Saudi-US trade volume exceeds SR2 Trillion in 10 years

Saudi-US trade volume exceeds SR2 Trillion in 10 years

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By Mishal Al-Otaibi
Saudi Gazette

RIYADH – The Ministry of Commerce and Investment said the volume of trade exchange between the Kingdom and the US in 2016 reached SR142 billion. Of this, the Saudi exports to the US reached SR65.6 billion while American exports reached SR75.8 billion.

It added that the Saudi-US volume of trade has exceeded SR2 trillion during the last decade. The balance of trade is in favor of the US by SR10.1 billion and the US stands second among the top ten countries importing from the Kingdom and the first place among the top ten countries exporting to the Kingdom during 2016.

Crude oil and its products and fertilizers (urea) top the list of the most important Saudi commodities exported to the US, apart from raw aluminum blends and ethylene glycol.
Meanwhile, the list of commodities imported from the US includes spare parts, aircraft engines and vehicles of all kinds.

The number of Saudi-American projects in the Kingdom has exceeded 588 companies. Of these, 123 are industrial companies and 436 are service companies (non-industrial).

Manufacturing industries, construction, administrative and support services, information and telecommunications form the lion’s share of US investment activities in the Kingdom with 373 projects, forming 63 percent of the joint ventures.

The number of branches of American companies in the Kingdom has reached 175. Meanwhile, mixed companies (Saudi-American joint ventures) have reached 436.

Within the sphere of partnerships and trade cooperation between the two countries, the Kingdom signed in late May 2016 a memorandum of understanding with GE for joint investments worth $3 billion in strategic sectors, within the Kingdom Vision 2030.

In the aviation field, in late Feb. 2016, both countries agreed to establish a Saudi company in partnership between Aviation Technology Company and an American company to develop, manufacture and produce multipurpose Black Hawk helicopters in the Kingdom, among other major projects.

These include the establishment of a Saudi company from Satellite Technology Company and the American “Digital Globe Company” for the manufacture and marketing of a number of small satellites specializing in surveillance through space imagery.

The Saudi-US strategic partnerships also included the establishment of Sadara Chemical Company.

Saudi-US volume of trade has exceeded SR2 trillion, during the last decade, a fact that reflects the solidness of commercial relations binding the two countries, since the late leaders King Abdul Aziz Bin Abdulrahman and President Franklin D. Roosevelt laid the foundations of this ongoing special relationship between the two countries since the historic meeting between the two leaders in 1945.

The roots of these relations go back to the discovery of oil in the Kingdom in 1933 by the American company – Standard Oil Company of California.

Custodian of the Two Holy Mosques King Salman’s landmark visit to the US, on Sept. 4, 2015, witnessed the declaration of the Strategic Partnership for the 21st  Century and the establishment of an office for permanent strategic cooperation, in order to consolidate bilateral relations between the two nations.

Then came the visit of Deputy Crown Prince Muhammad Bin Salman, on June 13, 2016, to lay emphasis on the profound strategic relations between the two countries, especially, in terms of enhancing commercial relations, promoting investment opportunities in the Kingdom, in tandem with the Kingdom Vision 2030, aiming, inter alia, to raise the rate of direct foreign investments (DFI) to the Saudi GDP from, the current rate of 3.8 percent to the internationally recognized rate of 5.7 percent.

The Kingdom and the US, in line with the trend, expressed interest in developing commerce and investment to best serve the two nations. Henceforth, they co-signed, in 2003, an accord to incept a joint council comprising representatives from the two countries and to be led by the Saudi Ministry of Commerce and Investment from the Saudi side and the Office of the United States Trade Representative (USTR), in addition to other representatives from government bodies.

The main goal of the council is to provide businessmen from the two countries with a formal umbrella and to overcome obstacles that might hinder fluidity of trade, from the two sides.

Up to now, the council, which is co-chaired by the two ministers of commerce, has held five sessions. The last one has taken place, in Riyadh, in Jan. 2017. It issued various recommendations, in regard to commerce, standards, measurements and quality, customs, investment, foods and drugs, consumer protection and intellectual property issues.

In parallel, there is the Saudi-US Business Council, founded in 1993, as a legal entity, in the US, and presided over by the former Head of Aramco Abdullah Jum’ah, to head the Saudi side. The council aims to revamp bilateral relations, in terms of economic, trade and investment relations between the private sector companies, in the two countries, in addition to organizing forums to explore business opportunities.

Various royal orders, in this regard, have been issued, regarding visit exchange, at ministerial level, annually, to exchange views and visions, in order to promote economic and political relations, as well, to best serve the interests of the two friendly nations.

Coordination is going on to organize commercial delegations’ visits, to explore investment opportunities, both in the Kingdom and the US, through a collaboration with the Council of Saudi Chambers of Commerce and Saudi-US Business Council.

Many royal orders have been issued on exchange of visits annually at the level of ministers between the Kingdom and the US. The objective of these visits is to exchange ideas and visions to develop the economic and political relations that serve the interests of the two countries.

Every year, there is coordination among many trade delegations in various specializations to visit the Kingdom and among the pertinent authorities and sectors. This is carried out in coordination with the Council of Saudi Chambers of Commerce and the Saudi-US Business Council. Aside from this, there is coordination among Saudi delegations to visit the US.

1 COMMENT

  1. why is there no focus on strategic technology like Electric vehicles? everywhere you look (major carmakers are developing EVs) by the time we adopt to this technology it would be too late. right now saudi have funds to develop and adopt this technology. this is linked to another strategic field we are slowly adopting, Solar Power generation, i heard saudi have solar projects but key focus should be development and manufacture of solar panels not buy and build solar plants.

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