Addressing the Shortcomings of Saudi–American Trade Relations
Published in Aleqtisadia
(Saudi Arabia) on 22 April 2010
by Tal’at Zaki Hafiz (link to original)
I recently had the good fortune to be invited by the Council of Saudi Chambers of Commerce and Industry to attend a business dialogue on April 19th of this year. This meeting gathered a chosen elite of Saudi businessmen led by Abdul Rahman al-Jarisi, president of the Riyadh Chamber of Commerce and Industry, and American businessmen under the leadership of William Cohen, former secretary of defense and current CEO of the Cohen Group.
As I mentioned earlier, a number of Saudi businessmen were in attendance, representing several financial companies in various economic, trade and investment sectors, including communications and information technology. On the American side, a number of trade, financial and real estate companies were represented, such as USAA Real Estate Company, Blenheim Capital Services, Yahoo and DevCorp.
Both sides agreed that Saudi–American relations, in terms of politics, trade, economics, finances and even culture are very distinguished compared to international relations between other countries. This is because Saudi Arabia and America’s relationship is very old and deeply rooted, especially when one examines its depth and history. The story begins in 1933 when the founder of the Kingdom of Saudi Arabia, King Abdul Aziz Al Saud (may Allah have mercy on him), gave exclusive oil exploration and drilling rights to the American company Standard Oil of California, allowing them access to 495,900 square miles in the eastern region of the country. Following this, there was the famous meeting between the deceased King Abdul Aziz and American President Franklin Roosevelt on the deck of the American warship USS Quincy in 1945 as it crossed the Suez Canal near the Great Bitter Lake and the Small Bitter Lake.
There is not a shadow of a doubt that Saudi–American ventures undertaken in the interest of expanding trade relations between the two countries have been both wide in scope and rapid, especially when they were linked with the efforts of the U.S.–Saudi Arabian Joint Commission for Economic Cooperation, which was founded in 1974, and the U.S.–Saudi Business Council. Both groups have set the standard of quality in large-scale trade relations. These efforts were further distinguished in 2003, when the two countries agreed to develop trade and investment relations, and in 2005, when the two agreed to fully realize cooperation in the goods and services sector. This resulted in remarkable development in trade exchanges, confirmed by the growth of trade between the two countries from $160 million in 1970 to more than $30.8 billion in 2007. In addition, American companies have begun to pioneer joint ventures in Saudi Arabia, with more than 360 ongoing projects valued in excess of $20 billion.
Despite the development of trade relations between Saudi Arabia and America in the past, the two sides agreed that the scope of these relations does not even begin to reflect the weight and significance of the Saudi economy, let alone that of the American economy. The Saudi economy, considered the largest in the region, represents 22 percent of the combined GDP of all Arab nations, while the American economy is considered to be the largest in the world. There are still many trade and investment opportunities available that have not been explored. At the end of this month, a high-ranking Saudi delegation — led by the minister of commerce and industry and including financial, petroleum, education and business leaders — will visit the U.S. in order to hold a forum on Saudi–American business opportunities. During this forum, the Kingdom will show the U.S. investment opportunities in promising fields such as energy, petrochemical products, electricity, water and infrastructure development.
Developing and strengthening business relations between the Kingdom and America requires addressing a number of weak points and shortcomings. Both sides suggested the need to facilitate the visa application process for all travelers but especially for businessmen because the delays hinder both the movement of businessmen traveling between America and Saudi Arabia and the flow of business deals. The Americans stressed the necessity for Saudis to advertise current investment opportunities in the Kingdom to American businessmen and to encourage them to invest in Saudi Arabia. One American businessman in particular was looking forward to Saudi Arabia permitting foreigners to directly invest in the Saudi financial market and for the days of the Saudi weekend to be changed to coincide with the weekend in the rest of the world. This would help to streamline trade as well as quicken business deals and meetings between the two countries, and in this regard, may we always keep Allah in our intentions.
As I mentioned earlier, a number of Saudi businessmen were in attendance, representing several financial companies in various economic, trade and investment sectors, including communications and information technology. On the American side, a number of trade, financial and real estate companies were represented, such as USAA Real Estate Company, Blenheim Capital Services, Yahoo and DevCorp.
Both sides agreed that Saudi–American relations, in terms of politics, trade, economics, finances and even culture are very distinguished compared to international relations between other countries. This is because Saudi Arabia and America’s relationship is very old and deeply rooted, especially when one examines its depth and history. The story begins in 1933 when the founder of the Kingdom of Saudi Arabia, King Abdul Aziz Al Saud (may Allah have mercy on him), gave exclusive oil exploration and drilling rights to the American company Standard Oil of California, allowing them access to 495,900 square miles in the eastern region of the country. Following this, there was the famous meeting between the deceased King Abdul Aziz and American President Franklin Roosevelt on the deck of the American warship USS Quincy in 1945 as it crossed the Suez Canal near the Great Bitter Lake and the Small Bitter Lake.
There is not a shadow of a doubt that Saudi–American ventures undertaken in the interest of expanding trade relations between the two countries have been both wide in scope and rapid, especially when they were linked with the efforts of the U.S.–Saudi Arabian Joint Commission for Economic Cooperation, which was founded in 1974, and the U.S.–Saudi Business Council. Both groups have set the standard of quality in large-scale trade relations. These efforts were further distinguished in 2003, when the two countries agreed to develop trade and investment relations, and in 2005, when the two agreed to fully realize cooperation in the goods and services sector. This resulted in remarkable development in trade exchanges, confirmed by the growth of trade between the two countries from $160 million in 1970 to more than $30.8 billion in 2007. In addition, American companies have begun to pioneer joint ventures in Saudi Arabia, with more than 360 ongoing projects valued in excess of $20 billion.
Despite the development of trade relations between Saudi Arabia and America in the past, the two sides agreed that the scope of these relations does not even begin to reflect the weight and significance of the Saudi economy, let alone that of the American economy. The Saudi economy, considered the largest in the region, represents 22 percent of the combined GDP of all Arab nations, while the American economy is considered to be the largest in the world. There are still many trade and investment opportunities available that have not been explored. At the end of this month, a high-ranking Saudi delegation — led by the minister of commerce and industry and including financial, petroleum, education and business leaders — will visit the U.S. in order to hold a forum on Saudi–American business opportunities. During this forum, the Kingdom will show the U.S. investment opportunities in promising fields such as energy, petrochemical products, electricity, water and infrastructure development.
Developing and strengthening business relations between the Kingdom and America requires addressing a number of weak points and shortcomings. Both sides suggested the need to facilitate the visa application process for all travelers but especially for businessmen because the delays hinder both the movement of businessmen traveling between America and Saudi Arabia and the flow of business deals. The Americans stressed the necessity for Saudis to advertise current investment opportunities in the Kingdom to American businessmen and to encourage them to invest in Saudi Arabia. One American businessman in particular was looking forward to Saudi Arabia permitting foreigners to directly invest in the Saudi financial market and for the days of the Saudi weekend to be changed to coincide with the weekend in the rest of the world. This would help to streamline trade as well as quicken business deals and meetings between the two countries, and in this regard, may we always keep Allah in our intentions.