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UAE exports to Europe slacken after China's abolition of tarrifs
DUBAI - The recent abolition of a series of tariff and non-tariff barriers in giant emerging markets such as China has stunted the "quantitative progress" of UAE exports to Spain and eroded its reputation as a re-export hub to European countries.
- PUBLISHED: Wed 23 Jan 2008, 9:16 AM UPDATED: Sun 5 Apr 2015, 12:35 PM
- By:
- Jose Franco
"Those developments have enabled Asian countries to deal with their own exports to the West without relying upon re-export centres or other intermediaries," according to an analyst from the Spanish Economic and Commercial Office, in Dubai.
The source also cited the Multi-Fibre Agreement (MFA), which governs the world trade on textile and garments, as having given emerging markets a higher degree of independence to export their products directly to Europe.
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Also known as the Agreement on Textile and Clothing, MFA imposes quotas on the amount that developing countries, which have the advantage on textile production because of their low labour costs, may export to industrialised countries.
Data released by the Spanish office show that UAE exports to Spain dropped Dh393 million ($107 million) for the first nine months of 2007 from Dh459.1 million ($125 million) a year earlier.
"Spain does not rely on Emirati hydrocarbon, which is the highest-performing UAE export product," the analyst said, adding that Spanish imports from the UAE consist mainly of aluminium and its related products, mechanical artefacts and organic chemicals.
Spain's exports to the UAE had increased, however, reaching Dh4.8 billion ($1.3 billion) from January to September 2007 from Dh4.41 billion ($1.2 billion). There were mostly apparel, iron and steel and related products, electromechanical items and accessories.
The Association of Spanish Franchisers (AEF), meanwhile, said that 10 Spanish fashion franchises with 45 stores were operating in the UAE as of end-2007, making the country as Spain's second-largest Middle East market for franchising after Saudi Arabia's 13 firms with 92 stores.
The biggest Spanish fashion house conglomerate operating in the region is Inditex, whose international firms include Zara, Mango and Massimo Dutti, although it is not well known in the region.
"The absence of a clear identity does not allow the general customer to perceive the vigorous performance of Spanish franchises in the Middle East," according to an Inditex representative. But the Spanish commercial office here said the UAE remains a very important market for Spain because of the booming economy, a fast growing population, and the rise in tourism and construction projects.