Dubai: Two new direct flights by Emirates and Etihad from the UAE to Japan's capital Tokyo are set to boost trade between the two countries, which traditionally have had strong relations.
"The direct flights will significantly boost trade and economic relations and contribute to broadening mutual understanding in various fields," Tatsuo Watanabe, Japanese Ambassador to the UAE, said in a statement marking both airlines' maiden flights this weekend.
The new flights "will surely enhance the two-way flow of businessmen and tourists from both countries," he added.
Japan is one of the biggest export markets for the UAE before South Korea and India, mostly for crude oil, gas and aluminium.
The UAE exports 62 per cent of its crude oil to Japan, making it the UAE's largest customer, according to figures provided by the UAE government.
Gas exports are almost entirely to Japan, the world's largest buyer of liquefied gas, with the UAE supplying almost one-eighth of Japan's requirements, government figures say.
Trade data
According to the latest numbers by the Dubai office of the Japan External Trade Organisation (Jetro), goods worth $22.727 billion (Dh83.45 billion) were exported from the UAE to Japan in 2009.
However, exports dropped 51 per cent compared to 2008 due to the impact of the global financial crisis.
The UAE imported goods worth $6.497 billion from Japan, mostly cars, machinery, electronic goods, petrochemicals and iron.
Japan's most popular export items to the UAE are cars, lead by Toyota, and car parts, with this sector contributing of 45 to 50 per cent to the trade volume, according to Jetro.
UAE imports from Jap-an dropped 39.8 per cent in 2009, Jetro data shows. "This is mainly due to the reason that dealers sold off their stock, especially cars, before Ramadan 2009 in the wake of the economic crisis," Kotaro Kodama, executive director of Jetro Dubai, told Gulf News.
"After Ramadan, business slowly picked up again and we hope that this year will show growing figures but this will depend on the speed of global recovery."
Exports
A large part of Japanese goods reaches the UAE for re-export, but Jetro does not reveal detailed figures. "This is a matter for Dubai customs," says Kodama. Japanese goods are re-exported to countries in Central Asia and Africa, he added.
Overall, trade between the two countries reached $29.21 billion in 2009.
In January, Japanese exports to the UAE indeed seemed to be on the recovery path, with a rise of 45 per cent to $2.49 billion in the first month of this year.
According to Kodama, around 360 Japanese companies are doing business in the UAE, starting from big enterprises in the electronic goods, car, machinery and banking sector to smaller entities.
One of the latest additions was Saiga, the largest manufacturer of heavy industrial machinery in Japan, which opened a branch in the Jebel Ali Free Zone last year.
Among Japan's leading financial institutions, Nomura, Japan's banking giant, took over the Lehman Brothers subsidiary in Dubai's DIFC in October 2008 in a much-noticed deal and was later granted a DIFC trading licence.
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