19 Nov, 2008 - Saudi Arabia is a $7 billion import market for food and agricultural products. Saudi imports of consumer-oriented products are growing approximately five percent annually and are now estimated at $3.5 billion.
In 2007, U.S. agricultural exports increased 63 percent over a year earlier to about $727 million. U.S. exports of consumer-oriented food products to Saudi Arabia reached a record $171 million in 2007, an increase of 11 percent from 2006.
Trade Situation
In December 2005, Saudi Arabia became a member of the WTO; it agreed to ease trade restrictions and improve trade and investment opportunities in an effort to diversify its economy.
Saudi Arabia is a member of the Gulf Cooperation Council (GCC), which also includes Kuwait, Qatar, Bahrain, the United Arab Emirates and Oman. Membership confers special trade and investment privileges to member countries. Processed food products manufactured in any of these countries can be exported to other GCC countries duty-free. In January 2003, the GCCformally instituted its Customs Union.
A five percent across-the-board common external tariff now applies to most imported food and agricultural products that enter from non-GCC suppliers. Also, the GCC is moving forward with its plan for greater economic integration.
In January 2008, the GCC launched a common market. The deal offers GCC nationals several benefits including free flow of capital, equal opportunities for GCC citizens to get employed in all government and private institutions, buy and sell real estate, engage in other investments, free movement of GCC nationals in the six member countries, receive education and health benefits in member countries. The GCC believes the agreement would increase investments and trade between member countries as well as strengthen the position of member states in free-trade talks and in the WTO.
The common market requires that the GCC harmonize various regulations including food and agricultural imports standards. The most ambitious GCC plan is the establishment of a monetary union, and a unified common currency by 2010.
Saudi Arabia is also a member of the Arab League, which three years ago agreed to negotiate an Arab free trade zone. Thus far, no major progress is reported in this area.