UAE Reviewing Foreign Trade Policy to Reduce Escalating Non-oil Trade Deficit

ABU DHABI - The UAE is reviewing its foreign trade policy to evolve strategies to reduce its mounting deficit in non-oil foreign trade.

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Published: Fri 27 Mar 2009, 12:23 AM

Last updated: Thu 2 Apr 2015, 7:45 AM

This was disclosed here on Wednesday by Dr Mutar Ahmed Abdullah Al Ali, the Director of Trade Analysis and Information at the Ministry of Foreign Trade, while talking to the media after releasing the foreign trade figures for 2006 and 2007.

The UAE has trade relations with almost 180 countries across the globe, but its trade deficit has been growing from $36.5 billion in 2005 to $45.3 billion in 2006 and $ 61.0 billion in 2007. The figures for 2008 are being compiled and will be released later this year, Dr Mutar Ahmed Abdullah Al Ali said.

“This increase in trade deficit can be no surprise considering that the country depends on import for meeting about 70 per cent of its domestic consumption requirements, and this covers whole range of items starting from foodstuffs. Aluminium, petrochemical items, ceramics, plastics and glass dominate the non-oil exports from the UAE.’’

“The imports are bound to grow considering the spurt in domestic economy and the massive increase in population. For instance, there was about 16 per cent growth in the country’s GDP in 2008. The country had to step up import of various construction materials drastically in the recent years because of the fast pace of growth in the real estate sector and in other development projects’’.

“The import requirements will grow in the future also because of the various development projects that have been planned. So, the only option before us is to build up our export capabilities and import substitution possibilities. We have launched studies to identify the areas where we can build up exports and import substitution,’’ the director said.

The total foreign trade volume of the UAE grew by 33 per cent from $113.3 billion in 2006 to $150 billion in 2007. India continued to be the major trading partner of the UAE accounting for a trade volume of $13.2 billion in 2006 and $21.7 billion in 2007.

China with a trade volume of $8.9 billion in 2006 and $12.8 billion in 2007 occupied the second position while the US with $7 billion in 2006 and $8.2 billion in 2007 came third, he disclosed.

About 10 countries including India, China, US, Japan, Germany, Iran, Saudi Arabia, UK, Italy and Switzerland accounted for 56 per cent of the foreign trade volume of the UAE in 2006 and 57 per cent in 2007.

ramavarman@khaleejtimes.ae


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