Innovation, Investment—Not Market Access Barriers—Must Be Pillars for U.S.–Saudi Relationship

As the White House, government officials and businesses prepare for next week’s Washington visit of Saudi Arabia Crown Prince Mohammad bin Salman, manufacturers across America are calling upon the Saudi government to address a range of outstanding issues that are frustrating manufacturers seeking to export and grow in that market, activities that support good, high-paying jobs here at home.

The United States is Saudi Arabia’s second-largest trading partner, with nearly $35 billion in trade in 2016. In turn, Saudi Arabia is one of the United States’ largest and most important trading partners in the Middle East and the destination for more than $10 billion in investment across a range of business sectors.

Yet, manufacturers are urging the administration and others to raise outstanding commercial issues they face in Saudi Arabia that undermine that partnership and send the wrong signals about Saudi Arabia’s investment environment. Recent decisions by the Saudi Food and Drug Authority to promote local pharmaceutical manufacturing at the expense of U.S. products, for example, undermine Saudi Arabia’s attempts to promote innovation and transform its economy and raise questions about their compliance with both Saudi law and Saudi Arabia’s obligations under the World Trade Organization—questions that are important to a broad range of manufacturers, not just impacted industries.

Manufacturers also face other challenges in Saudi Arabia that directly impact manufacturing exports, such as problematic technical rules in areas from food to product testing as well as revised Saudi regulations that effectively exclude many international standards developed in the United States.

Removing these barriers and recommitting to a pro-business, pro-innovation investment environment must be a priority for these discussions. Manufacturers urge the crown prince and other members of his delegation to work within senior levels of their government to address these concerns and avoid similar steps in the future. These steps are an important part of affirming Saudi Arabia’s continued partnership with the United States.

Ryan Ong

Ryan Ong

Ryan Ong is the Director for International Business Policy at the National Association of Manufacturers (NAM), where he works with NAM member companies to develop and advocate the association’s positions and priorities on intellectual property, standards and regulatory concerns, and investment policy issues, as well as issues in China and India. Mr. Ong has on-the-ground experience on many of these issues in previous stints at the US-China Business Council and the Duke University's Center on Globalization, Governance & Competitiveness.
Ryan Ong

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