Saudi Arabia-WTO

["Ian Murray" <seamus2001@xxxxxxxxx>]

Saturday January 19, 4:53 am Eastern Time
Saudi sets up panel to launch trade courts
By Rawhi Abeidoh

RIYADH, Jan 19 (Reuters) - Saudi Arabia plans to set up tribunals to look into trade disputes, a
long-standing demand by the oil-rich kingdom's major trade partners and foreign investors.

Trade Commerce Minister Osama bin Jaafar Faqih said a committee has been created to study the
setting up of specialised commercial courts, which would be given a mandate to rule on all trade
disputes.

They would replace so-called judiciary committees set up in recent years to deal with a growing
number of trade, banking and other financial disputes.

``We believe that it (the judiciary) should be put in an institutional framework,'' Faqih told
reporters at the weekend.

Riyadh-based diplomats and foreign business leaders say the existing judiciary panels are
ineffective and that the lack of clarity in the Saudi legal system was making it hard for the
conservative kingdom to join the World Trade Organisation (WTO).

They argue that most of the country's laws, based on Islamic Sharia, are ambiguous and that there is
no clear system to rule on legal disputes.

``There are trade disputes that have been left unresolved for decades. Even when there is a ruling
by a judiciary committee or sharia court, influential princes or businessmen do not respect them,''
a Saudi trade analyst told Reuters.

The oil superpower, one of the world's four largest economies still outside the WTO, was among the
first to apply to join the body. It is the only Gulf Arab state in the six-member Gulf Cooperation
Council (GCC) yet to join the WTO.


MOVING GOAL POST

But Faqih said leading WTO members the United States and the European Union (EU) were making unfair
demands and that the kingdom would never compromise its special status as the birthplace of Islam.

He said Saudi Arabia has one of the most liberal economies in the world and had reduced tariffs and
opened up several sectors of its economy to direct foreign investors.

``We feel that this is a moving goal post. Every time we fulfil certain requirements, we find out
that there is more to be fulfilled,'' the commerce minister said.

One of the main obstacles, Faqih said, were unacceptable demands that the conservative kingdom allow
the import, sale and production of alcohol, pork and pornographic materials.

``We are insisting that they have to be sensitive to our cultural differences, religious
differences,'' he said.

Faqih said the kingdom has completed negotiations for WTO entry with 11 of its main trading
partners, including Japan, Canada, Australia, South Korea and Brazil.

But the list he gave did not include the United States or any of the EU members.

Saudi economists say the world's biggest oil exporter must liberalise more sectors of its economy
and overhaul parts of its legal system before it can meet stringent WTO requirements.

They say that it would take at least two years before it could become a WTO member.

Saudi Arabia sees WTO membership as vital to diversifying its energy-led economy, especially
following sharp drops in oil prices in 2001 and this year and to create enough jobs in the private
sector to halt rising unemployment.

It has issued a new investment law allowing foreigners for the first time to own projects and
property, and decided to cut tariffs on some imported goods to five percent from 12 percent.

Analysts say these steps are helpful, but that many sectors remain heavily subsidised.

Another big problem is that many important areas -- such as telecommunications, health,
pharmaceuticals, oil, aviation and banking -- are still not open to foreign ownership.