Us Saudi Arabia Trade Agreements
A notable exception to this rule is the production of food. While most foodstuffs are not convenient for importing from the United States, where they are relatively cheap, the removal of trade barriers between Arab states can lead to lower prices for regionally grown foodstuffs and protests among farmers. [Citation required] The dominant position of oil in the export portfolio means that there is a direct link between the price of oil and the health of the country`s trade indicators. In 2012, when oil prices were close to their record high, the trade surplus amounted to $247 billion, according to the Saudi Monetary Authority (SAMA). After a significant drop in benchmark oil prices, the trade balance fell to a low of $44 billion in 2015. During this period, the current account balance also fell into the red for the first time since 2009, with a negative value of $57 billion in 2015 and $24 billion respectively in 2015 and 2016. The episode recalled the importance of economic diversification – a long-term goal of hydrocarbon-dependent economies around the Gulf. The kingdom`s recent response to this challenge is contained in the Saudi 2030 Vision, the strategic plan that guides the country`s economic and social development. One of the three key pillars of the strategy is to establish the kingdom as the « epicentre of trade and the gateway to the world » and to take advantage of its strategic position linking the three continents of Europe, Asia and Africa.
These efforts require a comprehensive restructuring of the Saudi economy, an increase in non-oil government revenues of SR 163 billion ($43.5 billion) at the time of the drafting of the project in 2016 at SR1trn (US$266.6 billion) by 2030 and an increase in non-oil exports as a percentage of non-oil revenues from 16% to 50%. Saudi Arabia is a founding member of the Organization of the Petroleum Exporting Countries (OPEC). As a member of the GCC, Saudi Arabia participates in a series of free trade agreements (FTAs) and free trade agreements managed by the economic bloc. The GCC has signed a free trade agreement with Singapore and the European Free Trade Association. Saudi Arabia is also a member of the Arab Wholesale Zone (GAFTA). Saudi Arabia`s trading partners include the United States, China, Japan, South Korea and Germany. Saudi Arabia`s efforts to improve its trade infrastructure are also helping to improve its attractiveness as a foreign direct investment (FDI) site. One of the main objectives of the 2030 vision is to increase the payout to the country from 3.8% of GDP to 5.7%.
However, to meet this challenge, it will be necessary to reverse a negative trend in foreign investment, which has continued for several years. The government`s determination to attract investment has led to a change in mentality in its long-standing policy of preventing special economic zones (SEZ). Free trade zones and zenics are a growing trend in the region and, according to the OECD, have added a global trade value of $500 billion and created employment opportunities for 66 million people in 2018. The United Arab Emirates has 45 free zones and another 10 are under construction in 2018. Saudi has historically preferred to promote its low-tax, low-cost input framework as a single economic area, but in late 2018 it revealed details of its first SEZ, to be located to Riyadh`s international airport.