Openness, diversification create "global economic identity"
Washington -- New, fast-growing Persian Gulf trade and financial centers attract foreign investment, stimulate regional development and can serve as models of diversified, open economies, U.S. officials say.
Speaking March 12 before the American Business Group of Abu Dhabi, the United Arab Emirates, Under Secretary of Commerce Frank Levin said the United Arab Emirates has become a vibrant business hub, "one of the best business platforms in the world and one of the most inviting environments" in which to work.
The energy-rich United Arab Emirates has used its oil and gas revenues to invest in the manufacturing and services sectors, including aluminum production, telecommunications and tourism. The nonpetroleum and natural gas part of its GDP climbed 11 percent in 2005.
Lavin said the United Arab Emirates is the largest export market for American products in the Middle East, larger than Turkey and Egypt combined. Bilateral trade was over $13 billion in 2006 with some $12 billion in U.S. exports, which represented over 40 percent U.S. export increase over the past year.
Emirates Airlines is the world's largest customer for Boeing 777 airplanes. Exxon-Mobil is a strategic partner with Abu Dhabi Oil Company, and Occidental Petroleum owns 24.5 percent of the UAE-Qatar Dolphin Energy natural gas project.
The Emirati information technology firm Mubadala has formed a joint venture with Texas-based Electronic Data Systems. Also, Dubai's property development company Emaar entered the U.S. market in 2006 by purchasing John Laing Homes in Newport Beach, California.
"[O]ur trade is booming because the U.A.E. is booming," Lavin said. "This country and this city are a testament of what can be accomplished when tolerance, technology and tradition are in harmony," he said, adding that over 700 U.S. businesses made the United Arab Emirates a logistics and financial hub.
Lavin also spoke about challenges in U.S.- Emirati trade relations: export controls, counterfeit goods manufactured in some UAE territories, limits on foreign asset ownership in United Arab Emirates companies -- and called for further reduction of trade barriers. "Our hope is that this leads us to a bilateral free-trade agreement," he said. (See related article.)
GULF AREA FINANCIAL CENTER
Further north on the western coast of the Gulf, the island kingdom of Bahrain has developed into "the freest economy of any Arab country," bustling with economic activity, according to U.S. Commerce Deputy Secretary David A. Sampson.
Speaking March 8 to the Arab Chamber of Commerce in Houston, Texas, Sampson said that Bahrain, facing declining oil revenues, "positioned itself as a massive financial services center" and a leading exporter of aluminum. It also has become a democratic pioneer among its neighbors.
In September 2004 Bahrain and the United States signed a bilateral free-trade agreement (FTA), which entered into force on August 1, 2006. As a result, U.S. exports to Bahrain rose 40 percent and Bahraini exports to the United States rose by 46 percent, Sampson said. (See related article.)
A U.S. Commerce Department official told USINFO March 15 that one reason given by U.S. companies for investing in Bahrain is its favorable investment climate and regionally competitive cost of living.
Among major U.S. investments, Kraft Foods is building a $40 million plant in Bahrain that will produce cheese and powdered beverages for distribution throughout the Middle East. It will employ 250 to 300 workers and incorporate the latest food-manufacturing technologies, according to the corporation.
The U.S. software giant Microsoft is expanding its Bahrain office and recently has signed a memorandum of understanding with the Bahraini Ministry of Social Development to launch a digital literacy program in the NGO and civil-society sector.
Bahrain is one of five Middle East countries that have FTAs with the United States. The others are Israel, Jordan, Morocco and Oman.
U.S. trade officials quote economic data showing that FTAs with the United States, which are the main blocs of the future Middle East Free Trade Area, also help countries to increase trade with their neighbors and attract foreign direct investment.
(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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