U.S. Statement on the Trade Policy Review of the United Arab Emirates

Delivered by Ambassador Michael Punke
U.S. Permanent Representative to the WTO

Geneva,
March 27, 2012

As Delivered

Thank you, Mr. Chairman.  The United States warmly welcomes the distinguished Minister and her delegation for the second WTO Trade Policy Review of the United Arab Emirates.  We appreciate the report that your delegation submitted for this meeting and we trust that your government will be able to say, when the TPR is finished, that your hard work was well worth the effort in terms of the UAE’s own self-assessment as well as your government’s contribution to the WTO’s basic principle of transparency.  In addition, we appreciate the Secretariat Report, which provides a useful context for exploring the UAE’s trade and investment policies.  Finally, I would like to thank our discussant, Reenat Sandhu, for her contributions to this important TPR.

The Secretariat notes that the UAE’s trade regime is generally open, with low tariffs and few non-tariff barriers to trade, which was instrumental to achieving solid economic growth prior to the global crisis.  Furthermore, the Secretariat indicates that this openness facilitated the diversification of economic activity, into services, real estate, and manufacturing.  In its report, the government noted its ability to overcome the repercussions of the global crisis in record time, which we commend.  We are also encouraged by the UAE’s commitment to pursuing a progressive economic agenda, focused on economic liberalization, diversification, and promotion of the role of the private sector.  The United States and the United Arab Emirates enjoy a strong bilateral dialogue and maintain a robust trade relationship, with bilateral trade continuing to expand.

While the UAE has reason to be pleased with the results of its economic reform efforts to date, the United States would like to highlight several areas that we believe need greater attention.  As the Secretariat notes, the investment regime remains considerably more restrictive than the trade regime.  We encourage the UAE to consider carefully the impact of its existing investment restrictions on the investment climate.  For example, we urge the UAE to consider our view that the inability of non-Emirati partners to hold more than 49 percent of the capital of a company and the inability of non-Emirati companies to pursue commercial activities in the UAE without an Emirati agent or sponsor are limiting its potential as an attractive investment destination.

We would also like to highlight the complex nature of the UAE’s import regime.  The Secretariat’s report notes that the UAE requires import documentation to be “legalized” and calls for consular fees to carry out this process.  These types of requirements seem unnecessarily burdensome and we are not sure what purpose they serve.  We hope the UAE will shed light on these practices, procedures, and the scope of their application during the course of this review.

The United States would also like to note the key role that a fair and transparent government procurement regime can play in attracting foreign investment.  We urge the UAE to become an observer to the WTO Committee on Government Procurement.  In addition, since the revision of the Government Procurement Agreement (GPA) that was agreed upon at the WTO Ministerial in December 2011 will facilitate accession to the GPA, we strongly encourage the UAE to commence accession to the GPA as soon as possible.  The United States stands ready to work with the UAE on its GPA accession.  This action would be a good way for the UAE to work toward enhancing its participation in the multilateral trading system, and we will be interested to hear the government’s plans in this regard.

According to the Secretariat’s Report, the Emirates Standardization and Metrology Authority is in charge of drafting, formulating and issuing standards.  The United States would like to urge the UAE to continue developing and expanding its efforts to ensure that technical regulations, standards, and conformity assessment procedures are notified to the Secretariat and published for comment in draft form with enough advance notice to allow all interested parties to have sufficient time to review and comment, and so that Emirati authorities can take those comments into account before finalizing the regulation, standard, or procedures.  The United States has found that consultation with, and involvement by, all interested parties in the regulatory process leads to rules and regulations that better meet their objectives while minimizing trade distorting effects.  The United States stands ready to work with the UAE on this effort.

We urge the UAE, as well as its Gulf Cooperation Council (GCC) partners, to complete their review of the Secretariat’s Factual Presentation on the GCC Customs Union, so that it can be reviewed in the Committee on Regional Trade Agreements.

We also request that the UAE and its GCC partners provide greater clarity on the specific products included in each Member State’s “list of special goods” that are exempt from the GCC common external tariff.

The United States shares a positive and supportive economic partnership with the UAE, and we hope that the UAE will find this review to be useful not only in its reform efforts, but also in its efforts to enhance its WTO participation.  We thank the Government of the UAE in advance for its efforts to respond to our questions, and we plan to review its responses carefully and request clarifications as necessary during the course of this TPR.  We look forward to continuing our work with the UAE and our trading partners to strengthen the global economy and the multilateral trading system embodied by the WTO, allowing trade and investment opportunities to expand.

Madame Minister, we wish you and your team a successful review, and we look forward to further cooperation with the UAE, both here at the WTO and in our bilateral exchanges.

Thank you.