UAE-US RELATIONS: Economic Relations

The UAE has one of the most open economies in the world. The country is the largest export market for the United States in the Middle East and 19th in the world, ahead of India, Singapore and Indonesia.

A Leading Global Energy Supplier
The UAE has ten percent of the total world supply of proven crude oil reserves and the world’s fifth largest natural gas reserves, making the UAE a key player in global energy supply. While critical to the economy, oil exports account for only about 30 percent of total gross domestic product.

Diversification Creates Trade Opportunities
The UAE launched a diversification and liberalization program to reduce reliance on oil and transform its economy from a conventional, labor-intensive economy to one based on knowledge, technology and skilled labor. The federal and individual Emirate governments have invested heavily in sectors such as aluminum production, tourism, aviation, re-export commerce and telecommunications.

Dependable and Substantial Partners
The UAE and the US enjoy a strong commercial and trade relationship.

• UAE customers purchased more than $11.9 billion in US goods in 2006.  
• Over the same period, UAE exports to the United States rose by 42 percent, from $971.7 million in 2000 to $1.385 billion in 2006.
• While the UAE exports almost no oil or gas to the United States, US companies are heavily involved as partners and suppliers to UAE energy companies.
• UAE investment has been a dependable and long-term engine of growth for the United States. For 30 years, the UAE has generated most oil revenues from sales to Asia, then invested most profits in the US economy.
• The UAE pegs its currency, the dhiram, to the dollar.
• More than 750 US firms have a presence in UAE, from Bechtel and ExxonMobil to Starbucks and Cold Stone Creamery.

Free Trade Agreement and TIFA-Plus
The United States and the UAE have been engaged since 2005 in trade discussions aimed at eventually reaching a bilateral Free Trade Agreement (FTA). Currently, Trade and Investment Framework Agreement (TIFA) Plus talks are underway to capture progress from FTA discussions. FTA is on hold until Congress reauthorizes fast track authority.

US-UAE Business Council
Outside the FTA negotiations, the UAE and the US continue to explore ways to enhance and build upon an already robust trade relationship. The establishment of a US-UAE Business Council, affiliated with the US Chamber of Commerce in May 2007 demonstrates one, business-to-business element driving an expansion of the commercial relationship.

While the UAE expects to see an improved trade balance with the United States as the economies of Abu Dhabi and Dubai continue to diversify, it is enthusiastic about advancing the many new joint ventures and partnerships it has in place with major American companies. From a UAE perspective, constructive international partnerships and joint ventures can provide capacity and skills for the local economy, in addition to the traditional benefits of investment.