Exploring Trade Policies In The UAE

In 1994, UAE became the undertaking party to GATT and so became a member of WTO in 1996. The purpose of UAE trade and ordinance was to beef up the state ‘s place by in the international trade. UAE had unfastened, competitory and encouraging trading environment behind its growing in trade policy. Since 1995, there has been enormous addition in both the exports and imports without usage of any WTO consistent trade redress Torahs. UAE exports variegation policy called FREE TRADE ZONES in which less than half of the export value comes straight from oil and gas merchandises. In these zones, traditional Torahs and ordinances are wholly eliminated making the dynamic concern environment. UAE has bilateral trade with several states like Europe Union, China, Meleagris gallopavo, Australia, every bit good as the United States. Due to certain institutional failings, absence of competition policy and limitations on foreign engagement in the economic system are the assorted internal barriers to merchandise which hinders the variegation into services. This study states the structural reforms including the abolishment of the restrictive Trade Agency Law, competition statute law, liberalisation and many-sided committednesss in the services sector which would better resource allotment and the UAE ‘s economic public presentation. Such studies ( Trade Policy Reviews ) are an exercising in which states ‘ trade and related policies are examined which is mandated in the WTO understandings at regular intervals. Developments taking impact on the trading system internationally are besides monitored. Two paperss are prepared for each reappraisal: a policy statement by the authorities of the member under reappraisal, and a elaborate study written by the WTO Secretariat independently which are so discussed by the WTO ‘s full rank in the trade policy reappraisal organic structure ( TRPB ) .

trade policy

The state UAE became the undertaking party to general understanding on the duties and the trade that is therefore known as GATT in the twelvemonth 1994, and therefore later ensuing into the rank of the WTO ( universe trade organisation ) in the 4th month of the twelvemonth 1996. The battle with the organisations that were international therefore stems from the state ‘s committedness to the international trade and the duties under many-sided policy of the trade government. As we talk of today. We can state that that the state has the ordinances in the topographic point that therefore aim for the strength of the state ‘s place in the international market as the unfastened economic system, the one which therefore welcomes the international trade and the competition.

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The state ‘s committedness to the unfastened international environment of trade is therefore evidenced by several of the studies that were therefore released by the organisation WTO. The organisation studies found out that the state ‘s duty of near about 5 % was therefore significantly lower than upper limit of 15 % duty which can therefore be charged under the international ordinances of the trade. Further, when we compare the state ‘s economic system with the other economic systems, we therefore find out that on the similar or same graduated table, the state tends to bear down the rates which are even more than really by the others. The farther findings therefore cemented the state ‘s claim to the unfastened, encouraging and competitory trade environment. In add-on, the state therefore witnessed an addition of 98 % in the exports from the twelvemonth 1995 when compared to the twelvemonth 2004 to a rise of 133 % in the imports. The additions therefore took topographic point without even the usage of any consistent redress Torahs of trade ( WTO ) by the state which therefore provoked an antidumping environment in the county and therefore the offseting responsibilities against any of the trading spouses.

As the consequence of the state ‘s variegation policy of the exports, less than the half of the export value of the state comes straight from the gas and the oil merchandises. The important factor that is therefore contributed to the variegation is the so called state ‘s free trade zones. Zones which are therefore being designated countries are within the state and where the ordinances and the traditional Torahs govern the bureau demands, licensing and therefore the bulk ownership of the state are therefore being wholly eliminated, therefore making the concern environment moral force which is therefore contributing to the unhampered growing.

Constructing upon the committedness to the free international trade, the state has therefore taken enterprise in the battle of many states and in order to therefore negociate with the bilateral understandings of the trade alongside GCC states. The states include European Union which acts as the individual trading axis, China, Turkey, United Nations every bit good as Australia.

Therefore speaking of the overall, the state ‘s trade policy has therefore been consistent with the duties under WTO. No questions have of all time been arisen upon the trade policy of the state. A competitory, unfastened and the free trade policy has been seen as the major and the chief drivers who are therefore behind the state ‘s growing and will therefore go on to play the important function in the state as the state builds on the accomplishments which are recent.

Trade policies do non let foreign ownership. The barriers to the exports of US are important. The state therefore maintains the non-tariff barriers to the investing and the trade in signifier of the restrictive sponsorship, distribution and the bureau demands. I therefore order to make the concern in the state outside of one of free zones ; the foreign concern in most of the instances should hold a national protagonist of the state and therefore an agent, distributer and the national patron of the state. Once it is chosen the agents, distributers and the patrons have the sole trade rights which can therefore non be replaced without their ain understandings. Thus the authorities which is tendering is therefore mot conducted consequently to the general accepted criterions which are international. Retendering is norm, to offer on the federal undertakings, a contractor or a provider who therefore be either a state ‘s national citizen or the company in which at least 51 % of portion capital is therefore owned by the subjects of the state. The federal stamps are therefore required to be therefore accompanied by the command bond in signifier of the bank warrant which is unconditioned for the five per centum of value of command.

Except for the companies which are located in one of free zones, at least a 51 % of the concern constitution should be owned by the national citizen of the state. The concern which is engaged in the distribution and the importation of the merchandise should be either a 100 % bureau owned by the citizen of the state or the distribution or a 51 % state ‘s and a 49 % foreign LLC ( limited Liability Company ) . The subsidies the fabrication houses are the lone available to the persons or those with a least local ownership of 51 % . The ordinances and the Torahs regulating the foreign investing in the state are therefore germinating. Therefore there is no intervention for the investors which can be called national in the state. The subjects who are non-GCC can therefore non have their ain land which means that one stock is therefore presently unfastened to the foreign investors and therefore capped at the 20 % foreign ownership of entire, Although the limited engagement by the aliens in the few common financess is permitted. There has been no investing difference over past few old ages which were therefore important which therefore involve the foreign investors of the U.S besides. The declaration claims is non one of the general jobs here because the foreign companies therefore tend non to even press the claims, holding a belief that making so might endanger the concern activity in the state in future.

The papers prepared by the WTO Secretariat gives study of the assorted observations on the economic environment, institutional model, trade policy instruments, Sectoral policies and trade policy.

Economic environment

The Economic Environment: Due to lifting monetary value of hydrocarbons there is 9 % addition in growing rate every twelvemonth which has led to touch the peak point in its per capita GDP in the universe which is near to US $ 24,000 and crude oil and natural gas serves about one tierce of UAE ‘S GDP. The UAE ‘s financial shortage, which was comparatively big in the yesteryear, moved into a excess of 4.5 % of GDP in 2004 which touched a grade of 19 % GDP in 2005 with the rise in hydrocarbon grosss. The coder of the state was introduced to supply chances for subjects in private concern in minimal quotas of Emirati staff in banking, insurance, professional, and distribution services where these commissariats do non use it farther increases the comparative attraction of operating in the free zones. The exchange system is by and large free of limitations because the UAE dirham, the national currency, is pegged to the U.S. dollar easy.

institutional model

Under the leading of the Federal Supreme Council the Ministry of Economy and Planning formulates, administers, and coordinates the UAE ‘s trade policies. Under the WTO Dispute Settlement Mechanism the UAE has ne’er been involved in any difference.

Constructing upon the committedness to the free international trade, the state has therefore taken enterprise in the battle of many states and in order to therefore negociate with the bilateral understandings of the trade alongside GCC states. The states include European Union which acts as the individual trading axis, China, Turkey, United Nations every bit good as Australia.

There are certain Torahs which besides contain commissariats that limit the engagement of aliens in the economic system. UAE has bilateral trade with several states like Europe Union, China, Meleagris gallopavo, Australia, every bit good as the United States

trade policy instruments

The UAE ‘s MFN duty is based on the GCC Common External Tariff ( CET ) ; which largely covers the basic nutrient points and pharmaceuticals. Importing and distribution activities can be reserved for sole UAE “ agents ” under the Trade Agencies Law, which leads to market cleavage, constitutes a barrier to full GCC integrating, and contributes to high monetary values for branded merchandises WTO is notified that the UAE does non hold export finance, insurance, warrant, or publicity Programs and export subsidies.To realize major undertakings UAE relies mostly on foreign companies for public procurance.

sectoral policies

Tourism has besides been a major beginning of future growing in the UAE which is now among the fastest turning activities. Crude oil and gas export has a huge portion in UAE ‘s national income. The UAE ‘s by and large broad and progressively diversified economic system, the importance of trade for its economic public presentation, and its turning economic power make it an progressively of import protagonist of the many-sided trading system. UAE ‘s consciousness of the baneful effects of anti-competitive patterns and have led to the freedom of basic nutrient points from the range of the Trade Agency Law which is increased by recent inflationary force per unit areas. The papers prepared by the authorities of the member under reappraisal consists of assorted policies, understandings and many more.


An enabling concern environment that is contributing to economic growing which has contributed to the world-renowned position of the UAE as an international Centre for trade, finance and services and has attracted reputable planetary companies which is successfully created and pursued by the UAE Government.


The UAE has high ratio of imports plus exports to GDP ( around 145 % ) . The UAE is besides an of import participant in planetary capital markets through several investing establishments, including, inter alia, the Abu Dhabi Investment Authority, the Dubai Ports Authority, Dubai Holding and the Abu Dhabi ‘s International Petroleum Investment Co. ( IPIC ) .


The private sector ( both local and foreign ) is the true engine of growing in the long tally and Foreign direct investing ( FDI ) is regarded as crucial in order to reassign of cognition and expertness in countries that are non yet the state ‘s nucleus competences, unfastened new market chances by the creative activity of new webs and make employment in cognition intensive and high value-added sectors.


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