11 November 2005

WTO General Council successfully adopts Saudi Arabia’s terms of Accession

WTO General Council formally concluded today (11 November 2005) negotiations with Saudi Arabia on the terms of the country’s membership to the WTO.

The General Council Chair, Ambassador Amina Mohamed of Kenya, congratulated Members for approving the accession of Saudi Arabia. “It is a great honour for me to witness the constructive spirit in which these negotiations have been completed. Members have taken not only a major step towards better international economic cooperation but they have also allowed the World Trade Organization to become more universal,” said Ambassador Mohamed.

The conclusion of those negotiations was also welcomed by Director-General Pascal Lamy. “Today’s decision is a historic event for the WTO. Saudi Arabia is on its way to becoming the WTO 149th Member, paving the way for a stronger multilateral trading system. I look forward with great optimism to the Kingdom’s participation in the Hong Kong Ministerial meeting,” said Mr. Lamy.

Saudi Arabia has been negotiating its membership since July 1993. It has completed its package of documents presenting the Kingdom’s terms of accession at the Working Party meeting on 28 October 2005. The legal texts, which run to some 600 pages, were formally accepted by the 148 Member Governments of the WTO at today’s special session of the General Council. Dr. Hashim A. Yamani, Minister of Industry and Commerce, signed the Protocol of Accession with full powers, thus accepting the Protocol on behalf of the Kingdom. Saudi Arabia will become the 149th Member of the WTO thirty days later, on 11 December 2005.

As a result of the negotiations, Saudi Arabia has agreed to undertake a series of important commitments to further liberalize its trade regime and accelerate its integration in the world economy, while offering a transparent and predictable environment for trade and foreign investment in accordance with WTO rules.

Among the commitments undertaken by Saudi Arabia are the following:

  • The WTO Agreement will be applied uniformly throughout Saudi Arabia’s customs territory.

  • Saudi Arabia agreed to review a fee charged for the authentication of trade documents and to bring it into conformity with WTO rules within two years of accession.

  • Saudi Arabia will eliminate any non-tariff measures that cannot be justified under WTO rules while maintaining the right to restrict the importation and exportation of a certain number of goods and services in order to protect public morals, the life and health of the population, national security interests, etc. In addition, Saudi Arabia has agreed to review the list of banned imports at least once a year and to remove items the importation of which would not compromise the legitimate objectives of the Kingdom.

  • Saudi Arabia will not maintain any export subsidies on agricultural products.

  • Saudi Arabia will ensure that its producers and distributors of natural gas liquids (NGLs) will operate on the basis of normal commercial considerations, based on the full recovery of costs and a reasonable profit.

  • In areas such as the protection of intellectual property rights, the application of technical regulations and standards, as well as the protection of food safety and human, animal and plant life and health, Saudi Arabia will implement the relevant WTO Agreements in full from the date of accession (i.e. the Agreement on Trade-Related Aspects of Intellectual Property Rights, the Agreement on Technical Barriers to Trade and the Agreement on the Application of Sanitary and Phytosanitary Measures).



With the conclusion of market access negotiations on goods, Saudi Arabia committed to gradually lowering trade barriers and expanding market access for foreign goods. Saudi Arabia has bound all tariffs levied on imports. At the end of the ten year implementation period, average bound tariff levels will decrease to 12.4 and 10.5 per cent for agricultural and non-agricultural products respectively. The individual tariff rates for agricultural products will range from 5 to 200 per cent, with the highest rates being applied to tobacco products and dates. Some 11 per cent of non-agricultural products will be imported duty-free whereas the highest tariff rate will affect wood, as well as iron and steel products. Most tariffs (92.6 per cent) will be set at their final bound rates at the date of accession. The remainder will mostly be implemented in 2008 and 2010, but in no case later than 2015.



Foreign insurance companies will be permitted to open and operate direct branches in Saudi Arabia. Commercial presence will also be permitted for insurers that establish a locally incorporated cooperative insurance joint-stock company, in which foreign participation is limited at 60 per cent. A three year transition period will be given to existing foreign insurance providers to convert to either a Saudi cooperative insurance company or to a direct branch of a foreign insurance company. During this transition period, existing foreign insurance providers will be able to continue existing business operations, as well as offer new products and service new clients.


Commercial presence of banks will be permitted in the form of a locally incorporated joint-stock company or as a branch of an international bank. Upon Saudi Arabia’s accession, the foreign equity cap for joint ventures in banking will be increased to 60 per cent. While financial services can only be provided by commercial banks, asset management and advisory services may also be provided by non-commercial banking financial institutions.


Within three years from accession, Saudi Arabia’s commitments will allow up to 70 per cent foreign equity ownership in the telecommunications sector. These commitments apply to both basic telecommunication services and value-added telecoms services. Public telecommunications services will have to be provided by a joint stock company.


While Saudi Arabia will maintain some restrictions on the distribution of goods inside the country, these restrictions will be phased out over a three-year transition period.

> Report of the Working Party WT/ACC/SAU/61
> Schedule of Concessions and Commitments on Goods WT/ACC/SAU/61/Add.1
> Schedule of Specific Commitments in Services, List of Article II MFN Exemptions WT/ACC/SAU/61/Add.2


Video news release on the accession of Saudi Arabia
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WTO Director-General Pascal Lamy and Saudi Arabian Minister of Commerce and Industry H.E. Dr. Hashim A. Yamani

Signing the protocol of accession

The delegation of Saudi Arabia