President Sheikh Mohamed's White House visit shines spotlight on decades-old UAE-US trade ties

Bal Krishen, National News, September 20, 2024

UAE President Sheikh Mohamed's landmark visit to the US next week is poised to elevate the ties between the two key economies and pave the way for even greater collaboration in the future.

The Emirates, the Arab world's second-biggest economy, and the US, the world's largest, have cultivated a strong commercial and investment relationship over the past six decades. These two powerhouse nations have built enduring bonds that have withstood ever-changing economic and political landscapes.

President Joe Biden will welcome Sheikh Mohamed to Washington for the “historic” first visit, the White House announced on Wednesday. National Security spokesman John Kirby noted that the meeting will be the first by a president of the UAE to the White House, and added that Vice President and Democratic presidential nominee Kamala Harris would also take part.

The face-to-face discussions will tackle bilateral and legal issues, as well as key sectors including advanced technology, clean energy, space technology, supply chain and critical infrastructure investments, he added.

"Already, we enjoy a strong foundation of partnership and trust that our countries and our companies have built over the past six decades," wrote Martina Strong, US Ambassador to the UAE, in a column for The National.

By the growing numbers

The UAE has been the top export market for US goods since 2009 in the Middle East and North Africa region, according to data from the UAE Embassy in Washington, DC. In 2023, record figures were posted, with bilateral trade between the two nations hitting $31.4 billion, it said.

The US exported more than $24.8 billion of goods and services to the UAE, a 19 per cent jump from 2022 – resulting in an $18.3 billion trade surplus for the US, which is America’s fourth largest globally, official data shows. US companies "continue to invest significantly" in key UAE sectors including energy, aerospace, technology and financial markets, it said.

The Emirates, meanwhile, has trade relations with all 50 US states and has supported the creation of about 166,000 American jobs, the embassy data said. Its investments in the US have surpassed $1 trillion, spanning from real estate to renewable energy, it added. The US was also among the UAE's key re-export partners that grew in the first half of 2024, UAE government data showed last month.

The UAE's strategic location and business-friendly environment make it an advantageous partner for American companies, said Wael Makarem, financial markets strategists lead at financial services firm Exness.

"The UAE-US trade ties are of paramount importance in the current geopolitical and global economic environments. Additionally, the UAE's growing diplomatic influence and its focus on boosting global trade partnerships further enhance its value as a US ally," he told The National.

"As both nations continue to strengthen their ties, this relationship is poised to play a crucial role in shaping regional dynamics and global economic trends."

The Emirates also benefits most from its role as a "neutral economic connector between east and west", a position that allows it to diversify partnerships, mitigate geopolitical risks and leverage its unique advantages as a flexible and stable business hub", Mr Makarem added.

Key partnerships

The two countries have continuously expanded co-operation throughout the years, especially in advanced sectors and the latest high-growth technologies, with a number of key partnerships forged. Abu Dhabi's clean energy company Masdar currently has four utility-scale wind projects in Texas and New Mexico, and five solar projects in California. Two of the solar projects, Big Beau and Desert Harvest, include battery energy storage systems.

In technology, Abu Dhabi artificial intelligence and cloud company G42 received a $1.5 billion investment from Microsoft, which will help to further boost the former's global expansion plans and strengthen the UAE's position as a global technology hub. That also put the UAE in the spotlight, as it has been able to grow its stature as a regional leader for global technology, having attracted attention from other US giants including Oracle, Google and Amazon, and highlighting increasing investor confidence not just in the country but through the rest of the Middle East as well.

Abu Dhabi's strategic investment arm, Mubadala Investment Company, has a stake in the New York-based chipmaker GlobalFoundries. In aviation, the US plane maker Boeing has remained a staple partner for UAE airlines – Abu Dhabi's Etihad Airways, and Dubai's Emirates and flydubai, the latter two of which announced new orders at the last Dubai Airshow.

Abu Dhabi National Oil Company, on the other hand, made a breakthrough this year with its first US investment, acquiring a stake in the first phase of NextDecade’s Rio Grande liquefied natural gas export project in Texas in May. Adnoc followed that up with the acquisition of a 35 per cent equity stake in oil major ExxonMobil’s proposed blue hydrogen and ammonia production facility in Texas, further boosting its presence in the US.
 

"Looking ahead, the trade relations between both nations are expected to strengthen further, given the nation's mutual interests and shared goals across various sectors like AI and clean energy," Bal Krishen chairman of Dubai-based financial advisory consultancy Century Group, told The National.

Source

National News