Gulf states will gain from Saudi Arabia's WTO entry

After twelve years of difficult negotiations and considerable pressure, Saudi Arabia will finally be admitted to membership of the World Trade Organisation (WTO).

With this development, all the Gulf states will have or be in the process of joining in the WTO. This gives the region the opportunity to work together for the first time.

At the time when the other five GCC states initiated reforms of their trading system, the Saudi trade sector remained relatively detached from the changes benefitting its partners. As a result the economic cycle between the different GCC trading nations grew further apart rather than closer together.

The GCC states have already lost many opportunities because of their unilateral negotiations with the other countries and groups. Indeed, unilateral negotiations strip a negotiator from many of the cards played by economic unions.

The European Union provides a good model here. Deregulation is going to have an affect on all those areas that provide wealth to the region: oil, petrochemicals and financial sector's services provided by banks, insurance companies and financial and investment institutions.

Crude oil, which is the primary source of wealth in all the GCC states, has not yet been finally resolved at the WTO level. As for the petrochemical industries, which produce ambiguous and unclear materials, are becoming subject to loose legal interpretations.

The financial sector is yet another sensitive issue for the GCC states.

However, both sectors will face sterner, more international competition in the coming years. Preparation for such competitive conditions will decide the extent of gains to be reaped by the GCC states from their WTO membership.

Gains also depend on the co-ordinated and unified collective action by the GCC states.

Steps must now be taken as part of a Gulf-wide agenda to establish a single team consisting of representatives of the GCC states and acting in co-ordination with the GCC General Secretariat.

The writer is a UAE economic expert.