JAMES B. SMITH
Wednesday 20 March 2013
Last Update 20 March 2013 1:09 am
FOR over 80 years the United States and the Kingdom of Saudi Arabia have enjoyed a strong relationship based on mutual respect and common interests. Diplomatic relations were established in 1933. That same year Standard Oil of California signed an oil concession agreement with Saudi Arabia. That initial partnership, of course, developed into the largest oil company in the world in terms of crude oil production and exports; Saudi Aramco.
As Secretary Kerry’s recent visit shows, our close relationship continues to today. The United States and Saudi Arabia share a common concern for regional security and stabilizing the global oil markets. We also share a charitable impulse to aid the less fortunate, as our foreign assistance efforts, both public and private, demonstrate. Two key pillars of our relationship are economics and commerce. Trade, investment, education, and tourism all help deepen the relationship between our two countries, because they are not just about government to government relationships, but about people to people relationships.
The US-Saudi trade relationship has grown considerably over the past few years with our total two-way trade last year reaching almost $ 74 billion. In President Obama’s 2010 State of the Union address, he set an ambitious goal of doubling US exports from their level in 2009. We are well on our way toward achieving that goal with Saudi Arabia, with the value of US non-defense exports to Saudi Arabia increasing by almost 68 percent. From Saudi Arabia’s perspective, Saudi exports to the United States have more than doubled during the same period. Our services trade also continues to expand. In 2010, the most recent year for which statistics are available, the US exported over $ 5 billion in education, business, and professional consulting services to Saudi Arabia.
As might be expected, oil remains an important part of our bilateral economic relationship. With Saudi Arabia exporting between a million and a million and a half barrels per day to the United States, it is by far Saudi’s largest export to our country; just as our largest non-defense export to Saudi Arabia remains motor vehicles. However, our relationship has developed far beyond oil and automobiles. Saudi Arabia is an important market for US aircraft, chemicals, machinery, agriculture, and computer products. In addition to oil, some of our largest imports from Saudi Arabia include chemicals, metals and textiles. Another measure of how much our bilateral trade relationship is growing is the number of new US exporters to Saudi Arabia. Last year over 150 companies entered the Saudi market for the first time.
Our relationship is more than just trade, it is a partnership. Saudi Arabia and the United States are also major investors. The Motiva Refinery in Port Arthur Texas, a joint venture between Shell and Saudi Aramco, has the largest crude oil processing capacity of any refinery in the United States and last year completed a major five year expansion project. Last year, the US Export Import Bank signed its largest direct loan, at just under $ 5 billion for the Sadara chemical company, a joint venture between Aramco and Dow Chemical that will create thousands of jobs in both our countries. On 12/12/12, only three years after signing their joint venture, Ma’aden and Alcoa produced their first hot metal from an aluminum plant that will produce the lowest cost aluminum anywhere in Alcoa’s worldwide system. Not only that, but the joint venture just broke ground on an aluminum rolling mill that will produce parts both for export and for Saudi Arabia’s developing automotive industry, which will create more jobs here and in the United States.
In addition to trade and investment, we are also seeing increased travel from Saudi Arabia to the United States, whether for tourism, business, education, or medical treatment. The United States is host to almost half of all Saudis studying abroad, helping fulfill King Abdullah’s vision of creating a knowledge economy. Last year almost 132,000 Saudis applied for visas to visit the United States, a fifteen percent increase on the year before. Saudis studying in or visiting the United States are able to learn more about our country and share more about their country.
Looking forward, there are more opportunities for US businesses to help contribute to economic growth, job creation, and diversification in both our countries.
- and Oil wells will be game changing plus- :smoking:-
