worth of U.S. goods in 2007. Implementation of a Free Trade Agreement (FTA) between the United States and the UAE – a goal to which both nations remain committed – would likely generate even more trade.

“Our trade is booming because the UAE is booming,” notes Frank Lavin, U.S. Under Secretary of Commerce for International Trade. “This is one of the best business platforms in the world and one of the most inviting environments in which to work,” he added.

Lavin’s observations were seconded recently by the World Economic Forum. In a report released in April 2007, the Switzerland-based organization ranked the UAE as the most competitive economy in the Arab world and the 29th most competitive economy globally. The report attributed the UAE’s success to “sound economic management.”

According to the U.S. Government, the UAE economy grew by an estimated 10.2 percent in 2006 and continued to diversify into non-oil sectors. As recently as 1980, only 25 percent of the UAE’s GDP derived from non-oil sectors. Today, over 70 percent of the country’s GDP is generated by such non-oil sectors such as finance, manufacturing, tourism and transportation.

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In the aggregate, non-oil sectors of the UAE economy grew by an estimated 19 percent in 2006, and with massive levels of investment continuing to flow into these sectors, there is good reason to believe that they will continue to grow in economic importance. This trend away from the oil sector represents the

success of policies put into place by the UAE over 25 years ago, when it was determined that the country must prepare for the day when its non-renewable oil and gas resources would no longer be available.

A significant portion of the re-export and regional trade is tied to high oil prices and oil industry-fueled developments throughout the UAE re-export footprint from Morocco to South Africa to India. And the growth of this regional trade has been largely driven by the smaller Emirates with limited hydrocarbon resources. They have moved aggressively to play a key role in providing services to the larger oil producers in the region.

The UAE’s rapidly expanding role as a re-export and distribution center also has contributed to the growth in U.S. exports. The UAE is the world’s third largest re-export center, trailing only Hong Kong and Singapore. NUSACC estimates that approximately one-quarter of all merchandise goods that enter the UAE are re-exported to other regional markets.

The UAE’s booming free trade zones ensure that the re-export sector will continue to grow. While the Jebel Ali Free Zone Authority in Dubai is the UAE’s largest and most prominent free trade zone, the country boasts a total of 23 such zones located in all seven Emirates, and each Emirate is in the process of developing new or expanded free trade zones. All of the UAE’s free trade zones allow 100 percent foreign ownership, 100 percent import and export tax exemptions, and 100 percent repatriation of capital and profits.

Although re-exporting activities account for a significant share of imports into the UAE, the local market also has great promise. Consumer spending in the UAE is on the rise and shows few signs of abating. A youthful population – around 40 percent of the UAE’s population is under age 15 – combined with higher incomes and improving education, is resulting in a steadily expanded market for a wide range of consumer goods. Based on the total value of U.S. exports, each UAE citizen spent approximately $2,500 on American-made goods in 2006. In addition, the UAE is developing into a world-class tourist destination – specifically, a shopping haven for tourists. Over seven million people visited the UAE in 2006, a number that is expected to rise rapidly along with the development of additional tourist attractions

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and resorts. Dubai alone has projections of 15 million tourists by the year 2015. And with hundreds of billions of dollars worth of new projects either under development or on the drawing board, the demand for U.S. products – and opportunities for U.S. manufacturers – promises to accelerate in coming years.