The Middle East is an excellent regional market for U.S. companies looking for opportunities overseas. U.S. merchandise exports to the region have grown by more than 50 percent since 2009, totaling $69.6 billion in 2012.
To help American companies achieve further success in the region, Secretary of Commerce Penny Pritzker is leading a business development mission to the United Arab Emirates, Saudi Arabia, and Qatar to help American companies learn about potential opportunities and make important contacts with business and government leaders.
We spoke with Danny Sebright, President of the U.S.-U.A.E. Business Council, to get perspective on our important economic relationship with the U.A.E. and the Middle East as a whole. The Council is committed to the advancement of the commercial relationship between the United States and the United Arab Emirates, and it has made trade and foreign direct investment one of its key priorities in its advocacy efforts.
ITA: It looks like trade between the United States and the United Arab Emirates has risen pretty dramatically since 2010 – exports to the U.A.E. have almost doubled and imports from the UAE have more than doubled. Are there any specific catalysts for that trend? Do you expect continued growth?
Sebright: This rise began even before 2010, with the U.A.E. serving as the largest export market for U.S. goods and services in the broader Middle East, from Marrakesh to Bangladesh, for the last five years running. U.S.-U.A.E. trade, expected to exceed 2012’s record of nearly $25 billion in bilateral commerce, is a key contributor to President Obama’s National Export Initiative – launched in 2010 – and the Emirati leadership’s active and visionary efforts to diversify the federal economy and open U.A.E.’s corporate climate to increased foreign direct investment. The economic and trade relationship between the United States and United Arab Emirates has grown exponentially and solidified itself as a key pillar driving commercial and diplomatic engagement thanks in part to an active public sector and industry efforts. As a result, the U.A.E. is largely appreciated as a crucial destination, transit point, and supply chain link for America’s global businesses.
ITA: Are there any specific sectors that should be especially appealing for U.S. businesses in the U.A.E. and in the Middle East?
Sebright: The U.A.E.’s global position as a crossroads for business, trade, and travel has risen dramatically in recent years, with the U.S. playing a significant commercial role in delivering cutting-edge technology, industry thought leadership, and world-class infrastructure to the Emirates. This growth is a direct result of the country’s plans to position the U.A.E. as a global commercial hub by executing ambitious economic development and diversification goals across the industrial spectrum. A few key sectors highlighted in these comprehensive plans that present a wealth of opportunities for U.S. industry include: Infrastructure Development & Green Build; Energy Development (Renewable, Nuclear, Oil & Gas); Aerospace, Defense, Security; Civil and Commercial Aviation; Media, Tourism and Culture; Healthcare and Medicine; and Education.
ITA: What are some challenges for American businesses seeking opportunities in the U.A.E.?
Sebright: The governments of both countries are actively working hand-in-hand with private industry to open the doors for increased U.S.-U.A.E. trade and business – effectively tackling many new and traditional challenges along the way. The biggest challenges for American companies include: navigating the corporate and regulatory landscape of the U.A.E. before setting up shop, conducting thorough due diligence to establish necessary connections with a local partner in the U.A.E., and appreciating the cultural differences between an American boardroom and an Emirati one. Thankfully, turnkey services provided by the Commerce Department and other U.S. agencies geared toward promoting trade and investment are readily available. I would also encourage U.S. firms to plug-in to industry groups like the U.S.-U.A.E. Business Council to learn more about opportunities and utilize as a resource when issues arise that affect business practices.
ITA: For businesses interested in infrastructure opportunities in the U.A.E. and Middle East, how will this trade mission help them take advantage of the opportunities available? What are the advantages of working with the Department of Commerce and partner organizations like the U.S.-U.A.E. Business Council?
Sebright: It is truly an incredible time for U.S. infrastructure companies looking to do business in the U.A.E. and broader Middle East region – where market-driven consumer demand for world-class infrastructure is rising and opportunities abound. Let me first focus on opportunities in the Emirates. The nation’s leadership has committed hundreds of billions of dollars to airport expansion projects; the development of a federal multi-modal rail system in the U.A.E. set to ultimately link to neighboring countries; boost production from an active and diverse energy grid; and fund ongoing nation-wide road, clean water, and other infrastructure initiatives underway to drive economic growth. The recent awarding of World Expo 2020 hosting duties to Dubai will only cement these efforts. Preparations necessary for Dubai and the U.A.E. to host Expo 2020 are expected to require $500 billion in additional infrastructure investment, directly create approximately 250,000 local jobs, and boost federal efforts to increase global tourism traffic to the Emirates to 20 million by 2020.
In the broader region, commercial globalization and domestic economic development initiatives centered on building new hospitals, educational institutions, and energy diversification projects are creating opportunities for American businesses to bring knowledge and technology to the market. In Qatar, the country is focused on building world class infrastructure to support the 2022 World Cup. In Saudi Arabia, the leadership is focused on providing education and jobs for an increasingly youthful population, nearly 60 percent of whom are under the age of 24.
ITA: Is there any one piece of advice you’d offer to a business looking for opportunities in the U.A.E.?
Sebright: It is important for representatives of American industry operating, or looking to operate, in the U.A.E. to understand and appreciate that most transactions or corporate partnerships develop only after a personal rapport and a clear commitment to the Emirati partner and consumer has been established. In the U.A.E., the prevailing view is that a deal is only as good as the person, or people selling it.
ITA: What would you tell a business that hasn’t considered the U.A.E. as a potential export market?
Sebright: The U.A.E. provides an open corporate environment for American firms to conduct regional and global business in line with international standards and best practices. On top of that, the U.A.E. is centrally located within an eight hour flight of 60% of the world’s key emerging markets, developing local capacity to link up to many of the world’s supply chains, and actively looking to the U.S. as a key commercial and trade partner. Both stable and lucrative, the U.A.E. is a primed business destination with immense potential yet to be tapped.
ITA: Why is the U.S. economic relationship with the U.A.E. and the Middle East region so important?
Sebright: The economic relationship between the U.S. and U.A.E., in particular, is founded in mutual respect and complements close strategic ties formed over years of supporting global efforts to maintain regional security and political stability. U.S. economic engagement with the broader Middle East is incredibly important because the development and cultivation of a successful commercial relationship can boost diplomatic efforts already in motion to establish wider cultural understanding between key consumers and global citizens. Much of the recent political turbulence in the region has been intrinsically linked to communities featuring disenfranchised youth with few economic prospects or opportunities. As the U.A.E. has exemplified, political stability and economic stability go hand in hand.