UAE Trade Policy
U.A.E. Trade Policy
The UAE became a contracting party to the General Agreement on Tariffs and Trade (GATT) in 1994, and subsequently became a member of the World Trade Organization (WTO) in April of 1996. This engagement with international organizations stems from the UAE’s commitment to international trade and its obligations under the multilateral trade policy regime. Today, the UAE has regulations in place that aim to strengthen the country’s position as an open economy, one that welcomes international trade and competition.
The UAE’s commitment to an open international trade environment is evidenced by several reports released by the WTO. WTO reports found that the UAE’s tariff of 5% was significantly lower than the maximum tariff of 15% that can be charged under international trade regulations. Furthermore, when compared to economies of similar scale the UAE tends to charge even lower rates than those charged by others. These findings further cement the UAE’s claim to an open, competitive, and encouraging trade environment. In addition, the UAE witnessed a 98% increase in exports from 1995 to 2004 compared to a 133% rise in imports. Such increases took place without the use of any WTO-consistent trade remedy laws by the UAE such as invoking any antidumping or countervailing duty against any trading partner.
As a result of the UAE’s exports diversification policy, less than half of its export value directly comes from oil and gas products. A crucial factor that has contributed to such diversification is the UAE’s so called “Free Trade Zones”. The zones, are designated areas within the UAE where traditional laws and regulations governing licensing, agency requirements, and UAE majority ownership are completely eliminated, creating dynamic business environments conducive to unhindered growth.
Building upon its commitment to free international trade, the UAE has taken the initiative in engaging several countries in order to negotiate bilateral trade agreements alongside the GCC nations. These countries include the European Union (as a single trading bloc), Turkey, China, Australia, as well as the United States.
Overall, the UAE’s trade policy has been consistent with its obligations under the WTO. A free, competitive and open trade policy is seen as one of the main drivers behind the UAE’s growth and will continue to play a significant role as the country builds on its recent achievements.