The European Union (EU) launched in May the European Chamber of Commerce in the Gulf in Riyadh to broaden economic ties between the EU, Saudi Arabia, and the wider Gulf Co-operation Council (GCC) region.

The chamber of commerce will act as a platform to facilitate business collaboration, enhancing trade and investment between the EU and Saudi Arabia. It will advocate for trade policies by emphasising fairness, transparency, and non-discrimination, as well as create a favourable environment for European businesses, especially small and medium enterprises (SMEs), in Saudi Arabia and the broader Arabian Gulf area. 

The kingdom is presently the EU's primary trading partner among GCC nations, with annual bilateral trade in goods valued at EUR 75 billion, and EU investments in the country increasing by 50% since 2020, reaching EUR 30 billion in 2022. With EUR 175 billion in trade annually, the EU and the GCC maintain a robust trade relationship. The Gulf region is the EU's sixth largest export market and a significant source and destination of investment for EU member states.

TRADE AND INVESTMENT DESTINATION

As the only Arab country in the G20 and home to the biggest economy in the Middle East, Saudi Arabia is seen as a prized investment and trading opportunity by the EU. 

“To date, over 1,300 companies originating in the EU have invested in the kingdom. In 2022, European investment stocks amounted to EUR 30.8 billion, a great leap from the year before,” according to Christophe Farnaud, ambassador, delegation of the EU to Saudi Arabia, Bahrain, and Oman. 

“There is no doubt that the economy in KSA is growing and I would invite all European companies to see first-hand the opportunities that are being created. Saudi Arabia is therefore a most interesting partner for European companies. It has a vision and, in particular, the financial means to make things happen. For this reason, I am confident that Saudi Arabia is a good platform for companies that come here to invest and do business.

In 2022, a joint communication by the European Commission and the High Representative for Foreign Aairs and Security Policy highlighted the growing importance of a privileged trade and investment relationship between the EU, the GCC, and its members. The new chamber of commerce aims to enhance the trade and investment environment, foster regulatory and customs co-operation, and promote sustainable development.

The chamber aims to boost EU investment and trade in Saudi Arabia and the wider region in the areas of digital services, transportation, healthcare, maritime and energy transition, among others.

“The EU will also step up its co-operation with Gulf countries on climate action and clean energy transition by facilitating exchanges and partnerships on renewable energy (including renewable hydrogen), energy eciency including the Energy Eciency First principle, carbon capture utilisation and storage, carbon pricing and carbon markets, climate change adaptation, disaster risk reduction and resilience,” according to a communique.

TRADE WITH ITALY

Saudi Arabia is also building strong ties with EU countries. Last year, the kingdom and Italy recently solidified their economic ties by signing 21 agreements and memorandums of understanding during an investment forum held in Milan last September. These agreements aim to bolster trade and investment relations between the two countries.

One notable agreement was between Saudi ACWA Power and Italian energy giant Eni for a green hydrogen project in the Middle East and Africa. Saudi investment minister Khalid Al-Falih highlighted Italy's importance as a long-term partner in the energy and sustainability sectors. He mentioned Saudi Arabia's plans to invest in vital raw materials and collaborate with Italy on major hydrogen projects, such as the one in NEOM.

The Saudi-Italian Investment Forum, organised jointly by the Saudi Ministry of Investment and the Italian Ministry of Enterprises and Made in Italy, was attended by high-level ocials from both countries and representatives from various sectors. The agreements signed covered sectors such as energy, clean energy, healthcare, real estate, waste management, technology, and manufacturing, with the goal of promoting commercial co-operation and fostering industrial and investment ties.

The forum also explored investment opportunities in line with Saudi Arabia's economic transformation under Vision 2030. Adolfo Urso, minister of Italy’s Ministry of Enterprises and Made in Italy, said they were discussing with the kingdom potential investments in its 'Made in Italy' fund to strengthen strategic supply chains. Additionally, there were discussions about potential merger and acquisition deals in the energy sector between the two countries.

Bilateral trade between Saudi Arabia and Italy in 2022 amounted to USD 11 billion, underscoring the significance of their economic relationship.

The kingdom also signed deals and initial pacts worth USD 2.9 billion at the French-Saudi Investment Forum last year. The two sides signed 24 investment accords covering sectors such as clean energy, tourism, manufacturing, defence, health and education, according to Saudi's Ministry of Investment.