Doubling re-exports to markedly boost UAE’s economic output, Al Zeyoudi says

The UAE’s plan to double its re-exports is expected to significantly boost the industry’s contribution to the country’s gross domestic product, the Minister of State for Foreign Trade has said.

Achieving this would mean that every dollar of merchandise the Emirates re-exports would result in 12 cents being added to the national GDP, which would be 3.5 times its current impact, Dr Thani Al Zeyoudi said in a LinkedIn post on Wednesday.

This would enhance the national logistics infrastructure, promote activity within free zones, boost the inflows of foreign direct investment, strengthen global supply chains and support the creation of new jobs, he said.

“The UAE is a nerve-centre of international commerce,” Dr Al Zeyoudi said. “From our record non-oil foreign trade volumes in 2022 to our ongoing Cepa [Comprehensive Economic Partnership Agreement] programme, we have become a vital trade facilitator and trusted trade partner.”

The UAE Cabinet approved the national agenda for re-export development 2030 last month. The agenda which includes 24 initiatives and programmes aimed at doubling re-exports from the UAE over the next seven years.

The UAE is tapping into the significant potential of re-exports by “developing specialised areas in co-operation with local governments, establishing the International Trade Links Centre, launching supportive programmes and increasing foreign investments in the service sector”, Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai, said at the time.

Re-exports are a critical part of international trade, accounting for about a quarter of total exports, according to the Journal of Risk and Financial Management issued by the Multidisciplinary Digital Publishing Institute, a publisher of scientific journals.

The UAE’s non-oil foreign trade reached a record Dh2.23 trillion ($607.1 billion) last year, as the Arab world’s second-largest economy intensified efforts to reduce its dependence on hydrocarbons and boost global economic partnerships. The country’s re-exports reached 27.5 per cent of total non-oil trade, or Dh615 billion, last year, with the top commodities for re-export including smartphones, diamonds, automotive parts and jewellery and gemstones.

Overall, the Emirates accounted for 2.4 per cent of the world’s goods exports last year, according to the World Trade Organisation’s Global Trade Outlook and Statistics report released last week.

The country’s goods trade with the rest of the world hit $1.02 trillion last year, with exports and imports increasing due to higher crude oil prices, the WTO said. The value of its exports reached $599 billion last year, marking annual growth of 41 per cent, while imports reached $425 billion, accounting for 1.7 per cent of global merchandise imports.

The UAE has also forged Cepas to further boost the role of trade into its economy, and intends to sign 26 agreements this year, Minister of Economy Abdulla bin Touq said last month.

The benefits of Cepas include enhanced market access, lower or eliminated tariff rules, simpler customs procedures, clear and transparent rules and rule-based competition.

The UAE has already signed Cepas with India, Israel, Indonesia and Turkey, and is close to finalising agreements with Cambodia and Kenya.

It also announced the start of Cepa negotiations with Vietnam last week and is also in negotiations with Georgia, the Philippines, South Korea and Ukraine for similar deals.

“We are ready to meet the challenge – and leverage the power of trade to deliver longterm growth locally, regionally and globally,” Dr Al Zeyoudi said.

The UAE accounted for 2.4 per cent of the world’s goods exports last year, according to the World Trade Organisation