UAE trade minister describes bilateral commerce at Baker Institute talk

BY FRANZ BROTZEN
Rice News staff

The United Arab Emirates is uniquely situated for international commerce, the U.A.E.’s minister for foreign trade told an audience at the James A. Baker III Institute for Public Policy June 17.

	GEORGE WONG
	Speaking at the Baker Institute, Sheikha Lubna bint Khalid bin Sultan Al Qasimi, United Arab Emirates minister for foreign trade, said the U.A.E.’s location — “sitting between East and West” — provides her country with its competitve advantage.

“When you come to the U.A.E., you’re pretty much selling to the whole region because of the representation from throughout the community,” said Sheikha Lubna bint Khalid bin Sultan Al Qasimi, pointing to the proximity to India and African nations, as well as the Middle East and fellow members of the Gulf Cooperation Council (GCC). The U.A.E. is the third-largest re-exporter of products after Hong Kong and Singapore, she said.

Introducing Lubna as the first woman to hold a cabinet-level position in the U.A.E., Edward Djerejian, the founding director of the Baker Institute, noted that the U.A.E. has “become a significant hub for global finance and trade.” And Texas, Djerejian added, “happens to be one of the U.A.E.’s top trading partners.”

In fact, Lubna said, $2.8 billion of the $12 billion in U.S.-U.A.E. trade in 2008 came from Texas. She estimated that 24,500 local jobs are related to Texas’ exports to the U.A.E. In fact, overall trade between the U.A.E. and the United States exceeds U.S. trade with either Saudi Arabia or Israel, she said.

And surprisingly, that trade is not limited to the energy sector. While 45 percent of the U.A.E.’s export revenue comes from crude oil, none of that goes to the United States, Lubna said. (It goes east, to Japan, South Korea and other Asian markets.) Instead, U.A.E. trade with the U.S. is centered on the military, medical, transportation, pharmaceutical and ceramic industries, she said.

Turning to the global economic downturn of 2008, Lubna acknowledged that “the U.A.E. was not immune.” The country’s gross domestic product dropped by nearly 4 percent in 2009, according to the CIA’s World Factbook. But Lubna said the U.A.E. government responded quickly to the crisis; it injected $33 billion to secure the value of people’s investments and launched a stimulus measure to develop the nation’s infrastructure.

The U.A.E.’s recovery was also helped by the fact that like most GCC countries, it had accumulated a sizeable budget surplus in recent years, so its response to the downturn did not plunge the government’s finances into the red, Lubna explained. Moreover, the diversification of the U.A.E.’s economy — as well as its investment portfolio — cushioned the blow, she said.

But it is the U.A.E.’s location — “sitting between East and West,” Lubna said — that provides her country with its competitive advantage.