The world is in an unsteady flux in terms of trading arrangements between countries. For example, no-one exactly knows how Brexit will eventually be delivered and the trading effects it will have on the EU. And, while America seems to have struck a truce with China, who can predict just how long this will last?
In this context, links between trading partners like the EU, including Britain for the moment, and the UAE have taken on even greater importance. This is because there are enormous mutual benefits to be enjoyed by fostering this relationship. From the UAE’s perspective, dealing with the EU on open and equitable terms provides access to a market of around 512 million people with a GDP of a truly staggering €15.3 trillion. On the other hand, it means that European countries will be trading with places like Dubai which in 2018 had a GDP of $102 billion and Qatar whose figure was almost double this at $192 billion, equating to a near world-leading $69,688 per capita.
Key sectors, now and in the future
Looking at the official figures certain industries and sectors stand out in particular and it is likely to be these that see the biggest increases in trade over the next few years. Some are fairly obvious, others rather less so.
For example, the seemingly insatiable desire for exclusive designer brands from Europe in the UAE means that exports of clothing were worth €659 million in 2018. Similarly, the appetite for European food generated €2.58 billion. Another huge export area is machinery and transport equipment that was worth €16 billion over the same period and, as part of the Abu Dhabi Vision 2030, this is set to be an even more lucrative market.
As the region seeks to diversify away from dependence on oil and gas products, developing agriculture will also be a priority. So, the agricultural food and beverage market, already worth €2.9 billion a year is also primed for growth.
Naturally, there’s also that major invisible export – tourism. Already, visitors from the EU account for around 30% of room nights in the UAE. With an increasing number of mid-market hotels being built this is also a figure set to increase as visits become more accessible to those whose budgets might not stretch to five-star luxury.
One particular sector that appears to be on the rise for both the UAE and Europe is health tourism. Currently Europeans account for around 15% of patients who head to the Emirates to take advantage of medical treatment and expertise while Europe, and London in particular, has long been a center for traffic in the opposite direction.
Balancing the books
Up until now there has been a definite, and understandable, imbalance between the levels of imports and exports with the UAE accepting €37 billion worth of the former in 2018 but only exporting €11 billion worth to the EU. But while the value of imports showed a marked decline from the 2015 figure of €48 billion, exports from the UAE appear to be on the rise following an increase of around €1.7 billion since 2015.
The fact that UAE countries go to such great lengths to encourage not just the trading relationship, but inward investment too will also surely play a part in the future. Already, there are many tax breaks and incentives available to encourage European businesses to open up. Accommodation is also in great supply. For example, those interested in renting villas in Dubai will find a wide choice available. This flexibility to rent, not just buy, makes particularly good sense for businesses that may have a turnover of staff in the region, especially during the initial period of setting up business there. In a similar vein, the wide choice of properties and property sizes available can suit all levels within any size of business.
While European countries may not have quite the same incentives for UAE-based businesses to set up in France, Germany or Italy, there are certain to be opportunities and co-operation is certainly the way ahead.
So it all adds up to ever-closer ties being created between Europe and the UAE, and mutual benefits being enjoyed – something that both sides will be more than happy to see.