It might be surprising to learn that the UAE is the United States’ number one export partner in the Middle East, even out-importing neighbouring Saudi Arabia, which is a larger economy. The $22.5-billion plus (around Dh82.6 billion plus) of American goods readily accepted into the UAE during the last financial year comprise more than 8 per cent of all imported goods from around the world. And early signs from the current year augur well. Trade with the US is simply “booming”, Michael H. Corbin, Ambassador of the US in the UAE, tells GN Focus. His words are underscored by recently released trade figures detailing economic activity between the two countries in the first four months of this year.
“When we look at the numbers, there is a 42 per cent increase over last year [2012], which was previously a 40 per cent increase over the year before [2011], so trade from the US to the UAE is extremely positive,” he says.
Five-fold growth
To put current trade figures in perspective, two-way trade in 2012 reached $24.8 billion. Ten years ago, that figure stood at a meagre $4.5 billion, according to US government data. And so far this year, US exports to the UAE have reached more than $9.7 billion in January ($2.3 billion), February ($2.2 billion), March ($2.9 billion) and April ($2.1 billion) — up from $6.8 billion last year. Imports in the other direction total more than $1 billion — up from $793 million.
Onlookers will immediately point to the expansive aviation ties the two countries share as the main plank of mega-dollar trade. Indeed, commercial airline services between the UAE and the US is the fastest-growing bilateral aviation relationship in the world. And given the UAE’s supersonic emergence as the aviation crossroads of the world, with Emirates — the world’s largest operator of Chicago-based Boeing aircraft — currently awaiting the delivery (2015) of 50 Boeing aircraft worth an estimated $26 billion, the point is valid.
According to a report published by the UAE-US Business Council titled US-UAE Commercial Aviation: Taking Flight, Emirates and Eithad Airways ploughed more than $16 billion into the American economy in 2012 through commercial aircraft and parts procurement. Coupled with the initiation of multiple new flight paths into and out of major US cities, the UAE’s aviation investments also supported nigh on 100,000 jobs, the report stated. In the first four months of 2013, aviation-related trade totalled more than $2 billion, accounting for more than a quarter of overall trade (27 per cent).
Motoring and defence
But it’s not just the aviation industry that is propelling relations sky high. The motor vehicle sector is also a key driver of bilateral trade, with iconic car brands such as Ford, Chevrolet and Chrysler revelling in the UAE’s penchant for all things petrol-fuelled, racy and American. More than $1.1 billion worth of trade in the UAE stemmed from American vehicle companies in the first two months of 2013 — a 14.9 per cent increase from the $730 million recorded in 2012, according to figures compiled by the US Embassy.
“Al Tayer, [Ford’s] partner here, has done a great job in building the brand in the past ten years and we’re seeing an increasingly younger demographic coming in for the types of vehicle we’re offering,” says Larry Prein, Managing Director of Ford Middle East.
With road safety being a key concern for commercial and regular drivers in the UAE, the much-lauded security and proven track record of American car companies are what set companies such as Ford above other manufactures, Prein says. And the higher disposable incomes in the UAE “play a big part” in the success of American car companies in the UAE, Prein adds. “About 20 per cent of the industry is luxury, which is also the highest in the region.”
UAE residents are very proud car owners. Not only have American car manufacturers benefited from a curiosity and infatuation with historic car brands, but automotive maintenance companies have espied notable opportunities to support the industry. Shining Monkey, a US-based car care products company, has done just that, says David Jerromes, Middle East North Africa (Mena) Sales Director.
“The US is home to the first mass-produced car and as we have noted that the car is such an important part of everyday lives in the UAE, we’re benefiting from the very knowledgeable and passionate UAE motoring society, which loves nothing more than to proudly display their gleaming rides to friends and fellow motorists.”
Turning to matters of homeland security, the 1994 defence cooperation agreement between the UAE and the US has been ratcheted up significantly in the past 12 months. At the end of April, US Secretary of Defence, Chuck Hagel confirmed the UAE was taking on 25 US-made F-16 Desert Falcon Jets — worth an estimated $5 billion.
The major defence deal also includes the option for the UAE to purchase stand-off weapons (arms that can engage the enemy with greater precision at greater distances), which would see the UAE in possession of the most advanced artillery the country has ever had.
Aside from headline-grabbing air and ballistic missile defence systems agreed on by the two countries, there’s a whole other, unsung side of the UAE-US relations that goes unnoticed, but is worthy of mention, says Corbin, who is entering the third and final year of his tenure in the UAE.
“Other franchises are opening up here regularly. We see US products across the board — not just in civil aviation and defence, but in alternative energy, medicine, health care and technology. Google, Facebook and Yahoo are all thriving here as they open up to the Arab world. [A lot of] small franchises are doing very well,” he says.
American enterprises
In fact, American enterprises have long been a constituent part of the UAE’s business milieu, before conglomerates such as Bloomingdales and Starbucks set up camp on the Arabian Peninsula.
A history of unrivalled service professionalism and the ability to mine and use data in sophisticated marketing approaches are key reasons American companies have been successful in the UAE since the early 1970s, says Jihad Solaiman, CEO, U.S.A. Regional Trade Centre (USARTC) Sharjah — a private-public partnership between the government of Sharjah and SS General Trading, a division of Nasco. >
“We’re always focused on bringing small and medium-sized enterprises (SMEs) into the area for expansion to promote US business,” he says, noting that many [US] industries have contributed to the success of the UAE as a regional business hub, and we look forward to continuing to grow, change and drive the regional market in a variety of industries.
One such US-based company that has been trading with the UAE since the inception of the country is the interior furniture company Karges, which first commenced trade relations following the interested Gulf residents who began travelling, studying and working in the West.
“We have seen a steady correlation in the increase in economic diversification with the rising prominence of our brand in the region. As the region developed, Karges Furniture entered the market first through Mena residents purchasing from our US showrooms and word-of-mouth promoting in family homes in the area,” says Oussama Ismail, a Sales Executive at Karges Furniture Middle East.
After an online presence, Karges set up a store in the USARTC in Sharjah and have witnessed a swift uptake in its brand with more Emiratis and expatriates choosing to decorate their homes with the US-made furniture.
There’s no doubting that young or old, air-bound or living room-dwelling, edible or fashionable, American companies are assiduously absorbed by the zeitgeist of the UAE. And with a multitude of new infrastructure coming online in the Emirates in the near future, the outlook for trading with their American brothers in arms, is bright. n
