I would first like to welcome the Delegation of the Kingdom of Saudi Arabia, led by H.E. Mr. Abdulrahman ALHARBI (Governor of the Saudi General Authority of Foreign Trade). I would also like to thank the WTO Secretariat and the Delegation of Saudi Arabia for their reports, which form the basis for our discussion today and the Discussant, H.E. Mrs. Zhanar AITZHANOVA (Ambassador of Kazakhstan) for her remarks.
Trading has a very long and illustrious history on the Arabian peninsula. Frankincense and myrrh, highly prized in antiquity as fragrances, could only be obtained from trees growing in southern Arabia, and parts of Africa. Arab merchants brought these goods to Roman markets by camel caravans along the Incense Route.
The Kingdom of Saudi Arabia remained actively engaged in preserving the openness and the transparency of world trade during the economic and health crisis of the last years. The EU would like to underline the particular role and contribution provided by the Kingdom of Saudi Arabia during its G20 chairmanship, notably its proactive stance with regard to the WTO reform. The EU welcomed the “Riyadh initiative on the future of the WTO”, which started a political dialogue to generate common views on the WTO reform. The EU counts on the ongoing commitment of the Kingdom of Saudi Arabia to the urgent task of WTO reform.
Since 2016, the Kingdom of Saudi Arabia is also pursuing an upgraded, internal economic modernisation agenda, embodied by the “Vision 2030” Programme, an ambitious roadmap for economic diversification and further economic development. The country has also taken important steps to improve the investment climate and to facilitate business cooperation.
The Covid-19 pandemic had deep worldwide repercussions on the economic landscape, including in the Kingdom of Saudi Arabia. The drop of oil prices and travel restrictions hit heavily the plans to diversify the economy, to launch wide scale projects and to attract tourism. GDP declined by 5.4 in 2020. Despite the Covid-19 pandemic, the IMF predicts that the economy of the Kingdom of Saudi Arabia will grow at 3% in 2021.
However, the EU notes also that, according to IMF data, the Saudi economy remains dependent on exports of crude oil products; and the petroleum sector accounted for two thirds of government revenue before the Covid-19 crises. Diversification away from fossil fuels is necessary in light of the global policy changes to pursue environmental and climate-friendly economic development.
Open trade and investment policy would contribute to achieve transformational goals the fastest. Therefore, the EU would encourage the Kingdom of Saudi Arabia to consider further policy initiatives for enhancing the transparency of its regulatory environment and further opening up to investment. Such measures would further support economic growth and employment and steer its economy towards a more sustainable trajectory, and foster the Kingdom's attractiveness as a destination for EU foreign investment.
As regards the EU’s bilateral relationship with the Kingdom of Saudi Arabia, trade, investment and economic dialogue form an important part of the bilateral agenda. The EU is Saudi Arabia’s second trading partner, with 15.2 % of Saudi Arabia’s global trade (the EU is 1st in terms of imports and 2nd in terms of exports), while Saudi Arabia is the EU's 14th largest partner for trade in goods. Moreover, the EU is Saudi Arabia’s largest foreign investor. While the negotiations for an EU-GCC FTA were suspended in 2008, the EU remains open to engage in a dialogue on how to bring the trade partnership forward in order to provide for enhanced trade and investment cooperation.
In the WTO, the EU works with the Kingdom of Saudi Arabia on the Joint Statement Initiatives on e-commerce, investment facilitation for development, domestic regulation in services, and micro, small, and medium-sized enterprises, which constitute an important and forward-looking agenda for the international trade and this organisation.
While the EU acknowledges that the Kingdom of Saudi Arabia has undertaken important initiatives to facilitate trade and foreign investment, it is the EU's view that further efforts would be necessary, to enhance the transparency of the import procedures, in particular with reference to standards and technical regulations. Moreover, the EU would also see a need for a review of the requirements for investment and running businesses in Saudi Arabia, with the view to open more activities to foreign owned companies and to provide more tools to enhance the transparency over the established entities and to assist international companies in finding the appropriate partner for doing business.
On behalf of the EU, I wish the Kingdom of Saudi Arabia a very productive and successful review.