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[2008-02-19] The UAE trades up
The formation of a new Ministry of Foreign Trade in the cabinet reshuffle sends a strong signal that the UAE is placing a very high priority on developing the economy to the next stage of evolution.
Whilst the precise remit of the ministry is yet to be defined it is likely to be wide ranging. Headed by the dynamic former minister of the economy, Shaikha Lubna Al Qasimi the new ministry has a number of challenges to confront in order to grow Foreign Direct Investment (FDI) and maintain economic momentum.
Key to this will be reviving the current stalled talks surrounding the UAE-US Free Trade Agreement. Resolving the pending issues would provide a significant boost to current trade levels. However negotiations remain subject to the US Congress renewing the Trade Promotion Authority. The US exported nearly $12 billion in goods and services to the UAE in 2006 — making it the largest export market in the Middle East. UAE trade with the US was in excess of $13 billion in the same period.
Beyond that the UAE is channelling major international investment thorough Sovereign Wealth Funds that are collectively becoming the subject of increased international scrutiny. The new ministry has the opportunity to lead in this area by ensuring greater transparency and perhaps creating a set of voluntary guidelines that will ease reservations in the case of sensitive investments, particularly in the US.
