His Excellency Sultan bin Saeed Al Mansouri, Minister of Economy, has called upon regional trade blocs around the world to contribute positively towards the promotion of trade and investment. Speaking at a session on ‘Emergence of New Mega-Trading Blocks and their Impact on Global Trade’ at the Partnership Summit 2014 here, H.E. Al Mansouri said bilateral and regional trade arrangements should be complementary to the multilateral trading system, and it can never be a substitute to the World Trade Organization (WTO) regulations.
H.E. Al Mansouri said the UAE is pursuing a trade policy based on economic openness and trade liberalization, and has elevated its position from a regional player to become a major international contributor to trade and investment.
“It was natural for the UAE to think economically at the regional level during the last two decades which constituted the era of building economic blocs. During this period, the aim was to strengthen economic and trade relations with neighbouring countries. However, the UAE economy has now advanced to enter the list of the top 20 economies at the global level,” H.E. Al Mansouri said.
Despite the political and economic instability in the recent years and the weak demand in Europe as well as some countries in the region affecting the level of exports and production in the region, the total volume of trade of the Arab countries reached $1.3 trillion in the year 2012 but the intra Arab trade does not exceed 11 per cent, H.E. Al Mansouri said.
However, H.E. Al Mansouri said the UAE volume of trade with Arab countries registered $17.4 billion in the year 2012 which comprises 6 per cent of its non-oil foreign trade amounting $291 billion. The foreign trade of the UAE, with the exception of free zones, constitutes 126% of the GDP of non-oil sectors, H.E. Al Mansouri added.
Explaining the UAE’s key status in the six-member GCC regional bloc, H.E. Al Mansouri said the UAE is the second largest contributor to the bloc, contributing 23 per cent to the GCC GDP. In terms of economic structural reform, the GCC countries are diversifying their economies away from the petroleum sector, and the UAE has been taking giant strides in this area with the country’s non-oil sector reaching 67 per cent of the GDP. The volume of GCC foreign trade is increasing, driven by the increase in oil prices and economic diversification process, and is valued at $1,024 billion in 2012.
H.E. Al Mansouri attributed the low intra-trade of the bloc to production pattern similarities, and said the UAE has steadily held the first position in intra-imports and second in exports. The volume of the UAE intra-trade with GCC amounts $23.2 billion comprising 8 per cent of its total non-oil trade.
“Diversification policies, intra-investment policies and FDI policies will be critical factors in expanding the intra-trade and the foreign trade for all GCC countries, especially the UAE which will continue building its policies driven by wise, aggressive, and realistic vision to advance competitiveness of its economy,” H.E. Al Mansouri said.
Stressing on the need for coordinated efforts, H.E. Al Mansouri said the GCC as bloc is in a better position to leverage its strengths to negotiate FTAs and Trade arrangements on behalf of the member states rather than negotiations undertaken on individual levels on such agreements. It was on this basis that the GCC states signed FTAs with Singapore, EFTA states and entered in an agreement with New Zealand. The GCC is also undertaking FTA negotiations with the EU, MERCASOR as blocs and on bilateral level with Japan, China, North Korea, Australia, India and Turkey, H.E. Al Mansouri said.