EU, GCC two-way trade peaks at EUR143bn
Two-way trade between GCC countries and the European Union has exceeded EUR143bn in recent years, according to a senior official of the European Union visiting the UAE to attend the Annual Investment Meeting taking place in Dubai from April 9 to 11, 2018. This confirms that the European Union is the largest trading partner of the GCC, when counted as a single economy.
In an interview prior to AIM, Ewa Synowiec, chief advisor to the European Commission and the general directorate of Trade, discussed her organisations vision on investments and the volume of international trade and investments between the EU and GCC countries, in general, and with the UAE.
Synowiec said that in January 2017, vice-president of the European Commission Jyrki Katainen, responsible for jobs, growth, investment, and competitiveness, paid an official visit to UAE and met with officials of the Government of Dubai. During these meetings, Katainen presented the Investment Plan for Europe as one of the ways to increase economic links between the UAE and the EU. The Investment Plan seeks to mobilise private investment for business partners in the UAE.
“During his visit, VP Katainen’s Emirati counterparts also encouraged him to consider increasing bilateral economic cooperation between the EU and the UAE (in addition to the EU-GCC level) and, as a result, I am happy to say that in January 2018 the EU and the UAE signed a bilateral Cooperation Arrangement to boost relations in numerous fields, including education, transport, trade, enterprise, environment, health and consumer protection, as well as research and innovation,” she said.
Regarding the economic situation in the Middle East, Synowiec said it should be noted that 2017 marked the weakest real GDP growth in the Gulf region in recent years. The marked slowdown reflected direct and indirect impacts of the fall in global energy prices, fiscal consolidation weighing on non-oil activities, and lower liquidity in the banking sector, as government deposits were drawn down.
Synowiec noted, “We believe that government-introduced stimulus programs and some visible economic reform efforts are going to drive the aggregate growth of the GCC up in 2018. For 2019, the outlook for oil exporters is even more positive as oil production cuts might expire and the major event, EXPO 2020, is drawing closer.”
Answering a question on how high the trade volume between the EU countries and the Gulf is, and specifically with the UAE, she said that the GCC is an important trade partner for the EU. In 2017, the EUs overall trade with the GCC reached some EUR143bn, making the region the EU’s sixth most important trading partner and fourth most important export market (with EUR100bn in exports). EU-GCC trade has been steadily growing between 2007 and 2017, with total trade increasing by 54% in ten years. The EU remains the number one trading partner of the GCC.
She further said that EU exports to GCC countries are diverse, but focused on industrial products (91%), such as power generation plants, railway locomotives and aircraft, as well as electrical machinery and mechanical appliances.
Machinery and transport equipment (EUR 47.7bn, 48.0%) and chemicals (EUR 10.5bn, 11%) were the main categories of products exported in 2016. EU imports from GCC countries are mainly mineral fuels and mining products (EUR 28.7bn, 66%) and pearls and precious metals (EUR 2.8bn, 6.3%).
Trade in services has similarly seen growth, with total services reaching almost EUR40 billion in 2016, which put the GCC at 4.7 percent of the EUs total trade in services.
Regarding the value of the European Unions trade with the UAE, she said that the UAE represent by far the largest export market for the EU in the GCC region, with exports amounting to EUR42bn in 2017 and accounting for 2.3% of total EU exports. These figures indicate that the UAE was the seventh largest destination for EU products in 2017.
Total trade in goods between the EU and the UAE amounted to EUR52.6bn. The most important goods in EU exports were machinery and transport equipment (more than half), manufactured goods and chemicals.
The largest share in imports from the UAE to the EU market have mineral fuels, lubricants and other related materials, as well as manufactured goods.
The EU-UAE trade in services amounts to almost EUR15bn.
“There is a great potential to further increase our mutual trade, both at the GCC level and bilaterally between the UAE and the EU. The efforts taken by the GCC countries, with the UAE in the lead to diversifying their economies, will lead to an expansion of their export base and is likely to reduce the current trade deficit that the GCC has with the EU. Investment by the EU companies to the GCC will have a crucial role in this transformation process,” she said.
The eighth edition of the investment meeting is being organised by the UAE Ministry of Economy and held under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
The three-day meeting of high-profile officials that includes 25 federal ministers, 19 mayors, eight heads of organisations, one head of parliament and investors, will see the signing of a number of agreements and announcements that are meant to help countries boost the flow of Foreign Direct Investment, FDI.