- The Washington Times - Thursday, November 24, 2005

Saudi Arabia won formal approval yesterday to enter the World Trade Organization, and will likely attend the WTO ministerial meeting in Hong Kong next month as a full member. The country’s bid to enter the WTO, which began 12 years ago, has prompted the kingdom to open up its hermetic economy, but it remains unclear whether membership will lead to the kind of transformative political reforms the Bush administration is pushing for in the Middle East.

China’s entry into the WTO demonstrates that a country can take steps to liberalize its economy and remain stagnant, and even regress, on political reform. Still, Saudi Arabia is distinct from China in that it is under greater U.S. pressure to democratize. Also, Riyadh’s WTO bid has provided the kingdom with a circuitous route to normalize trade relations with Israel.

King Abdullah — who became Saudi Arabia’s monarch this year but had been the country’s defacto ruler for the past decade due to the incapacitating illness of his father, King Fahd — has driven his country’s WTO effort and will reap the political rewards of membership. Saudi Arabia’s WTO entry is also a political success for President Bush, who hopes to create an integrated Middle East Free Trade Area over 10 years.

In order to gain entry, Saudi Arabia opened up many sectors of its economy, allowing foreign ownership of up to 60 percent for banking and insurance, and up to 70 percent for telecommunications — areas where the leadership had been quite protective of. Importantly, Saudi Arabia was also required to drop its economic boycott of Israel, a fellow WTO member. That move can only be positive. A trading relationship can foster a pragmatic mutual tolerance.

Saudi Arabia’s entry to the WTO will likely lead to economic and job growth — and create the potential for making jihadist rhetoric less appealing to the country’s vast young population. Membership could also facilitate the diversification of Saudi Arabian industry, which, in turn, could help prevent an economic collapse as the world mines and utilizes other energy sources. A meltdown of the Saudi Arabian economy could pose a national-security threat to the United States and its allies.



The Islamic establishment in Saudi Arabia is apparently uncomfortable with the country’s WTO entry — another encouraging sign for the West. Saudi Arabia’s actions in the short term will illustrate to what degree free trade can be relied upon to drive broad reform in the Middle East.

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