UAE Country Commercial Guide 2012 - Export.gov

Return to table of contents
Chapter 1: Doing Business in the United Arab Emirates
• Market Overview
• Market Challenges
• Market Opportunities
• Market Entry Strategy
Market Overview Return to top
The United Arab Emirates (UAE) represents a major market for U.S. exports and serves as an
important regional hub for American companies conducting business throughout the Middle East,
Africa and South Asia. Owing to rapid expansion of bilateral trade in recent years, the UAE has
overtaken Saudi Arabia as the largest market for American products in the Middle East. In 2011,
U.S. exports to the UAE totaled $15.9 billion, an increase of 36% over the previous year’s levels.
UAE sales to the United States increased by 113% last year, reaching $2.4 billion. For the first
quarter of 2012, American exports to the USA have increased by an additional 75%.
Leading export sectors for American firms include commercial aircraft, power generating equipment,
defense equipment, transportation and infrastructure related goods and services. Demand for
imported goods is currently being fueled by a number of factors, including a rapidly expanding UAE
civil aviation sector; implementation of major infrastructure and transportation projects; as well as oil
and gas industry modernization and expansion.
Oil and gas production remains critical to the UAE economy, contributing about one-third of GDP
and generating $75 billion in UAE exports last year. The industry is set for expansion as the UAE
seeks to increase daily production from approximately 2.5 million to 3.5 million barrels a day within
the next five years. Major downstream projects are also planned. American firms are major players
in new onshore and offshore projects currently being implemented, including the $10 billion Shah
Gas Filed project and modernization of production at the Upper Zakum offshore field where daily
production of 750,000 barrels of oil is targeted. U.S. companies are also vying for a major onshore
petroleum concession that expires after 75 years and is to be renewed in 2014.
Despite the continued importance of the petroleum sector, the UAE is aggressively seeking to
diversity its economy and develop new industrial and commercial sectors. The UAE has already
become a major international producer of aluminum and has also begun ventures in the aviation and
defense sectors.
Reflecting the country’s role as a major regional commercial center, a significant portion of the UAE’s
import volume is ultimately re-exported. Dubai in particular plays a central role as a regional trade
facilitation, logistics and tourism hub. Still, Dubai continues to grapple with large debt burdens
(thought to exceed $100 billion for state-owned entities) and an over-supply of housing and office
space. However, the past year has seen strong trade and tourism performance as political
developments associated with the so-called “Arab Spring” have resulted in high occupancy rates in
Dubai hotels as many tourists and business travelers shy away for other traditional, regional
destinations.
Market Challenges Return to top