U.S. Chamber of Commerce Study Highlights Importance of Trade and Investment with United Arab Emirates
May 21, 2009On May 19, the U.S. Chamber of Commerce’s United States-United Arab Emirates (U.A.E.) Business Council released a report outlining the growth of trade between the two countries and highlighting future expectations for business partnerships amid the current economic downturn.
“The report is an important measure of the economic growth developing between our countries,” said Danny 
Sebright, president of the U.S.-U.A.E. Business Council. “It is just one of many signs that the growing partnership is of great importance to American companies and workers.”
The report, The U.S.-U.A.E. Trade and Investment Relationship: 2009 (PDF), was prepared by Professor Michael O. Moore, founding director of the Institute for International Economic Policy at the George Washington University’s Elliott School of International Affairs.
“This has been one of the fastest-growing U.S. economic partnerships in the world,” Moore stated. “The volume of U.S. exports and foreign direct investment into the U.A.E. in recent years has grown dramatically and far greater than the comparable figures for the world as a whole.”
Highlights of the report include the following:
- U.S. goods exports to the U.A.E. increased from $3.6 billion in 2002 to $15.7 billion in 2008. This represented a 338% increase compared to a 50% increase for U.S. goods exports for all countries during the same period. The U.A.E. has become the single largest export market for U.S. goods in the Middle East.
- U.S. goods exports to the U.A.E. originate from a wide variety of U.S. states. In 2008, the five largest sources were Washington (22%), Texas (13%), New York (11%), California (7%), and Florida (4%).
- U.S. foreign direct investment in the U.A.E. more than tripled from at least $1.1 billion in 2002 to $3.8 billion in 2007. This far exceeds a worldwide increase of U.S. outward foreign direct investment of 73%
in the same period and an increase of only 8.4% in Saudi Arabia.
- The pace of investments between the U.A.E. and the United States also is substantial. General Electric and Mubadala Development Company recently announced an $8 billion joint venture in high technology. Other examples of U.A.E. investments in the United States include a 90% share of the Chrysler Building, a 20% share in NASDAQ, a 7.5% share in the Carlyle Group, an 8.1% share in Advanced Micro Devices, and a 4.9% stake of Citigroup.
- Economic strains between the two countries are rare. There are however concerns in the United States that some U.A.E. commercial activity with Iran is allegedly in contravention of the U.S. sanctions regime.
- The U.A.E. government has intervened to help stabilize the economy that has been buffeted by collapsing oil prices, a worldwide credit crunch, and rapid deterioration in the Dubai financial and real estate sectors. These efforts include a $13.3 billion capital injection into the financial system and a $10 billion purchase by the U.A.E. central bank of Dubai issued bonds that will help ensure stability.
- The U.S. and the U.A.E. have also agreed in recent months to extend their cooperation in areas touched by security concerns. This includes a $3 billion contract in December 2008 with Raytheon and Lockheed Martin for the delivery of PAC-3 anti-missile systems to the U.A.E., the first-ever release of the THAAD system, and a pact for cooperation on peaceful nuclear energy development.
The report is part of the U.S.-U.A.E. Business Council’s effort to promote the bilateral trade relationship and raise awareness about American companies’ involvement in the U.A.E.
