Editor's Note:

Among the people who traveled with the Saudi Trade Mission that crisscrossed the United States in May were American diplomatic, commerce and other officials who along with the dozens of Saudi delegates provided the latest information on the prospects for doing business in the Kingdom.  Mr. Gary A. Grappo, the Deputy Chief of Mission, or "number two," at the US Embassy in Riyadh, was a member of the opening panel during the Chicago visit.

SUSRIS was there to hear Mr. Grappo's upbeat presentation to the American business people who attended the Trade Mission's "Windy City" session.  We are pleased to share Mr. Grappo's presentation in both an audio format and as a transcript.  We were also fortunate that Mr. Grappo generously took time to talk with SUSRIS about the business relationship, in particular, and the overall US-Saudi relationship.  That interview will follow shortly after this presentation.

Mr. Gary Grappo
Deputy Chief of Mission, US Embassy Riyadh
Presentation at Saudi Trade Mission Visit - Chicago, IL
May 16, 2005

Good morning. On behalf of Ambassador Jim Oberwetter, the US Ambassador to Saudi Arabia, and the entire US mission in Saudi Arabia, I want to express my pleasure in seeing all of you here today, in the Saudi trade mission. According to our records it is one of the largest, if not the largest, in the history of the trade relationship between our two countries.

The timing of this trade mission could not be better. You've heard from a number of speakers already that we have some extraordinary developments occurring in the kingdom, which should be attractive to American businesses.

Last month the President met with Crown Prince Abdullah in Texas and the two leaders renewed not only their personal friendship but also that between our two countries.

In their meeting they also agreed that momentous changes in the world call on us to forge a new relationship between our two countries. The strength and partnership that's built on our past relationship meets today's challenges and embraces the opportunities our nations will face in the next sixty years.

One of the pillars of that historic partnership has been the strong business ties between America and Saudi Arabia. One of the clearest opportunities we have, lies in strengthening those business ties which our Saudi friends will address with you today. Last year bilateral trade between the United States and Saudi Arabia totaled more than $26 billion, making Saudi Arabia our largest trading partner in the Middle East and the eighteenth in the world.

Last year US exports to Saudi Arabia grew by 14 percent. In the first quarter of 2005 our exports to the kingdom are up 20 percent over the same period last year.

The Embassy's commercial section continues to bring hundreds of Saudi business delegates to trade shows in the US each year. Our three commercial offices in Riyadh, Jeddah and Dhahran work with one hundred eight department of commerce export assistance centers around the US to facilitate trade. Since the year 2000 these efforts have contributed over two billion dollars worth of US exports to the kingdom.

The private sector is playing a larger role in these projects as privatization in telecommunications, insurance, petrochemicals, and mining proceeds. The other good news for American business is that Saudi Arabia's economy is opening up and becoming modernized. The kingdom has made good progress in its efforts to join the World Trade Organization, and the United States hopes to see this process completed by the end of this year.

The drive to join the WTO has produced numerous economic reforms. Saudi Arabia has started to reform its telecommunications sector. A mobile phone market and an Internet data service has been opened to competition and the state owned Saudi Telecommunications Company has been partially privatized.

There has been impressive reform in the kingdom's capital markets. Saudis now have a stock market modeled on the NASDAQ. The capital markets authority was modeled after the Securities and Exchange Commission. Preparations are underway for the issuance of domestic corporate bonds, and private brokerage houses can be established under the new capital markets law.

The Saudi banking sector has expanded to eleven private banks, and licenses have been granted to foreign banks including JP Morgan and Chase. We are very pleased by the central bank's and other government efforts to implement regulations to combat money laundering, and terrorist financing.

Saudi government has improved legal protection. Intellectual property rights, with copyright and trade mark laws as well as plans to improve patent protection. Last year anti-piracy raids across the country resulted in the destruction of thousands of illegal items.

We strongly support these measures and encourage further movement on economic liberalization. I mentioned earlier that business ties have historically served as a pillar of the US-Saudi relationship. That relationship has also stood on the pillars of regional security and energy.

Today Saudi Arabia and the United States are partners in the global war on terror. In May 2003 the kingdom became the target of attacks by terrorists linked to Al Qaeda. There have been additional attacks since then. Crown Prince Abdullah, his government and Saudis across the kingdom understand that no country is immune from the threat of terrorism. The Saudi leadership is fully committed to eradicating terrorism from the kingdom.

Many Saudis as well as Americans and others have lost their lives in the course of the last two years in terrorist attacks. They include almost forty from the security services where over two hundred have been injured in combating terrorists throughout the kingdom. Damage to property has exceeded a quarter of a billion dollars, and the Saudis are spending hundreds of millions to prosecute the war on terror each year.

I mentioned the good news about Saudi Arabia's economy and its prosecution of the war on terrorism. There is other good news to report. There has been noteworthy political reform as well in the kingdom. The recent municipal elections were the first nationwide elections in the country's history. There have been a series of national dialogues to encourage public discussion on difficult issues such as the role of women, the needs of youth and dialogue among religions.

The government has begun the difficult but essential task of reforming the educational system with a view to rooting out opponents of intolerance while making education more relevant to the job market.

Today, again as partners we both confront the common threat of terrorism. We've worked closely and successfully in destroying terrorist networks and undermining terrorist capabilities. But to effectively root out terrorism and extremism that propels it we must also work to advance development and opportunity.

A partnership founded in trade and investment is key to that effort. I join our Saudi friends and colleagues here today encouraging you to become a part of this partnership and take advantage of the many opportunities now present in the kingdom. Thank you.

Gary A. Grappo is Deputy Chief of Mission (DCM) at the U.S. Embassy in Riyadh.