Contribute to the improvement and development of the investment environment and the entry of the Saudi goods to world markets
The Ministry of Commerce and Investment announced that Saudi Arabia deposits its instrument of acceptance to the WTO to ratify the Trade Facilitation Agreement. Thus, Saudi Arabia is the second Arab country to notify the "WTO" with that.
The Minister of Commerce and Investment, Dr. Majid bin Abdullah Al-Qausabi appraise the decision of Council of Ministers' on Monday to ratify the agreement that facilitates trade within the framework of the World Trade Organization. Therefore, and by the deposit within the established procedure, the Kingdom became the second Arab country to announce ratification of this multilateral agreement.
His Excellency stressed that the Convention on Trade Facilitation was one of the most important multilateral trading system agreements in the WTO. And was one of the most important outcomes of the ninth WTO Ministerial Conference held in Bali, Indonesia, the end of 2013.
He said that this was the first Convention added to the multilateral trading systems agreements after 18 years since the establishment of the World Trade Organization. This agreement is a consent of all Member States and considered important event on the international level. Also, it is regarded as a powerful tool to break the inactivity in negotiations ongoing in Doha since 2001, for it takes all the multilateral trading system out of a critical and long-term dilemma.
He added that the agreement aims to simplify and reduce the additional procedures and requirements requested by the authorities and government agencies related to import and export movement. Also compatibility with the procedures and international standards without compromising the practical level of government supervision to the flow of trade through the territory. All that to facilitate cross-border exchanges between the countries.
His Excellency, the Minister of Commerce and Investment, said at the administrative and customs procedures and documentary requirements of trade and trading, was a huge challenge mostly affected the small and medium enterprises. And by the implementation of the trade facilitation agreement, these companies will benefit from the existence of the unified international standards and simplify procedures. Also the application of such proceedings in a transparent, prior knowledge of administrative and procedural requirements and the necessary documents. All will lead to promote the small and medium enterprises, increase its business in the import and export and more investment.
For his part, the Deputy Minister of Commerce and Investment Foreign Trade Affairs Ahmed Al-Hagbani, explained that studies issued from many international organizations including the World Bank and conducted on the matter of facilitating trade, confirmed that this agreement, when applied, will lead to a reduction of international trade costs by 1% would result in global income rise by $ 40 billion, mostly in developing countries.
The application of this agreement has a positive effect on the trade volume by reducing import and export operations costs. The trade facilitation helps to open new markets and minimize the focus on specific markets
Studies prepared by ESCWA, show that the reduction in transit time by one day will lead to increased exports by 0.4%. In addition to reducing the shipping time by 1% is equivalent to a reduction in customs fees between 0.6% -2.3% equal to prices reduced by 0.9%.
Al-Hagbani explained that as a result of the Convention implementation evaluation that took place on national and GCC levels, the Kingdom will apply 95% of the trade facilitation procedures according to the terms of the agreement. Pointing out that the WTO was informed that Saudi Arabia will work directly on the implementation of 39 out of 41 articles listed in the agreement, and the remaining two on periods. Accordance with the terms of the agreement and after obtaining owed technical assistance with raising self-capacity of some of the concerned institutions.
He pointed out that the number of countries which have deposited the ratification of the trade facilitation agreement at the World Trade Organization reached 81 state member. This Agreement shall enter into force once two-thirds -110 countries out of 164 - give their votes.
Saudi Arabia is one of the Member States of the Organization who actively support the introduction of this Agreement to the multilateral trading system. Also, The Kingdom contributed significantly through the Gulf Cooperation Council (GCC) and the Arab Group and other negotiating groups to the negotiations and legal review that led to the implementation of this agreement.
The ratification of this agreement concurrent with the intention of the Kingdom towards enhancing promising foreign investment opportunities to increase the chances of the desired economic development included the kingdom's vision 2030 and the National Programme of Transformation 2020. Also, it came with the initiations (programs and projects) recently adopted by the Council of Ministers, which will stimulate domestic and foreign investment environments to provide employment opportunities for the citizens. Moreover, this agreement will give opportunities to the Saudi economy to deal and interact with other developed world economies by facilitating the entry of the Saudi goods to the global markets.