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UAE - Trade and Diplomatic Relations with the US

Diplomatic and Security Relations

The US and UAE enjoy excellent diplomatic and security relations. Relations between the two countries started to move improve further during the 1980s when the Iranian regime of Ayatollah Khomeini and Soviet Union 's expansionist plans in the region were viewed as a threat by both countries. During the mid to late 1980s the US assisted the UAE in its plans to deter possible attacks by the Iranian regime against its Tankers, such as those carried out by Tehran again Kuwait . Consequently the UAE has since purchased a large amount of US weaponry such as Tanks and Aircraft as part of its plans to bolster its defence capabilities. Such purchases were increased after the Iraqi invasion of Kuwait in 1991. Since then UAE has provided political backing to US efforts to remove Saddam Hussein and to bring stability to Iraq . The UAE government has provided financial and political backing to the new Iraqi interim government.

Trade Relations

Current Trade figures


US exports to the UAE were $ 4,063.7 million USD

US imports from UAE were $1,141.8 million USD.

The US is a net exporter to UAE for the value of $ 2,922 million USD.

US export commodities to the UAE were mainly weapons, aircraft and medical instruments. UAE export commodities to US are oil and textiles.

Current Trade agreements

The United States and the United Arab Emirates signed a Trade and Investment Framework Agreement (TIFA) on March 15 2004. The agreement establishes a joint council whose goal is to examine ways for the two countries to expand their bilateral trade and investment.

This agreement is seen as a stepping stone towards the establishment of a Free Trade Agreement (FTA) between UAE and the US as part of President Bush's Middle East Free Trade Agreement (MEFTA) initiative which seeks to promote free trade between US and the Middle East region by 2013. Talks with the UAE government regarding the establishment of the FTA started in March 2005.

The FTA agreement is expected to boost US exports to UAE's strengthening economy. Meanwhile it is expected that an FTA between the two countries will lead to increase in UAE's exports and in US investment in the UAE economy. It is also expected that an FTA will encourage the creation of new non oil based industries in the UAE, in line with UAE plans to diversify its economy away from oil.

By: Meir Javedanfar- www.meepas.com