UAE-US Economic Relationship
The United States and the UAE enjoy a robust trade and investment relationship, much of which now has little direct relationship to UAE oil exports. This is one of the fastest growing US economic partnerships, both globally and especially in the Gulf region.
The UAE has one of the most open economies in the world. And its vigorous economic partnership with the United States reflects the UAE’s role as a regional leader in terms of economic reform, openness to international trade and investment, and political stability.
Partners in a Globalized World
The volume of US exports and foreign direct investment into the UAE in recent years has grown dramatically and is likely to continue to grow in the future. This growth reflects the increasingly diversified UAE economy as well as the country's leading role as a modernizing influence in the Arab world.
- The country is the largest export market for the United States in the Arab World and, in 2008, was the 20th largest export market globally, ahead of Spain, Ireland and Indonesia.
- The UAE buys products from every state in the United States.
- UAE customers purchased $14.4 billion in US goods in 2008.
- UAE exports to the United States rose by 38 percent between 2000 and 2007, from $971.7 million to $1.339 billion.
- The UAE pegs its currency, the dirham, to the dollar.
- More than 750 US firms have a presence in UAE, from Bechtel and ExxonMobil to Starbucks and Cold Stone Creamery
High Value Trade and Investment
The trade relationship between the UAE and the United States is characterized by a set of high-value trade and investment activities.
- In January 2008, Jafza International of Dubai announced its intention to establish a new warehouse and transportation hub in Orangeburg, South Carolina. The “greenfield” facility reportedly would involve a $600 million dollar investment in a location with high unemployment and create as many as 5,000 new jobs.
- In March 2009 AMD completed a deal with Advanced Technology Investment Company of Abu Dhabi to create GLOBALFOUNDRIES, a U.S.-headquartered semiconductor manufacturing company that will combine advanced process technology, industry-leading manufacturing facilities and expanded global capacity, including a new, $4.6 billion semiconductor fabrication plant in Upstate New York.
- In December 2007, Dubai World, an investment arm of the Dubai government, purchased 5 million shares of MGM Mirage, increasing its share of the company to 6.5 percent.
- In November 2007, Emirates Airlines detailed plans to buy 12 Boeing 777s worth approximately $3.2 billion. This order, along with previous sales, means that Boeing will, on average, deliver one airplane a month to Emirates Airlines for at least the next four years.
- In November 2007, the Abu Dhabi Investment Authority announced a critical $7.5 billion dollar capital infusion into Citigroup. This will result in a 4.9 percent share in Citigroup, which had recently faced financial difficulties associated with subprime mortgage problems.
UAE investment has been a dependable and long-term source of growth for the United States, injecting capital, expanding market access and contributing to mutual prosperity.
In March 2008, the Government of Abu Dhabi initiated a global dialogue to clarify the investment principles of government-owned funds. This International Working Group of Sovereign Wealth Funds (IWG), which included the US Treasury, finalized the “Santiago Principles” and presented them to the International Monetary Fund. In October 2008, 23 countries committed to operate their funds purely on commercial principles. And, as part of this commitment, the funds would adopt critical transparency measures.
UAE as Global Energy Supplier
In addition to being an important supplier of energy, the UAE is now becoming an increasingly relevant consumer of energy. The UAE will continue its long tradition of responsible energy stewardship as it diversifies its economy, expands hydrocarbon reserves, and contributes to the development of alternative energy sources.
- Abu Dhabi was the only OPEC member not to nationalize the holdings of foreign investors in the mid-1970s. Today international oil companies from the United States, Japan, France, Britain and other countries continue to hold combined equity stakes of between 40 and 100 percent in Abu Dhabi’s vast oil concessions.
- US companies are heavily involved as partners and suppliers to UAE energy companies.
Free Trade Agreement
Talks began on a UAE-US Free Trade Agreement (FTA) but ended when Congress needed to reauthorize fast-track authority.
US-UAE Business Council
The UAE and the United States continue to explore ways to enhance and build upon an already robust trade relationship. The establishment in May 2007 of a US-UAE Business Council, demonstrates how business-to-business initiatives drive the expanding 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 US 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.
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