UAE won't take sides in trade war between US and China: Mansouri
Sultan bin Saeed Al Mansouri meets Mukhisa Kituyi, secretary-general of the UN Conference on Trade and Development, on the sidelines of the World Government Summit in Dubai on Monday.
Dubai - Al Mansouri alerted that the trade war between the world's top two economies will harm all of us.
The UAE should stay away from the trade war between the US and China and not take sides with anyone, said UAE Minister of Economy Sultan bin Saeed Al Mansouri.
While speaking at a panel discussion about the outlook on global trade at the World Government Summit on Monday, Al Mansouri alerted that the trade war between the world's top two economies will harm "all of us".
On Monday, a team of US negotiators reached China to resume trade talks in order to thrash out a deal before March 1. US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will join for the main event on Thursday and Friday.
Due to the trade wars, fears of protectionism has been growing globally, sparking a slowdown in the global economy and trade. US President Donald Trump has postponed tariffs on Chinese imports worth $200 billion to 25 per cent from 10 per cent to allow negotiators some time to thrash out a deal. The two sides have already slapped tariffs on more than $360 billion in two-way trade, hitting the two countries' manufacturing sectors.
Mark Matthews, managing director and head of Research Asia, Julius Bär, said Americans are actually asking the countries to choose the side in the trade row with China. "If push comes to shove, all the countries in Europe and Western democracies will choose the US. Some countries in Africa will pick China. I think, the Middle Eastern countries will side with the US based on the historic relations - arms sales, energy purchases etc," Matthews said.
He pointed out that the Gulf region will benefit from the trade war and Silk Route as both sides - the US and China - will try to win the region over.
"Both the side will try to be extra nice with the regional countries. But how these country respond, that is a tight rope to walk. If you get too close to the US, Chinese will not like that and vice-versa," Matthews told Khaleej Times during an interview.
For the Asian countries, it is a very strange situation because China is the largest trading partner with most of the Asian countries but the US sells them a lot more weapons.
"So which one is more important, it is difficult to say. But economy should be more important. In the long-term, most countries would choose China but not yet because they don't want to isolate themselves from the US because the US can make the life difficult through sanctions," Matthews added.
On Sunday, the IMF chief warned of a possible economic "storm" as growth forecasts dip due to trade war.
"We have no idea how it (the trade dispute) is going to pan out and what we know is that it is already beginning to have an effect on trade, on confidence and on markets," Christine Lagarde, managing director, IMF told the World Government Summit in Dubai.
Meanwhile, in March 2018, the US also imposed 25 per cent tariffs on imported steel and 10 per cent on aluminium products exported to the US from the UAE and other countries around the globe.
The UAE-based aluminium product manufacturing firm Gulf Extrusion's CEO Christian Witsch said in an interview that there was no impact of US sanctions as most of the exports remained focused to the European destinations.
"We are now exporting only small quantities to the US so the tariffs didn't have effect on us. Interestingly, after the imposition of tariffs, some companies from the US came to us for additional quantities. So the imposition of tariffs by the US is completely against the logic," Witsch said.
UK approaches for FTA
Moreover, Sultan Al Mansouri disclosed during the panel discussion that the UK had approached the UAE and other Gulf nations on free trade agreement in post-Brexit.
But he said that such agreements, generally, take many years to reach a deal. The UK is expected to quit European Union on March 29.
The UK was "looking forward" to a free-trade agreement with the Gulf Cooperation Council, Liam Fox, the UK state secretary for international trade, said during a visit to Dubai for the summit.
"We need to have a deeper strategic relationship. It should not only be about selling and buying but about being partners. We are looking forward to addressing the common problems and having collective solutions. We are looking forward to having effective partnerships in areas of InfoTech, AI and life sciences as well as making use of UK expertise in education, skills and vocational training," he said during the summit.