 17 per cent of GDP making Saudi Arabia one of the most advanced trading economies.

The impacts of the WTO accession are unlikely to affect Saudi Arabia positive trade surplus. For over 10 years, Saudi Arabia had been running a trade surplus of 9 per cent. At the time of accession trade surplus was at $87 billion. Saudi Arabia has been able to keep its imports at a third of the value of its imports. Most of the Kingdoms exports are from the Petrochemical industry and include Crude oil, petrochemicals, and refined oils. However, the Saudi service industry runs a small deficit as most of Saudi services are sought from overseas companies. With a strong global oil market, the trade surplus will persist for several years despite the Kingdoms accession to full WTO membership. However, the Kingdom remains vulnerable to volatile oil prices making the need for trade diversification more urgent.

In 2004, Saudi main sources of imports were the US, China, Germany and the UK. Saudi main trading partner is the US which receives the bulk of Saudi Arabia’s imported crude oil3. Other importers of Saudi merchandise are India, South Korea, Japan and China. Like most nations across the world, Saudi Arabia has improved trade ties with China. Now, Saudi Arabia receives more imports from China than ever before in its history. By 2004, China had become the 5th largest importer of Saudi Arabian Merchandise4. With China accession to the WTO, trade between the two Asian economic powers is expected to increase significantly.

Before committing to the WTO, Saudi Arabia had already started reducing trade tariffs. With entry to the WTO, Saudi Tariff ceilings are expected to come down further. Membership of the Gulf Co-operation council (GCC) means that 85 per cent of the 7.177 items classified in Saudi Arabia for customs policies were charged a tariff of less that 5 per cent5. At the time of Applying for GATT membership, Saudi Arabia was charging a tariff of less that 12 per cent on 75 per cent of classified commodities6. The WTO commitment means the Kingdom agreed to lower tariffs across a range of commodities. However, most Saudi tariffs on imported items were below the commitment made to the WTO.

For a country to be accepted into the WTO, it has to be undertaking trade reforms as negotiations proceed. Each of the WTO existing members had to agree that Saudi Arabia’s trade regime is in compliance with the WTO. As part of the compliance, Saudi Arabia enacted 42 trade-related legislations and created nine regulatory bodies to bring the Saudi economy to WTO standards7. However, Saudi maintained that its policies were as a result of commitment to trade liberalization and economic reforms. Saudi Arabia was engaged in 314 bilateral trade negotiation under the Umbrella of the WTO and by September 2005 had signed 38 bilateral trade agreements8. In September 2005, Saudi Arabia signed a bilateral trade agreement with the United States it largest import partner.

In this paper we first explore the relationship between Saudi Arabia and the WTO and the Trade commitment the Kingdom made to the WTO. These commitments may have an impact on the Saudi economy separately or as a group. In the next section we examine the impacts of the changes across a number of Saudi industries and trade commodities. Finally, we critically analyze the effects of the WTO commitment on the Saudi Economy now and in the future.

Saudi Arabia Relationship with the WTO

As the biggest market in the Middle East, Saudi Arabia’s entry into the WTO is very significant. It must also be taken into consideration that Saudi Arabia is the world largest exporter of Crude oil and is home to the largest petroleum and natural gas deposits in the world9. Becoming a member of the WTO thus gives Saudi Arabia unprecented access to the economies of WTO members for its exports; in exchange the Saudi market is now open for investment by companies from WTO members. According to Bronson, WTO member states can no longer discriminate against Saudi Arabian exports as the WTO has made enhancing of their trade interdependability a priority10. Furthermore, Saudi Arabia will be able to lodge complaints against practices that discriminate their exports for resolution by the WTO. WTO resolutions on trade issues are binding on members therefore making them an effective dispute resolution alternative. Furthermore, the WTO asks it members to abide by a number of anti-dumping measures that protect the Saudi economy from this retrogressive trade practice11. WTO members are also required to award Saudi Arabia exports the Most Favored Nation (MFN) status. As seen earlier, compliance with WTO trade regime standards assists in the faster privatization and leads to accelerated economic reforms making the Kingdom a favorable destination for international investors. Furthermore, WTO accession will bring about high efficiency in Saudi governments and private organizations as they position themselves they to compete with foreign entities.

However, the private sector in Saudi Arabia is wary of the changes coming about as a result of the WTO accession. According to Ramady and Mansour, most Saudi Arabia businesses are not mature enough to compete with the financial muscle of major multinational organizations12. Most local businesses have suffered as a result of market liberalization as required by the WTO. Since developed nations have companies with the ability to invest and support operations in foreign countries they are more likely to benefit from trade liberalization. On the other hand, few Saudi Arabia companies have the ability to go global thus limiting the benefit they gain from access to foreign markets. In the views of Bronson, this will likely widen the wealth gap between the world’s most advanced countries and other WTO members13. Saudi industries are concerned that Western corporation were given a chance to develop and mature under a protected trade regime while Saudi companies at the same stage of development are being denied equal protection.

One of the greatest worries of most members of the WTO is the requirement to treat trade from member nations equally. While in theory this opens up trade opportunities for WTO members like Saudi Arabia this also has its drawbacks. First, a nation is denied the chance to negotiate trade terms that are favorable to its cultural and economic conditions14. The collapse of several economies under debt-pressure is sometimes credited to the opening of struggling economies to the competitive pressures of liberalized markets. For example, Saudi Arabia has to remove protectionist barriers across a number of major industries. Involvement of foreigners in the energy, banking and telecommunication industries may see them take over these key industries. Furthermore, Saudi Arabia has to comply with the International property rights regime which has been accused of being discriminatory against developing countries.

To join the WTO, the Saudi Government was required to make commitment around a number of key areas. Ramady and Mansour list the changes required of Saudi as follows15:

  • Commitment to a reduction of import tariff except for goods given special consideration

  • Established a maximum tariff ceiling for imported commodities, and elimination of subsidies offered for agricultural produce and other products of the private sectors

  • Allowing foreigners to own real estate

  • Allow majority holding by foreigners in investment projects.

  • Equal application of taxing rules to foreign and local companies.

  • Free and unfettered access by member country traders to the Saudi market.

  • Opening up the capital markets, insurance, banking and legal services industries to foreign investors.

  • Removal of all discriminatory measures against goods and services imported by WTO members.

  • Respect and observation of intellectual property rights.

  • Reform of intellectual property rights and trademark laws.

  • Removal of technical trade barriers such as Visa requirements for travel.

  • Acceptance of the Information Technology agreement and setting zero tariffs on trade in Information Technology items.

  • Acceptance and application of the basic telecommunication agreement thus opening up the telecommunication industry for competition.

  • Reform of consumer and anti-trust law to offer greater protection to consumers.

The 38 bilateral trade agreements signed between Saudi Arabia and some of its trading partners were an important part of Saudi Accession to full WTO membership. Now Saudi has bilateral trade agreement with the United States, Canada, Japan and Australia in place16. Multilateral trade agreements that fall under the WTO umbrella include the Gulf Cooperation Council (GCC), the Arab League Customs Union and the Saudi-EU Joint Trade agreement. Each of these agreements is marked by a significant decrease on the tariffs of imported items. The Saudi government has now reformed its tariff rates and customs union to align them with the WTO standards. All tariffs and customs policy are now based on the requirement set forth by the WTO. Saudi Arabia now subscribes to the WTO’s bound tariff regimes. The bound tariff regime establishes a tariff ceiling or a maximum tariff rate that a country can charge on goods imported from WTO member countries. However, bound tariffs are not necessarily the tariffs Saudi Arabia is applying on imported items. In most cases, the bound tariff is higher than existing tariffs on items. The Saudi Arabian government is free to charge lower tariff rates than the bound tariff, but increases above the ceiling means renegotiation with the WTO. Notably, the lowest tariff rate applicable to a member of the WTO for a particular imported item becomes the applicable tariff for all WTO members17.

As a result of various trade negotiations the Saudi Arabian import tariffs have reduced significantly since 1993. In 2003, the GCC tariff implementation saw tariffs on 85 per cent of Saudi imports reduce to between 0 per cent and 5 per cent18. 7 per cent of Saudi classified imports now carry an import tariff of 12 per cent, while only 6 per cent carry an import tariff of 20 per cent. However, import tariffs on cigarettes and other tobacco products remain at 100 percent19. Saudi Arabia convinced the WTO to allow the ban on import of alcohol and pork to remain in place. Saudi Arabia and the GCC agreed in 2005 to abolish tariffs on chemicals and Pharmaceutical products20.

The WTO requires, Saudi Arabia to gradually lower the custom duty ceilings for 870 agricultural and industrial commodities for a period of five years after accession21. These items form about 12 per cent of items on the Saudi HS tariff schedule. Upon accession, Saudi Arabia was required to reduce customs duties on 430 imports on its HS tariff schedule. Saudi Arabia was supposed to make annual decrements on tariff ceilings so by 2010, Saudi Arabia should have effectively lowered tariff rate ceiling on 870 imported commodities.

The reduction on tariff ceiling may see industries engaged in the trade of formerly tariff protected commodities suffer. However, most economists have gauged the impact of the removal of tariff protection to be low. Saudi Arabia removed 396 items from the 20 per cent tariff protection level to 15 per cent as a condition for accession to full WTO membership22. 197 items among the 492 that enjoyed a 12 per cent tariff protection are now subject to duties of between 6.5 per cent and 10 per cent23. However, Saudi Arabia was able to retain protective tariffs over milk and dairy products, poultry and other agricultural products.

By 2005, Saudi Arabia had accepted a range of tariff reduction as a pre-condition for entering the WTO. Chocolates and Confectionery formerly subject to a tariff rate of 20 per cent were now charged 8 per cent24. Secondly, engine lubricants duties were lowered to 8 per cent down from 10 per cent charged earlier. Thirdly, plastic, metal and paper products were now subject to a lower tariff than the previous 15 per cent. All computers, landlines and mobile phones have now been zero-rated as result of the Saudi Arabia’s accession to WTO membership25. However, the WTO allowed Saudi Arabia to maintain tariffs for soaps, perfumes, paints, soaps and some plastic products at their former levels. However, tariffs for these products were later to be lowered to 6.5 per cent, up from between 12 and 20 per cent levels26. All these changes on tariffs were expected to take effect within 5 years of Saudi Arabia’s accession to the WTO.

The above tariffs must be distinguished from the current tariffs applicable to imported products in Saudi Arabia27. These tariffs refer to the maximum tariffs; the Saudi Government can charge on imported items and in most cases are significantly higher than the current tariffs the Saudi Government. For this reason, the effects of the tariff reduction as required by the WTO may not be as profound as in the case were Saudi Arabia applicable tariffs had been much higher.

Hydrocarbons

As the main export commodity for the Saudi Arabian economy, treatment of Crude oil in the WTO agreement is of great concern to Saudi Arabians. Since crude oil is excluded from the commodity under protection by the WTO it was thought that they offer no advantage to the Saudi economy28. However, oil and oil exports are subject to WTO agreements on market access. Some members of GATT however do not include oil and oil products on their original product schedule. Saudi Arabia has to negotiate with these nations directly to replace these exceptions with tariff ceilings. However, the WTO is mostly unconcerned about crude oil exports as very low or no tariffs at all are charged to oil exports around the world.

However, Saudi Arabia’s oil exporters were the main beneficiary of Saudi Arabia’s accession to the WTO. The giant SABIC and other local petrochemical companies benefit from increased market access for their crude oil29. First, Saudi Arabia did not commit to change the pricing of petroleum feedstock as used locally. Secondly, the WTO’s Chemical Tariff Harmonization Agreement leads to significantly lower tariffs for the Chemicals processed and exported by SABIC affiliates. Saudi Arabia petrochemical have a significant cost advantage over competitors and now have greater market access with reduced global export tariffs. Furthermore, Saudi Arabia is now able to use the WTO to complain against any trade policies that may discriminate export of its petrochemicals to WTO members.

Intellectual Property Rights

The accession to the WTO has changed the way intellectual property rights are treated in Saudi Arabia. Pressure from trade partners has seen Saudi Arabia reform its legal protection for IP and toughen perceived lax enforcement of intellectual property rights30. Now, Saudi Arabia IP regime is compliant with the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)31. Saudi Arabia had already committed to comply with TRIPs before accession to the WTO. Under the TRIPs agreement, Saudi Arabia agreed to protect IP rights across three general areas:

  • .32Copyrights are exclusive rights granted to owners of literary work, sound recording, paintings, photographs, musical works, software, television broadcast and other creative and artistic works for a limited amount of time. Saudi Arabia committed to increasing copyright protection in its jurisdiction

  • On the other hand, patent are rights that accrue to an inventor to make exclusive use of an invention for a limited time

  • Trademarks are the third kind of Intellectual property protected under TRIPs. Trademarks are logos or distinctive signs that businesses use to uniquely identify themselves and distinguish their products from those of competitors.

Protection of intellectual property rights allows creators of knowledge to benefit and fund research for their work33. Granting intellectual property rights is one of the motivating factors for research and development by both individuals and corporations. Removing or allowing these rights to be violated will reduce innovation and creativity. Therefore, greater protection of intellectual property rights in Saudi Arabia enhances the production of innovative and creative works in the country.

Saudi Arabia has been accused of lax copyright protection before its accession to official WTO membership34. For a number of years, Saudi Arabia has been accused of abetting audio-visual and software piracy. However, action on the part of the government to contain the vice of piracy is seeing a gradual reduction in audio-visual piracy. However, computer software piracy remains high throughout Saudi Arabia35.

As part of the effort to comply with WTO standards for Intellectual Property rights, Saudi Arabia passed new Copyright laws in August 2003. These laws indicate significant reform in the Saudi intellectual property rights regime. Under the new laws audio recording, lecturers, print publication, computer programs and works of art, visual, audio, photographic and anonymous work get protection for 25 years after the first date of publication36. Author’s creative work is protected for a lifetime and another additional 50 years after the author dies. The new IP laws have the main features37:

  • Computer software and databases are explicitly protected.

  • Audio visual works and sound records will be protected for 50 years following their first publication or public display.

  • No copying and translation of author’s work without their approval.

  • All artistic and literary works protection period were adjusted to the Berne Convention 1971 requirements.

Saudi Arabia has been a member of the Berne Convention on Copyright protection since 1993 but copyright protection was still below acceptable standards38. In 2004 prior to the accession to the WTO Saudi Arabia joined the Berne convention for literary and artistic works. In the same year, Saudi Arabia also joined the Paris Convention for protection of Industrial property. As Part of the WTO trade negotiation, Saudi Arabia would offer individuals and firms from the World Intellectual Property Organization (WIPO) better patent protection39. Under, the new Copyright law, violations would be punished more harshly. Punishment includes six months or up to twelve months imprisonment for repeat offenders, fines totaling SR 250,000 and SR 500,000 for repeat offenders, and compensation for copyright violation under the TRIPs agreement40.

Effect of Reform in Intellectual property rights protection on Pharmaceuticals

Saudi Arabia can expect increased activity in the Pharmaceutical industry where more foreign investment could be attracted41. Foreign pharmaceutical are also expected to be more comfortable in entering licensing agreements with Saudi companies if their patents are recognized and protected in the country. This means Saudi Arabia will be able to access new and advanced therapy for dealing with diseases while reducing the country’s drug import bill. France’s Sanofi-Aventis started operating in Saudi Arabia in 201042. Currently, the pharmaceutical giant has announced plans to build a large scale manufacturing plant in Saudi Arabia.

Trade in Services

While commodity trade negotiation under the WTO are concerned with tariffs, smoother service trade is guaranteed by granting access to Foreign Service providers to local markets. The WTO required Saudi Arabia to offer a better investment environment and remove barriers that prevent the physical presence of foreign companies in Saudi markets43.

As part of the accession to full WTO membership, Saudi Arabia agreed to ease foreign access to 12 sectors, 155 sub-sectors and 4 methods of service deliveries44. These delivery methods include:

  • Cross border services that are provided from abroad as in the case of telecommunication

  • Services that are consumed abroad such like Saudi education in Australia.

  • Services that are delivered through physical presence by setting shop in Saudi Arabia.

  • Physical movement of natural persons in and out of Saudi Arabia; under this mode of delivery foreign professionals can move in and out of Saudi Arabia, companies can recruit foreign professionals to offer services in Saudi Arabia and companies have the ability to transfer their foreign staff into Saudi Arabia.

Saudization, Market Access, Foreign Direct Investment and national treatment are among the complicated issues handled by the Schedule of Specific Commitments in Services45.

Services are also subject to the Most Favoured Nation (MFN) treatment under the WTO agreement46. The most favorable market access terms negotiated by one country apply to the access of markets by other service providers.

Insurance

WTO accession to the WTO has been marked by remarkable changes in the nation’s insurance industry. Before accession Saudi Arabia insurance industry was dominated by over 100 local players47. The industry was highly unregulated with most players operating through agents. The only registered commercial insurance company at the time was the government-owned National Company for Cooperative Insurance, NCCI. Under the royal decree that established the company, the company shareholders are also the company’s shareholders. Insurance companies can operate under the co-operative insurance concept as required by the Cooperative Insurance Companies Control Law passed in July, 200348. All foreign insurance companies operating in Saudi Arabia were required to comply with the cooperative insurance concept by 2008. However, a royal decree in 2005 allows foreign companies to establish a presence in Saudi Arabia as direct branches of foreign insurance companies49. After accession to the WTO foreign insurers could establish a presence in Saudi Arabia by fulfilling the following terms50:

  • Be a registered Saudi Arabian insurance company with 60 per cent foreign shareholding and a 30 per cent public shareholding.

  • The co-operative structure requires companies to distribute 10 per cent of their profits to the shareholders while the rest can be retained.

However, foreign insurance companies were given 3 years before the new insurance regime applies to them51. Meanwhile their operation in Saudi Arabia would not be disrupted. Furthermore, foreign insurance companies operating outside Saudi Arabia are allowed to offer reinsurance and property-casualty covers for foreign clients52.

Some WTO trade partners also asked for lowering of minimum capital requirements for insurance companies wishing to operate in Saudi Arabia53. For an insurance company to operate in Saudi Arabia it must raise SR 100 million as paid-up capital and SR 200 million for companies that wish to offer reinsurance services54. A 20 per cent statutory reserve requirement can also see an increase in effective capitalization needed to establish insurance operations in Saudi Arabia. Furthermore, insurance companies are required to deposit 10-15 per cent as statutory bank deposit55. Interestingly, the interest on these amounts goes to the regulator SAMA instead of the depositing company.

According to Zaid Ahmad, the following process is followed in establishing a joint-stock cooperative insurance company56. First, the company obtains from the Saudi regulatory body SAMA. Secondly, approval must be granted by the Saudi Arabian General Investment Authority (SAGIA). Thirdly, the company applies for commercial registration with the Ministry of Commerce and Industry with a minimum of 6 founders. The fourth steps entail approval through royal decree by the council of ministers. Once the royal decree is issued the company must bring forward the paid-up capital57. Finally, the new joint-stock insurance company is authorized by SAMA to conduct business in Saudi Arabia. Once trade authorization by the ministry is granted, the insurance company can offer 30 per cent of its shareholding on the Saudi Arabian Stock market. The Saudi Government led the way by offering 70 per cent shareholding of NCCI in a 2005 IPO58.

Evidence of the effects of the WTO changes in the insurance sector is visible in the Saudi insurance sector today. There are 35 listed insurance companies on the Saudi Arabian stock exchange59. Some of these companies have majority foreign shareholding which is a direct result of the WTO liberalization in market access. While in 2005, NCCI was the only listed public insurance company; the rapid rise to 35 insurance companies is remarkable.

The Saudi Arabian Monetary Agency (SAMA) one of the nine regulatory bodies required for accession to WTO membership has played a major role in creating a conducive environment for many local and foreign insurance companies to thrive. According to Zaid Ahmad, SAMA has enabled the creation of a level playing field for all foreign or local players60.

The success of the Saudi Arabian insurance industry can be owed to its commitment to the liberalization in service trade and the issuance of compulsory insurance directives. Other than CCI, the other companies that dominate the Saudi Arabian insurance market have majority foreign ownership. These include the Mediterranean & Gulf Insurance & Reinsurance where Bahrain holding company owns majority shares while and Bupa Arabia for Cooperative Insurance which includes a British Holding company as shareholders61. The insurance sector in Saudi Arabia is thus highly competitive meaning that Saudi Arabians get the best possible insurance covers. Recently, Bupa Arabia started offering free medical cover for orphans all over Saudi Arabia.

With liberalization of the Saudi Arabian insurance sector many foreign entrants were able to break into the Saudi Market. With a liberalized and well-regulated market, growth is expected to continue in the Saudi insurance industry. Companies that had been formerly offering insurance services from abroad have been able to offer their services inside Saudi Arabia. Saudi Arabia has benefited by getting higher levels of insurance coverage and a wider variety of insurance products. Thus, the Saudi Insurance sector can be said to be one of the main beneficiaries of Saudi Arabia’s accession to the WTO.

Franchising

Prior to WTO membership only Saudi Arabian could hold majority shareholding in Franchisee businesses. Foreigners were limited to 49 per cent shareholding in the distribution of their franchised locally or internationally produced products62. Since accession to the WTO this restrictive stance has changed significantly. On accession, Saudi Arabia allowed foreigners to own up to 51 per cent of the Franchisees. After a three years transition period, Foreigners were able to own up to 75 per cent of company’s equity63.

The reforms in franchising rules led to an increase in the number of franchised businesses in Saudi Arabia. Most foreigners find franchising an easy way of conducting business in Saudi Arabia. Supported by the bilateral trade agreement between Saudi Arabia and the US, American franchises dominate the Saudi Arabian market. These include popular American Franchises such as Pizza hut, McDonald, Hertz and Baskins. Currently, there are over 500 franchised businesses operating in Saudi Arabia64. Furthermore, Saudi Arabians are developing their own Franchise concepts and exporting them to other countries

Wholesale and Retail

Accession of Saudi Arabia to full WTO membership will have a significant effect on the Saudi Arabia retail market. Before accession, Saudi Arabia was very restrictive of foreign involvement in the wholesale and retail trade65. Only, French giant Carrefour had been able to make significant inroads into the Saudi Retail market. Before, foreigners could only hold minority-shareholding in Saudi retail firms.

However, Saudi Arabia committed to opening up its retail and wholesale market to foreign entities. Upon accession, foreigners could own upto 51 per cent of Saudi retail and whole sale businesses66. By 2008, foreigners were allowed to own 75 per cent of Saudi retail and wholesale operations. In response to this announcement, Carrefour announced it was increasing its presence in Saudi Arabia to 19 stores67. Despite opening up retail businesses to foreign owners other barriers to participation by foreign retailers were still in place. Foreign players are required to raise a certain amount as minimum paid-up income. To enter into a joint venture a foreign partner is required to raise SR 20 million as the minimum paid-up capital68. Furthermore, retail businesses are required to hire and train majority Saudi Employees, the government could also control the size of store a foreign player can operate69.

While these restrictions continued to affect Saudi retail trade, more changes have seen the retail and wholesale environment change.

In March 2007, retail and wholesale trade was removed from a list of sectors were foreign investment was not permitted70. The changes introduced in 2007 aimed at fulfilling Saudi Arabia’s commitment to the WTO and strengthening the economy. In responses several multinational retailers have shown interest in entering the Saudi Arabian market. South African retailer Woolworths opened a new clothing store in Saudi Arabia in 200271. UK retailer Tesco announced it would be opening 19 of its F&F clothing stores in Saudi Arabia72. However, the Saudi Arabian retail industry is still dominated by Panda owned by the local Saviola group and other Saudi Arabian retailers. The changes in the Saudi Arabia wholesale industry avail to Saudi Arabian a wider variety of products and choices. Carrefour one of the main players in the Saudi retail industry has been able to keep the prices of commodities low a factor that is important in Saudi Arabia whose consumers show a lower propensity to consume.

Conclusion

The economic impacts of Saudi Arabia accession to full WTO membership have been largely positive. Already used to a low tariff regime, most Saudi Arabian business were not exposed to reduced import tariff imposed by the WTO. Saudi Arabian businesses had already been operating under tariff regimes that were much lower than the proposed WTO ceiling tariffs. On the other hand, the oil and oil products sector was able to access more markets for Saudi Arabian products. Furthermore, Saudi oil exports could be protected from discrimination by members of the WTO. Accession to the WTO and changes in the service sector have also had profound impact on the Saudi Arabia service sector. The insurance sectors clearly show how WTO insistence on trade liberalization can affect service provision in a given industrial sector. Upon reform the Saudi Arabian insurance company has grown from just one registered company in 2005 to 35 last year. Saudi citizens now enjoy a wider range, coverage and depth of insurance services thank to more liberalized insurance market. Similarly, over 500 franchise businesses have opened shop in Saudi Arabia. Closely related to the increase in franchise businesses is the increasing presence of multinational retailers in the Saudi Market. Recently, Tesco and Woolworths joined Carrefour who had been operating retail chains in Saudi Arabia for over two decades. Overall, Saudi Arabia’s accession to the WTO has led to an increase in trade volumes and also avails better quality and cheaper services and commodities to the Saudi Arabian public.

Bibliography

Articles/Books/Reports

Al-Elg, Ali, and Monzurul Hoque, Charting changes in Saudi Arabian insurance industry, Working Paper (King Fahd University of Petroleum & Minerals, 2006)

Al-Moneef, Majid. The contribution of the oil sector to Arab economic development, (OPEC Fund for International Development, 2006).

Al-Rasheed, Madawi, A history of Saudi Arabia (Cambridge University Press, 2010)

Alwababa news website, ‘South African department store Woolworths ventures into Saudi market (2003) <http://www.albawaba.com/business/south-african-department-store-woolworths-ventures-saudi-market>

Bhala, Raj, ‘Saudi Arabia, the WTO, and American Trade Law and Policy (2004) The International Lawyer, 741, 812.

Binkert, Brigitte, ‘Why the current global intellectual property framework under TRIPS is not working, (2005) 10 Intell. Prop. L. Bull, 143

Bond, Eric, Stephen Ching, and Edwin Lai, ‘The role of MFN in WTO accession’ (2003) 1083 Hong Kong Institute of Economics and Business Strategy Working Paper

Bronson, Rachel. «Rethinking religion: The legacy of the US‐Saudi relationship, 28 (2005) Washington Quarterly 4: 119-13

Claire Ferris-Lay,’Tesco sets out its stall for Saudi debut in 19-store deal, Arabian Business (17th January 2002) < http://www.arabianbusiness.com/tesco-sets-out-its-stall-for-saudi-debut-in-19-store-deal-440980.html>

Evenett, Simon J., and Carlos A. Primo Braga. WTO accession: lessons from experience. (World Bank Group, 2005).

Gillian Rice, ‘Doing business in Saudi Arabia, ‘(2004) 46 Thunderbird International Business Review 1, 59-84.

Hawari, Walaa, ‘100m-euro investment & commitment make Sanofi a key player in Kingdom,’ Arab News, (26 February 2012) <http://www.arabnews.com/node/407379>

Madhi, Salah T., and Armando Barrientos, ‘Saudisation and employment in Saudi Arabia (2004) 8 Career Development International 3, 70-77.

Matthews, Duncan, Globalizing intellectual property rights: the TRIPS Agreement (Routledge, 2013)

Niblock, Tim. Saudi Arabia: Power, legitimacy and survival (Routledge, 2013).

Noland, Marcus, and Howard Pack, ‘Arab economies at a tipping point’ (2008) 1 Middle East Policy 15, 60-69.

Ramady, M. A., and Mourad Mansour, ‘The impact of Saudi Arabia&# 39; s WTO accession on selected economic sectors and domestic economic reforms,’ (2006) 2 World Review of Entrepreneurship, Management and Sustainable Development 3: 189, 199.

Ramady, M. A., and Mourad Mansour, ‘The impact of Saudi Arabia&# 39; s WTO accession on selected economic sectors and domestic economic reforms,’ (2006) 2 World Review of Entrepreneurship, Management and Sustainable Development 3: 189, 199.

Ramady, Mohamed A, ‘Saudi Arabia and the WTO, In the Saudi Arabian Economy, pp. 289-320 (Springer US, 2010).

Steffen Herto, ‘Two-level negotiations in a fragmented system: Saudi Arabia’s WTO accession, ‘15 (2008) Review of international political economy 4: 650,679.

Zaid Ahmad Ansari, ‘Analysis of the impact of reforms on insurance industry of Saudi Arabia’, (2011) 1 Interdisciplinary Journal of Research in Business 8, 28-37.

1
Ramady, M. A., and Mourad Mansour, ‘The impact of Saudi Arabia&# 39; s WTO accession on selected economic sectors and domestic economic reforms,’ (2006) 2 World Review of Entrepreneurship, Management and Sustainable Development 3: 189, 199.

4
Al-Rasheed, Madawi, A history of Saudi Arabia (Cambridge University Press, 2010)

6
Ramady and Mansour, above, n 1

8
Al-Rasheed, above, n 4

10
Bronson, Rachel. «Rethinking religion: The legacy of the US‐Saudi relationship, 28 (2005) Washington Quarterly 4: 119-13

12
Ramady and Mansour, above, n 1

13
Bronson, above, n

15
Ramady and Mansour, above, n 1

16
Ramady, Mohamed A, ‘Saudi Arabia and the WTO, In the Saudi Arabian Economy, pp. 289-320 (Springer US, 2010).

17
Ramady and Mansour, above, n 1

19
Evenett, Simon J., and Carlos A. Primo Braga. WTO accession: lessons from experience. (World Bank Group, 2005).

22
Ramady and Mansour, above, n 1

24
Ramady, above, n 16

25
Ramady and Mansour, above, n 1

26
Ramady, above, n 16

27
Evenett and Primo Braga, above, n 19

28
Ramady, above, n 16

30
Noland, Marcus, and Howard Pack, ‘Arab economies at a tipping point’ (2008) 1 Middle East Policy 15, 60-69.

31
Matthews, Duncan, Globalizing intellectual property rights: the TRIPS Agreement ( Routledge, 2013)

34
Noland and Pack, above, n 30

36
Ramady, above, n 16

37
Gillian Rice, ‘Doing business in Saudi Arabia, ‘(2004) 46 Thunderbird International Business Review 1, 59-84.

38
Binkert, Brigitte, ‘Why the current global intellectual property framework under TRIPS is not working, (2005) 10 Intell. Prop. L. Bull, 143

39
Bhala, Raj, ‘Saudi Arabia, the WTO, and American Trade Law and Policy (2004) The International Lawyer, 741, 812.

42
Hawari, Walaa, ‘100m-euro investment & commitment make Sanofi a key player in Kingdom,’ Arab News, (26 February 2012) <http://www.arabnews.com/node/407379>

43
Bhala. Above, n 35

44
Ramady and Mansour, above, n 1

46
Bond, Eric, Stephen Ching, and Edwin Lai, ‘The role of MFN in WTO accession’ (2003) 1083 Hong Kong Institute of Economics and Business Strategy Working Paper

47
Niblock, Tim. Saudi Arabia: Power, legitimacy and survival (Routledge, 2013).

48
Zaid Ahmad Ansari, ‘Analysis of the impact of reforms on insurance industry of Saudi Arabia’, (2011) 1 Interdisciplinary Journal of Research in Business 8, 28-37.

50
Ramady, above, n 16

52
Niblock, above, n 47

54
Ramady, above, n 16

56
Zaid Ahmad, above, n 44

59
Al-Elg, Ali, and Monzurul Hoque, Charting changes in Saudi Arabian insurance industry, Working Paper (King Fahd University of Petroleum & Minerals, 2006)

60
Zaid Ahmad, above, n 44

61
Ali and Hoque, above, n 59

62
Gillian, above, n 37

65
Ramady and Mansour, above, n 1

69
Madhi, Salah T., and Armando Barrientos, ‘Saudisation and employment in Saudi Arabia (2004) 8 Career Development International 3, 70-77.

70
Ramady and Mansour, above, n 1

71
Alwababa news website, ‘South African department store Woolworths ventures into Saudi market (2003) <http://www.albawaba.com/business/south-african-department-store-woolworths-ventures-saudi-market>

72
Claire Ferris-Lay, “Tesco sets out its stall for Saudi debut in 19-store deal, Arabian Business (17th January 2002)< http://www.arabianbusiness.com/tesco-sets-out-its-stall-for-saudi-debut-in-19-store-deal-440980.html>