Dubai Chamber highlights growth in UAE economic and trade relations with France

This economic cooperation will open huge opportunities for the UAE businesses to benefit from the signed agreements and memorandums of understanding.

This article provides an overview on selected economic indicators of the two countries.

According to the country ranking list published by the International Monitory Fund (IMF), France is the sixth-largest economy in the world with a GDP of more than $2 trillion being recorded in 2007.

France real GDP grew by 1.8% in 2007. According to initial projections, France GDP growth is expected to slow slightly in 2008 to 1.5% and again pickup to 2% in 2012.

France has a dynamic services sector that accounts for an increasingly large share of economic activity (77%) and is responsible for nearly all job creation in recent years (about 72% of total employment).

Furthermore, France has substantial agricultural resources, a large industrial base, and a highly skilled work force.

Table 1 below provides a brief comparison between UAE and France for some economic indicators.

It is clear from table 1 that France economy is larger than that of the UAE.

However, there are some similarities in the structure of their economies as both countries are reliant on the services and industries sectors.

The GDP per capita in the UAE is higher than that of France followed by a low unemployment rate in the UAE (3.17%).

In 2007, the inflation rate in UAE was estimated at 10.9%, which is higher than that of France (1.5%).

Foreign Trade
According to the country's world rank by exports, France is the fifth-largest exporter of goods and the fourth-largest exporter of services in the world.

The value of goods exports in 2007 estimated at $559bn, while the import reached $601bn, resulting in a trade deficit of about $52.1bn.

UAE on the other hand ranked 24th world exporter with a total exports (including oil exports) estimated at $152bn and imports totaled $94.7bn

In 2007, and according to statistics published by the Commodity Trade Statistics Database (COMTRADE), UAE trade with France totaled $6.3bn of which, 79% were imports and 21% were exports/re-exports. During the period 2003-2007, UAE imports from and (re)exports to France grew by 11% and 31% respectively (figure 1).

In 2006, Dubai total non-oil foreign trade with France (not including free zones) accounted for more than 60% of the UAE trade with France.

For this reason, Dubai trade with France in 2007 is used for more detailed analysis.

In 2007, Dubai total non-oil trade with France, including the free zone, totaled Dhs11.3bn, of which 95% are imports.

Dubai's imports from France is dominated by 10 product' categories that accounted for almost 80% of the total imports from France, these include among others essential oils and resinoids, perfumery, cosmetic or toiletry, nuclear reactors, boilers, machinery, parts thereof, electrical machinery and equipment and parts thereof, pearls, precious or semi-precious stones, precious metals, aircraft, spacecraft and parts thereof, pharmaceutical products, etc.

Similarly, Dubai's (re) exports to France predominated by 10 products that accounted for 80% of the total (re)exports, these include pearls, precious or semi-precious stones, precious metals, nuclear reactors, boilers, machinery, parts thereof, electrical machinery and equipment and parts thereof, optical, photographic, and cinematographic, etc.

In January 2008, UAE and France signed several agreements aiming at enhancing their economic relations.

The most important was the nuclear agreement, which provides a framework for cooperation between the two countries in the evaluation and potential use of nuclear energy for peaceful purposes.

The cooperation will include areas such as nuclear power generation, water desalination, basic and applied research, as well as in agronomy, earth sciences, medicine and industry.

Several memorandums of understanding have been signed between the two countries that range from the intellectual property rights to transport and education.

In the light of the French presidency of the EU which will begin in July 2008, France can play an important role in enhancing the bilateral trade between the two regions and as a gate to the EU, UAE investors can reap this opportunity and enter into strategic alliances with the businesses in France to invest in different fields such as energy, education, aerospace, etc.