Saudi Arabia's Accession to the WTO: Is a "Revolution" Brewing?
Middle East Policy Council Capitol Hill Conference Series on US Middle East Policy
U.S. Capitol
Washington, D.C.
January 13, 2006

C. Christopher Parlin
Partner, Loeffler Tuggey Pauerstein Rosenthal, LLP

Thank you. My firm and I have had the pleasure, continue to have the pleasure to work with the Saudis as their WTO experts. We helped them through the last three years of the negotiating process toward WTO accession and are continuing to help them as they work toward becoming a model WTO citizen. I think it's appropriate that I am placed between two distinguished colleagues with an American perspective. I will provide a Saudi perspective. I should make the note that while I do represent the Saudis, I have not prescreened my remarks with the Saudi government and therefore, I think they would appreciate my saying that what I say conceivably is not exactly put in the way that they might - their officials might say it. I think I have the spirit though.

The spirit of the remarks certainly echoes what Chas said in his introduction and Bud [Clatanoff] said from the American perspective. The Saudis weren't pushed into WTO accession. They acceded. They joined the WTO because they wanted to do it. And I do think very, very clearly that the vision of King - during most of the process Crown Prince - Abdullah was critical for this effort. They also happen to have an extraordinary team of senior negotiators - Commerce Minister Yamani was a strong driving force, State Minister Alireza, and in my mind first and foremost, their chief negotiator Fawaz al-Alami. Every government should be so lucky as to have people like these moving them along.

Let me shift to some of the technical details, and hopefully technical does not mean boring. What were the core elements of Saudi accession? As Bud has said, the core element is joining the WTO, agreeing to the set of substantive and procedural agreements that are part of the WTO treaty. I use treaty in the international law and not U.S. law sense. There needs to be a footnote though. Think about a country club - 148 members. You are seeking to join the club. It is the members, the 148 who tell you what the rules are. You can say, oh, no, no, no. I'm sorry. My interpretation of what you would like me to do in sanitary and phytosanitary standards with respect to scabie-mouthed sheep. This is the type of exciting issue that you deal with in the real world. I'm sorry, my understanding is different. And at that point, Australia looks at you very politely and says, that's fine. You can sit at the other side of the table for as long as you take that position. So there is an element of slightly less - I'm being polite - than equal bargaining. That not withstanding, I will say from our perspective as the Saudi lawyers - and I think the Saudi government officials would agree with this - the U.S. delegation in particular was incredibly tough, but incredibly fair. We knew where they were coming from and we were able, when the evidence and the arguments were on our side, to shift the direction of the aircraft carrier and to get a position in the end that was much more feasible, much more rational from the Saudi point of view.

Okay, what happened? You can go into the details of all the specifics, the scabie-mouthed sheep, the shortening of the negative list, the negotiations leading to agreement on cooperative insurance. The reality though is across the board, the Saudis liberalized their markets and restructured their legal regimes. In short, they fostered a more open and balanced economy, one that will be infinitely more receptive to foreign participation than had been the case in the past. And there will be countless new opportunities for both Saudi and non-Saudi entrepreneurs in a wide scope of business interests.

As I said, this transformation occurred across the board. In all of the technical areas, there were major reductions. In the area of customs tariffs on goods, significant reductions in the level of tariffs, significant elimination of quota restrictions and other bureaucratic impediments, the agency system and the like, that had made trading with Saudi Arabia difficult, a reduction across the board in difficulties in agriculture, in services, and a wholesale revamping of Saudi's intellectual property regime. In fact, from my perspective, I think it is not too much of a stretch to say that the Saudis went from an extremely rudimentary - in some cases, non-existent - regime of intellectual property coverage, protection, enforcement to one that on paper is world class, state-of-the-art. Commitment to the rule of law, transparency: buzzwords in the legal and international economic WTO community, but buzzwords with a tremendous degree of significance. The Saudis recognized and accepted wholeheartedly that it was important for them to have a system that others could understand. Decisions behind the sheets were to be a thing of the past. There was to be publication and announcement ahead of time of changes in government regulation and an ability of commercial actors, non-Saudi as well as Saudi who were interested in the areas to participate in the discussion process.

What does all this mean? I found the title of this seminar fascinating, particularly since in the version that I had the word revolution was not in quotation marks. I spent some time thinking about that. Will there be a revolution in the sense of backlash among the conservative elements in the kingdom who think the 14th century is just fine, thank you. Not likely in my opinion. Or will there be the revolution in the sense that Chas and Bud have talked about, a major revision of the way that Saudi deals with the rest of the world.

The proof is in the pudding, to use probably a non-Saudi clich�. But I think it is safe to say that if efforts are successful to continue to put into operation the promises, the commitments, the agreements that have been made in terms of the accession, that Saudi Arabia will indeed become a very important, vibrant part of the world community.

Thank you very much.

Biography - Click Here

Presentations provided in separate SUSRIS IOIs:

• William Clatanoff - Former Deputy U.S. Trade Representative for Labor

• C. Christopher Parlin - Partner, Loeffler Tuggey Pauerstein Rosenthal, LLP

• Robert Jordan - Former U.S. Ambassador to Saudi Arabia

• Charles Kestenbaum - Former Regional Director, U.S. Dept. Of Commerce

• Jean-Francois Seznec - Adjunct Professor, Columbia University's Middle East Institute

• Moderator/Discussant - Chas. W. Freeman, Jr. - President, Middle East Policy Council

• Questions and Answers

Middle East Policy Council

The MEPC, since its formation in 1981, has provided political analysis of issues involving the greater Middle East. Through its programs, publications and Web site, the Council strives to ensure that a full range of U.S. interests and views are considered by policy makers. We challenge the conventional wisdom, ask the difficult questions, encourage a wide spectrum of views, provide forums to stimulate thinking. The Council strives to fulfill these objectives through three major activities:

• Middle East Policy - a quarterly journal of political, economic and social analysis.

• A Capitol Hill Conference Series - forums for members of Congress, their staffs, federal government officials, foreign policy experts and the media.

• Workshops for high school teachers - daylong training sessions to build a fact-based foundation for educating America's youth about the Arab world and Islam.

KNOWLEDGE, INSIGHT AND PERSPECTIVE - THESE ARE THE PATHS TO UNDERSTANDING. THEY ALSO ARE GOALS OF THE MIDDLE EAST POLICY COUNCIL.

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On SUSRIS

WTO Accession:

• Accession of Saudi Arabia to the WTO - SUSRIS

• World Trade Organization Accession - SUSRIS IOI - Nov. 10, 2005

• The Implications of WTO Membership: A View from the Kingdom - SUSRIS IOI - Oct. 30, 2005

• World Trade Organization Accession: Saudi Arabia Gets "Green Light" - SUSRIS IOI - Oct. 28, 2005

• WTO Accession: One Step Closer - SUSRIS IOI - Oct. 12, 2005

Capitol Hill Series:

• 35th in the Capitol Hill Conference Series on U.S. Middle East Policy Conference Panel, January 23, 2004 Saudi Arabia: Enemy or Friend?

• David Aufhauser, Former General Counsel, Department of the Treasury

• Frank Anderson, Former Chief, Near East and South Asia Division, CIA

• David Long, Retired U.S. Foreign Service Officer -- Saudi Arabia, Sudan, Morocco and Jordan

• Nathaniel Kern, President, Foreign Reports, Inc.

• Hussein Shobokshi, President, Shobokshi Development & Trading; Managing Director, Okaz Printing and Publishing