UAE-US Economic Relationship
The United States and the UAE enjoy a robust trade and investment relationship, much of which now has little direct relationship to UAE oil exports. This is one of the fastest growing US economic partnerships, both globally and especially in the Gulf region.
The UAE has one of the most open economies in the world. And its vigorous economic partnership with the United States reflects the UAE’s role as a regional leader in terms of economic reform, openness to international trade and investment, and political stability.
In 2012, the UAE and US partnered to form an Economic Policy Dialogue (EPD), which will serve as a platform to develop a number of new initiatives that are intended to strengthen the economic, trade and commercial relationships between the two countries.
Partners in a Globalized World
The volume of US exports and foreign direct investment into the UAE in recent years has grown dramatically and is likely to continue to grow in the future. This growth reflects the increasingly diversified UAE economy as well as the country's leading role as a modernizing influence in the Arab world.
- The UAE is the United States’ single largest export market in the Middle East, with more than $22 billion in exports in 2012 – the fourth straight year the UAE has held this distinction.
- The UAE has trade relations with every state in the United States, as well as the District of Columbia, Puerto Rico, and the Virgin Islands.
- The UAE pegs its currency, the dirham, to the dollar.
- More than 1000 US firms have a presence in UAE, from Bechtel and ExxonMobil to Starbucks and Cold Stone Creamery.
High Value Trade and Investment
The trade relationship between the UAE and the United States is characterized by a set of high-value trade and investment activities.
- Emirati company Taqa Global has invested in a 205.5 megawatt Lakefield wind project in Jackson County, Minnesota. When operational, the field will produce enough sustainable energy to power over 60,000 homes.
- In December 2010, The Mubadala Development Company made an additional investment of $500 million in The Carlyle Group general partnership. The Carlyle Group first sold Mubadala a 7.5% stake in its general partnership in September 2006.
- The UAE is the largest operator of Boeing’s 777 aircraft. In November 2011, Emirates Airlines placed a $24 billion record-breaking order for 50 Boeing 777-300ERs.
- Westinghouse will take part in a South Korean-led consortium that has won a $20-billion contract to build four nuclear reactors for commercial energy generation in the UAE.
- The Abu Dhabi Investment Authority (ADIA) acquired an 11 percent share in the Hyatt Hotels Group in December 2009.
- The Mubadala Development Company and General Electric have multiple cooperative projects, including an $8 billion joint venture in high technology.
- In January 2008, Jafza International of Dubai announced its intention to establish a new warehouse and transportation hub in Orangeburg, South Carolina. The “greenfield” facility reportedly would involve a $600 million dollar investment in a location with high unemployment and create as many as 5,000 new jobs.
- GLOBALFOUNDRIES, a joint venture between AMD and Advanced Technology Investment Company of Abu Dhabi, will soon open a $4.2 billion manufacturing facility in Saratoga County, New York.
Through significant investments in the United States for over 30 years, the UAE has been a dependable and long-term contributor to US economy, providing liquidity to US capital markets, growth for US companies and job security for US workers.
In 2008, the Government of Abu Dhabi initiated a global dialogue to clarify the investment principles of government-owned funds. As a result, 23 countries committed to operate their funds purely on commercial principles and adopt transparency measures.
UAE as Global Energy Supplier
In addition to being an important supplier of energy, the UAE is now becoming an increasingly relevant consumer of energy. The UAE will continue its long tradition of responsible energy stewardship as it diversifies its economy, expands hydrocarbon reserves, and contributes to the development of alternative energy sources.
- Abu Dhabi was the only OPEC member not to nationalize the holdings of foreign investors in the mid-1970s. Today international oil companies from the United States, Japan, France, Britain and other countries continue to hold combined equity stakes of between 40 and 100 percent in Abu Dhabi’s vast oil concessions.
- US companies are heavily involved as partners and suppliers to UAE energy companies.
- The UAE is making a $15 billion investment in clean energy technologies, through its Masdar Initiative.
US-UAE Business Council
The UAE and the United States continue to explore ways to enhance and build upon an already robust trade relationship. The establishment in May 2007 of a US-UAE Business Council, demonstrates how business-to-business initiatives drive the expanding commercial relationship.
While the UAE expects to see an improved trade balance with the United States as the economies of Abu Dhabi and Dubai continue to diversify, it is enthusiastic about advancing the many new joint ventures and partnerships it has in place with major US companies. From a UAE perspective, constructive international partnerships and joint ventures can provide capacity and skills for the local economy, in addition to the traditional benefits of investment.
