Saudi Arabia’s Free Zone Tariff Exclusions Signal Widening Rift

Saudi Arabia said it would exclude imports from free zones or linked to Israel from a preferential tariff agreement with neighboring Gulf Arab countries, signaling growing strains in relations with the United Arab Emirates which has normalized relations with the Jewish State.

According to a ministerial decree published Saturday in the Saudi official gazette Umm al-Qura, products coming out of free zones across the six-member Gulf Cooperation Council will be handled as if they were foreign imports. The decree also stipulates that goods using inputs from Israel, or from firms partially or fully owned by Israeli companies, would not benefit from reduced duties aimed at facilitating intra-regional trade.