WTO Trade Policy Review of Saudi Arabia
Statement delivered by Chris Wilson,
Deputy U.S. Permanent Representative to the World Trade Organization
April 4, 2016
Thank you, Chair. I would like to join others in welcoming Ambassador Al-Otaibi and his distinguished delegation from Riyadh to Geneva for Saudi Arabia’s second Trade Policy Review
Saudi Arabia’s economy currently faces many challenges, and the United States is proud to support Saudi Arabia’s economic growth and reform efforts to overcome them. The United States and Saudi Arabia enjoy a broad, deep and robust friendship and partnership, with cooperation spanning a range of the economic and security issues confronting the Middle East region and the world.
I am pleased to note that trade between the United States and Saudi Arabia has steadily increased since 2005, with bilateral two-way goods trade between the U.S. and Saudi Arabia reaching $42 billion in 2015, and the stock of U.S. foreign direct investment in Saudi Arabia was $10.1 billion in 2014.
The United States continues to support Saudi Arabia’s economic reforms and efforts to diversify its economy away from reliance on trade in traditional commodities, and our governments continue to explore various means of further enhancing our trade relations. Our governments also regularly consult with each other on issues of mutual importance and recognize the value of continued cooperation on a range of issues. We appreciate our ongoing cooperation with Saudi Arabia in all fora, including in the WTO.
While Saudi Arabia has reason to be pleased with the results of its economic reform efforts to date, some concerns remain, and the written questions that the United States submitted in the context of this TPR address some of those concerns. Many of the questions we pose today reflect our desire to encourage Saudi Arabia to move forward expeditiously on important WTO initiatives and commitments, including formally ratifying and accepting the Trade Facilitation Agreement. We also urge Saudi Arabia and its partners in the Gulf Cooperation Council to complete the transparency review of its customs union, as provided for under WTO rules.
In addition, it is important that Saudi Arabia fulfill its commitment to begin accession negotiations for to the WTO Agreement on Government Procurement, in accordance with Saudi Arabia’s 2005 Working Party Report. We strongly urge Saudi Arabia to begin its GPA accession by the end of April of this year and the United States stands ready to work with Saudi Arabia on its GPA accession. We also strongly encourage Saudi Arabia to join the recently concluded expansion of the Information Technology Agreement. These actions would be a good way for Saudi Arabia to work toward boosting its participation in the multilateral trading system, and we will be interested to hear the government’s plans in this regard.
Also related to government procurement, we understand that Saudi Arabia has recently instituted a change in policy that requires offsets in the form of domestic investment of 40% of the contract value for any awards over 400 million Saudi riyals. However, as of yet, no information seems to have been made public about how the offset program will be operationalized. We look forward to hearing from Saudi Arabia about the details of this program, including how investment proposals will be reviewed and approved, and whether there are any industries or sectors that are not covered by this policy.
The United States would also like to see Saudi Arabia continue to improve the adequacy and enforcement of IPR protection, including through the imposition of penalties that will deter copyright violations, action to increase the use of legal software within the government and adequate protection for patented pharmaceutical products.
The United States urges Saudi Arabia to continue developing and expanding its efforts to ensure that technical regulations and standards are notified to WTO Members in draft form with enough advance notice that stakeholders have sufficient time to review and comment and that Saudi authorities can take those comments into account before finalizing the regulation or standard. The United States has found that consultation with, and involvement by, all interested parties in the regulatory process leads to rules and regulations that better meet their objectives while minimizing trade distorting effects. U.S. firms are committed to ensuring that their products meet relevant Saudi – as well as those of the Gulf Cooperation Council – technical regulations in order to access the Saudi market. These businesses would like to avoid past instances where they were unaware of technical regulations in advance of implementation, leaving them with little or no time to modify their manufacturing processes. In addition, as the GCC reduces trade barriers, harmonizes regulations and increases transparency, we encourage Saudi Arabia to work with its GCC colleagues to accelerate that important work in line, of course, with its WTO obligations.
In closing, Chair, I would like to emphasize that Saudi Arabia is a valued partner of the United States, and we congratulate Saudi Arabia for its efforts to develop a more open trade and investment regime. We believe that its continued adherence to the rules and principles of the WTO will bring Saudi Arabia a brighter future. We hope that this discussion today will encourage Saudi Arabia’s continuation of those policies and we look forward to continuing our work with Saudi Arabia to achieve those goals.
We wish Saudi Arabia a successful review and we thank the delegation for its attention to our questions.