Small businesses gives US exports to UAE a boost

US exports to the UAE jumped by more than half in the first five months of the year to US$27.4 billion as smaller businesses joined giants like Boeing and General Electric in selling goods and services.

A surge in US businesses setting up offices and branches in the UAE also helped the increase. Close to 1,000 US companies now have offices here, up from 750 a year and a half ago.

"Now we're seeing the smaller and medium (US) companies looking to the Middle East as a growth area," said Michael Corbin, US Ambassador to the UAE. Debt problems and recession in the euro zone and uncertainties elsewhere in the global economy meant the region was becoming more attractive to the country's businesses, he said.

"People are discovering their markets are limited in the US, they have done as much as they can in the US, Europe is very difficult for US companies to break into, Latin Amercia has its challenges and China and East Asia has been an area where we've done a lot but this is an area of the Arab world that has enormous potential," said Ambassador Corbin.

The UAE has overtaken Saudi Arabia in recent years to become the US's largest export market in the Middle East. Commercial aircraft, power equipment, defence items, transportation and infrastructure-related goods and services are among the biggest selling items. But increasingly, food, medical supplies and medical technologies are also joining the list.

About 200 US companies exhibited at the Arab Health event in Dubai in January and a similar number joining the Gulfood event in February. Traditional sectors are also holding up well. Boeing and other US firms reported signing more than US$20 billion in contracts at the Dubai Air Show in November last year.

The rise in US exports to the UAE in the first five months of the year was far greater than the 7 per cent climb in the country's overall exports world-wide.

US exports to the UAE reached $15.9bn last year, up 36 per cent from the year earlier. UAE sales to the US more than doubled by 113 per cent to $2.4bn over the same period. However, US companies are facing increasingly stiff competition from exporters in emerging markets offering cheaper goods.

"If decisions are being made on the lowest price rather than the total package, sometimes the customer loses when they don't get what they expected," he said. Ambassador Corbin's comments echo the global trade battle the US is facing against China, now the world's largest exporter ahead of the US, India and others.

The US's share of total goods shipped around the world slipped to 8.5 per cent in 2010, down from about 12 per cent during the 1980s and 90s. He said local buyers needed to remember the additional benefits often attached to US exports such as the transfer of technology, training of the local workforce and internship programmes with US companies.

"If people look at the sum total of what's offered with US goods and services, they will choose US products and I believe there's an understanding of the US value proposition here and we just need to remind them," he said.