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(photo credit: CNN)
In a move meant to pave the way for its entry into the World Trade Organization (WTO), Saudi Arabia on Tuesday cancelled its economic embargo against Israel, itself a WTO member state.
Under the bylaws of the WTO charter, no member nation may impose an economic embargo on another member state. As a member of the Arab League, Saudi Arabia participated in a joint embargo on Israel for many years, despite its desire to enter the organization. During 12 years of negotiations with the WTO, the Arab nation refused to lift its embargo against Israel - until today.
The Industry, Trade, and Labor Ministry said that in the near future a number of major international electronic, automotive, and foodstuff companies will begin business relationships with Israeli firms as a result of the lifting of the embargo. A spokesperson of the ministry stressed that although the embargo's effects as of late were minimal, the move still represented a major step that would encourage international investment in Israel and increase its exports.
The lifting of the embargo also suggested that Israel and Saudi Arabia would commence business and trade relations.
Head of the foreign trade wing of the Industry, Trade, and Labor Ministry Yair Shiran said that the Saudi decision set an especially important precedent, considering the fact that a number of Arab nations were in the process of acquiring WTO themselves. Any Arab nation wishing to become a WTO member country would unequivocally be required to forego the Arab League's embargo of Israel.
The Saudi decision was the result of its renewed dialogue with the United States in order to gain acceptance into the organization. As part of the newly improved US-Saudi relations, a joint committee was to be formed consisting of both Saudi and American representatives, including US Secretary of State Condoleezza Rice. The committee will convene to discuss military and terror-related issues, as well as economic and energy matters.
Next month Saudi Arabia will be formally accepted into the organization. WTO Director-General Pascal Lamy welcomed Saudi Arabia's entrance, saying, "Today's decision is a historic event for the WTO."