Can Saudi Arabia ever join the WTO? (page 1 of 3)

For nearly a year, Saudi Arabia's accession to the World Trade Organization has been a hot issue not only for the Saudis, but also for the Bush administration, which sees a strategic benefit from having the Gulf's largest state as a member of the world's largest trade organization.

Yet optimism was not always plentiful. During last September's 2003 WTO meeting in Cancun, Mexico, an observing Saudi delegation could not have been impressed by members' inability to come to an agreement on goals set out in Qatar the previous year.

However, both Washington and Geneva were adamant that negotiations for the inclusion of new members, especially from the Middle East, should not be undermined by lack of agreement on broader concerns outlined in the Doha accords. According to officials in Geneva, it was Kuwait that began consulting Saudi Arabia on the prospect of membership and accelerating the process soon after the meeting in Mexico.

With the support of the United States, the prospect of Saudi Arabia's accession into the WTO was well underway. Speeding up. The Bush administration had a vested interest in seeing Saudi Arabia become a member.

On an economic development level, Washington wanted to see Riyadh not only bolster its country's private sector, but also open the country up to US and European investors, as well as others from outside the region. The best way for that to happen was to accelerate negotiations with Saudi Arabia in order for it to meet the requirements for becoming a WTO member.

It was only later that the United States became more vocal about using trade negotiations as a foreign policy tool to bring about overall reform in the Middle East, seeing it as a platform for a wider reform push. That is something which in the last few months has become a bone of contention as far as relations between the United States and countries in the Middle East are concerned.

Since a leak of documents earlier this year that talked about President Bush's broad vision of reform in the greater Middle East, Riyadh has naturally become more skeptical of Washington's plans for the region. Especially when the plans resemble those applied in the 1990s to privatize industry in the former Soviet Union, which proved monumental failures.

But that has not stopped the United States from pushing through negotiations with Saudi Arabia, which has been quick to step up its efforts to create the trade guidelines and economic legislation required to join the WTO. The prospect of accession has been, perhaps, one of the only things the two countries really share enthusiasm for in public.

At the helm in these negotiations is US Trade Representative Robert Zoellick, who has pursued that course aggressively and relentlessly. Although there were some sticking points on getting Saudi Arabia up to WTO standards regarding import-export insurance law, "the kingdom has made good progress" and brings a "great attitude" to the negotiating table, Zoellick said in March after a meeting to discuss a free-trade agreement with Bahrain.

More recently, though, the kingdom has made a series of moves to bring the economy into closer alignment with WTO standards, including on the crucial issue of insurance reform.