Impact of International Trade on the Economies of UAE - Assignment Example

Impact of International Trade on the Economies of UAE Name Institution Date Table of Contents Impact of International Trade on the Economies of UAE 1 Impact of International Trade on the Economies of UAE 8 2 Table of Contents 2 Impact of international trade on the economies of UAE 3 Introduction 3 Main arguments 3 Evidence gathered through study of various mass media 3 Analysis of this information gathered 7 Conclusion 7 References 8 Impact of international trade on the economies of UAE Introduction United Arab Emirates has sustained a free and open market system with close connections to the global economy. In the past, the leading industries of UAE were fishing and pearling. Since discovery of oil in UAE in the 1960s, the closest trading partners of the federation have been industrialized countries in Asia and Europe, mainly France, Great Britain, Japan, Germany and United States. In general, the health of the economies of UAE has relied on oil prices along with economic vivacity of its key global trading partners. Main arguments International trade has played a greater role towards the growth and development of the United Arab Emirates economies. UAE countries have depended heavily on oil to trade with other trading partners. The paper critically looks at the impact created within the region and the resultant effects of international trade Evidence gathered through study of various mass media According to media sources, International trade has lead to UAE’s economic development in recent years. According to Roberts (2000), successive developments in international trade and approval of free market regulations and policies, have resulted to remarkable rates along with a trend towards diversified and sustainable economic development. The United Arab Emirates is one on the leading nations with the most open and free economies in the globe. The vigorous economic partnerships and global trade with nations across the globe reflects the role of UAE as a regional leader on the basis of openness to global investment and trade, economic reform as well as political stability. The volume of global exports along with foreign direct investment into UAE in latest years has expanded dramatically. This expansion reflects the progressively more diversified UAE along with the leading role of the nation as a modernizing power in Arab world (Roberts, 2000). For over three decades, global finance and oil has driven the economy of UAE. Nevertheless, successful attempts at economic diversification through international trade , manufacturing, banking and tourism has changed UAE form a gas and oil dependent nation into a widely diversified economy. Feenstra (2003) argues that the UAE government has spent in the oil wealth of the nation into several infrastructure projects with the aim of supporting business friendly atmosphere and to attract both local and international business operating in the region. As a consequence, sophisticated transport and telecommunications facilities are supreme in the area, one of the key reasons it acts as a distribution and storage hub of Middle East. The historical trading of UAE subsists, and currently it acts as an international gateway, re-exporting services and gods form all over the globe, to huge neighboring markets like Saudi Arabia and Kuwait, along with nations of Africa and Indian Subcontinent. In order to attract, overseas investments, UAE has developed several free zones where foreign investments restrictions do not apply. These free zones have facilitated business opportunities for global corporations seeking to establish their business and operate in the area. They have also played a significant role for numerous foreign firms in their global planning (Feenstra, 2003). The UAE provides a good business environment for international trade, an act that has made several multi-nations from all over the globe to establish their businesses in the region. The country has become and is still the favored business hub in Middle East. This is due to social, economic and political stability provided by UAE government along with its upbeat approach to develop a business pleasant environment for local as well as international players. UAE has become a nation of choice for several institutions, private individuals and corporations to undertake business in the area. UAE is increasing its efforts to promote the competitiveness and position of the Emirati in global trade. It has set up a widespread strategy that intends to attain increased growth rates in export of services and goods. The priority fields recognized by this strategy entail the development and support of non-oil export sector , enhancing local manufacturers and products for increased competition and penetration in global markets, creation of free trade agreements with global and regional economies and stipulation of state of art facilities and an efficient regulatory framework (Fujita et al, 2004). A blend of factors like robust gross domestic product, simplified export and import procedures, stable currency, and political and economic stability contribute to offering a positive investment climate in UAE, making it a key hub for global trade in the gulf region. Niels and Lensink (2003) note that UAE is identified in the area as a business friendly nation with the government focused upon diversification and economic reform. In order to increase its profile in global trade arena and safeguard the country from harmful impacts of counterfeit services and goods that demolish national economy, UAE enforces stringent regulations and rules to safeguard intellectual property rights and to combat of forms of commercial deceit. The nation possesses a well instituted legal framework that abides by global standards to safeguard intellectual works. The warm relationship that exist along with UAE and global community based upon joint respect and communal vision to attain economic stability have considerably contributed to thriving investment and trade amid UAE and global nations across the world. The nation’s liberal and flexible economic model is being transformed into burly ties with international and regional trade coalitions focusing upon a policy of partnership and achievement of long term and realistic economic objectives. UAE has entered into numerous economic, investments, technical and trade agreements with several nations and coalitions around the globe to enhance better economic incorporation and establishment of a long term economic collaboration (Niels, & Lensink, 2003). UAE trade policy According to MoFT (2009), the trade policy of the UAE at the moment provides a highly open environment for global trade and rivalry. The nation turned into a contracting party to General Agreement on Tariffs and Trade in 1994, and consequently a member of World Trade organization in 1996. The engagement of UAE with global organization emerges from the country’s commitment to global trade as well as is responsibilities under the regime of multilateral trade policy. In modern days, UAE has regulations that aim at strengthening the position of the country as an open and free economy that welcomes global competition and trade. Due to the exports diversification policy of the UAE, less than half of the nation’s export value comes directly from gas and oil products. A vital factor that has led to this diversification is UAE’s free trade zones. These zones are designated regions in the UAE where conventional regulations and laws governing agency requirements, licensing and the UAE majority ownership are entirely eradicated, generating a vibrant business environments favorable to unimpeded economic growth (MoFT, 2009). Analysis of this information gathered Building on its devotion to free global trade, UAE has established a plan in engaging numerous nations so as to confer bilateral trade agreements along with the GCC countries MoFT (2009) notes that the trade policy of UAE has been constant with its requirements World Trade organization. A, competitive, open and free trade policy is viewed as a key driver in the Nations economic growth and will go on to play a vital role as the nation builds on its current economic achievements. UAE adopts a trade policy marked by openness along with harmony with global markets, entailing WTO member states. The economic strategy of UAE is centered upon establishment of a diverse, flexible, sustainable and competitive economy. Conclusion It is worth noting that International trade has led to the growth and development of UAE’s economies. International trade has also led to diversification of the economies of UAE from gas and made the nation the nation an open and free market economy. The UAE government has highly invested in several infrastructure projects to support both local and international trade in the region. References Niels, H., & Lensink, R., (2003). Foreign direct investment, financial development and economic growth, Journal of development studies, 40, 142-163. Roberts, S, (2000). Large, international business and economic development, International review of applied economies, 14, 120-125. UAE Foreign Trade Ministry (MoFT) (2009). UAE and the WTO. Dubai: Macmillan. Fujita, M., Krugman, P., & Venables, A., (2004). The spatial economy: Cities, regions, and international trade. New York: MIT Press. Feenstra, R., (2003). Advanced international trade: Theory and evidence. New Jersey: Princeton University Press. Read More