Talks explore credit facilities for better trade equations

Dubai: The Export-Import Bank (Ex-Im), a US government export credit agency, will help finance exports of US goods and services to the UAE as per an insurance policy, Bijan Kian, senior Ex-Im Bank board member said yesterday.

The international financial crisis has made it difficult for companies to secure financing for goods to trade. By providing companies with credit facilities, the US can increase demand for its goods in the UAE.

On the sidelines of a meeting on US-UAE Export Finance Matchmaking, organised by the Dubai Economic Council, Kian told the media: "The US Ex-Im Bank will help [with] credit facilities to US exporters by guaranteeing the payment to financial institutions."

"Of course, we have that option for short, medium and long-term coverage as insurance policies would be given to financial institutions to encourage lending. Also we offer a conditional guarantee to banks to continue lending."

Direct credit

He said that export credit insurance enables US exporters to offer short and medium-term credit directly to the customers.

Moreover, export credit is a substitute for cash advances, letters of credit and costly local bank financing, Kian added. He said they have longstanding relations with the UAE with a total exposure of $3.3 billion in 2009.

Richard Olson, US Ambassador to the UAE, said one of the main supporting elements in the US national exporting initiative was to facilitate "improved access to credit with a focus on small and medium sized businesses that want to export."

In January, US President Obama announced the National Export Initiative, a programme to double US exports in the next five years.

This initiative aims to grow the US economy and create two million job opportunities through trade as well as to allow US products to compete in the global market.

He added: "The US and the UAE have maintained a successful relationship at many levels. Moreover, the export volume grew six-fold in a decade and in 2009 the UAE was the largest Middle East export market for the US with $12 billion."

Olson said that Dubai is a trade gateway to the world and it can play a crucial role in achieving the goal of the Obama administration's initiative by expanding the markets where the US already enjoys strong growth.

"Sure, there would be no better example of such a market than the UAE," he added.

The session was attended by Shaikh Ahmad Bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority and Chairman and Chief Executive of Emirates Airline and Group, and Juma Al Majid, chairman of the Dubai Economic Council and other officials.

Dynamic role

Al Majid said: "In such a stressful economic situation Dubai's business community is looking for the dynamic role of the US financial institutions and certainly Ex-Im Bank in extending credit facilities to the small and medium businesses in Dubai.

"Assistance in financing US exports would be a key element in enhancing the business relationships."

Since the UAE is an open market and Dubai an international trading city Al Majid opposed moves by the US to control trade to countries that it has targeted with restrictions.

"The US should not sell products and then impose restrictions on exports to Iran, Iraq or Pakistan. The US should not sell such products to merchants, they should keep them in their market," he said.

He added that Iran and Iraq are good markets for UAE merchants and they cannot stop dealing with them.

However, Olson added: "There are sanctions against Iran and what we are doing is a level of compliance with the laws. It is similar to any other rule set by the United States Congress.

"The US Department of Treasury keeps a very keen eye on the matter and we do have a list of companies that are restricted to export its products to certain countries," he said.