Smart Non-Discrimination in Saudi Investment Policy:

Legal and Shari’ah Insights for WTO-Consistent Instruments for Domestic Value Creation and Economic Sovereignty

Saud H. Alharthi

Hajed A. Alotaibi

 

Abstract: This article examines Saudi Arabia's strategic approach to leverage the World Trade Organisation's (WTO) non-discrimination architecture, namely Most-Favoured-Nation (MFN) and National Treatment (NT), to advance its domestic value-creation objectives while maintaining compliance with international trade law. It analyses how Saudi policy design, particularly procurement-anchored localisation under the Government Tenders and Procurement Law (GTPL) and Local Content regulations, as well as flagship programs like Aramco's IKTVA, enables technology transfer and industrial diversification. This model is contrasted with the liberalisation-led vulnerabilities observed in Indonesia and with China's strategic, selective openness. A detailed compliance matrix is constructed to link each Saudi instrument to its relevant WTO legal basis or exception, such as the GATT III:8(a) procurement derogation and the general exceptions under GATT XX. The legal and operational efficacy of this framework is tested through five in-depth case studies. The findings culminate in the formalisation of a "Smart Non-Discrimination Toolkit," a set of origin-neutral, performance-based policy designs principally routed through public procurement and competition policy. This toolkit offers a replicable model that other developing economies can adapt to attract FDI and build industrial capacity without contravening WTO rules or undermining domestic SMEs. The article's contribution is thus twofold: it provides a doctrinal analysis by interpreting and mapping WTO legal bases, and an applied contribution through actionable design patterns, checklists, and measurable outcomes.