Trade Relationship Between the UAE and the USA

The United Arab Emirates (UAE) has a strategic location on the map. The international trade routes contribute to its economic growth. However, many American investors have also collaborated with companies in the Middle East. It has enhanced the business dynamics and partnerships between the two countries, ensuring both countries’ interests are protected and goals are achieved collectively. The United States of America (USA) has been a great support to the UAE in terms of business and commerce. Our Dubai based law firm also provides legal services to UAE (Emirati), and US companies operating in UAE.

It has been seen that the UAE and the USA have had diplomatic ties since the inception of the UAE. However, trade relations improved with multiple partnerships and cultural exchange programmes. Looking at the economies of both countries, it is evident that the UAE has been the greatest trading partner in the Middle East for the USA. The UAE export market is profitable for Americans, and the USA export businesses also find the UAE a good trading partner. The UAE exports aluminum, petrochemicals and textiles to the USA. However, it imports machinery, vehicles and aircraft from the USA.

Both countries are thriving on specific trade sectors to meet the collective and individual objectives:

• Aerospace and Defense

The UAE thrives on tourism and must ensure the protection of its residents. Therefore, it has the best aircraft and defense systems, purchased from in USA, enriching its aviation competencies and national security. USA aviation companies have strengthened their ties with the UAE defense sector by becoming the leading aerospace suppliers in the Middle East.

• Oil and Gas Sector

The UAE is one of the biggest oil traders on the globe. Several American companies have made agreements with the UAE for oil and gas production and have collaborated on energy projects such as solar and wind power.

• Tech Sector

The advancement in the UAE’s economy is yet another milestone achieved by the country. Embracing technology and innovation in its trade, finance, and aerospace sectors has made the country a global economic hub. Many US companies have started their operations in the UAE. American companies like Google, Microsoft, and IBM are assured of making profitable businesses in the UAE with the integration of technology and innovation.

• Retail Sector

Countries thrive on their retail businesses, especially those related to consumer goods because more people shop for fashion, food, and electronics than any other sector. The UAE has expanded its retail sector in the USA by introducing companies like Landmark Group.

The countries ensure that their ties are strengthened by making trade agreements and taking initiatives in the best interests of both countries. The following agreements and initiatives have been signed between the UAE and the USA:

• Trade and Investment Framework Agreement (TIFA)

The agreement ensured the terms of trade between both countries, endorsing economic cooperation and better investment opportunities.

• Avoidance of Double Taxation Agreement

The UAE is a global hub as it has proved to have the best business practices internationally. They have an agreement with the USA that ensures that there is no double taxation involved in businesses, keeping the business environment flexible.

• Treaties for Mutual Investments

The countries have also created bilateral treaties to secure investments and promote mutual growth. Such treaties are managed fairly for the investors, providing them with an opportunity to resolve conflicts easily. For investments in UAE, if the readers need to meet with lawyers having expertise in business documentations, then they can hire our lawyers and legal consultants.

• Investments in the USA by the UAE

The UAE is one of the big investors in the USA’s business world. It has made investments in real estate, tourism, and the engineering sector. The UAE has invested several funds in American assets, keeping up with the diplomatic ties between both countries.

• Ventures in the UAE by the USA

The Americans have invested in the UAE while looking at it to become a global leader. Consequently, American companies have established their headquarters in the free zones of Dubai and Abu Dhabi.

Having a business in one of the UAE’s free zones has many benefits:

• Taxes are exempted for the business owners and investors.
• Expats can own their businesses 100%; otherwise, they need to share them with Emiratis in the main lands.
• Free zones have out-class infrastructure, attracting more expats, especially Americans, for business expansion.

There is nothing perfect in the world. Economic challenges happen to first-world countries. Those challenges could be different from those of other countries, but challenges exist. Moreover, these challenges come between two countries where the economic cooperation is being compromised. Solutions to these issues can strengthen the business and trade ties between both countries:

• Different Trade Laws

Both countries’ trade policies could be different. These policies and laws are made to achieve optimum economic growth. To avoid regulatory differences, the countries should be flexible with their trade policies and laws.

• Economic Differences

The UAE economy is diverse. It thrives in various sectors, such as oil and gas, tourism, finance, and technology. To maintain trade activity in the country, it has to strengthen its partnership with the USA. This means the UAE government has to diversify its exports further to the USA and other countries.

Both countries are always ready for collaboration. Considering their economic ties, they can develop sustainable business relationships by ensuring mutual initiatives and goals. However, both countries have taken over technology and innovation. With digital transformation from both sides, they can position themselves on a better global rank. However, the existing trade agreements can boost the economic growth of both countries. The government of these countries should come up with better trade reforms to remove the trade barriers for mutual benefit.

The business ties between the UAE and the USA show a way to become an economic power. Moreover, other countries should learn from these two countries about strengthening their ties by doing trade and cultural exchange programmes. Despite so many differences in the social fabric, these countries have ensured good relations across the world.

The treaties signed by both countries explain the strong relations between them. Fostering good relations with other countries could be difficult when the trade ties are weak. Therefore, companies should come up with ideas for exports and make profitable economies for both sides. If you are planning to start a business in the UAE as an expat, you should hire a business lawyer to discuss the prospects. They can guide you through UAE business laws and how you can strengthen ties with the UAE on a national level.