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NUSACC Takes Aim at Booming Arab Export Market
Diplomatic Pouch / March 15, 2011

By Larry Luxner

As Arabs throughout the Middle East rise up in revolt against autocratic regimes, some 200 executives gathered at Washington’s Ritz-Carlton Hotel to hear how U.S. companies can cash in on the region’s growing trade opportunities.

The Feb. 7 event, hosted by the National U.S.-Arab Chamber of Commerce, was attended by a visiting group of Tunisian businessmen as well as the ambassadors of four Arab countries: Bahrain, Iraq, Morocco and Oman. featured Francisco Sánchez, undersecretary for international trade at the U.S. Department of Commerce.

Sánchez, introduced by NUSACC’s David Hamod, was named one of the most 100 influential Hispanics in the United States by Hispanic Business magazine, and has traveled frequently to the Middle East.

“I understand how important the MENA [Middle East-North Africa] region is,” Sánchez said. “In my first year as undersecretary, I’ve been to the MENA region four times.” The official, who elicited some polite laughter when he accidentally introduced Bahraini Ambassador Houda Ezra Nonoo as “her majesty,” noted the protests shaking the Arab world.

“Change is afoot throughout the region, and nothing can safeguard the region more than economic progress,” he said. “We see the doubling of U.S. exports by 2015 as a main goal, and the International Trade Administration is at the forefront of making that goal a reality by eliminating trade barriers and ensuring foreign business environmeents are transparent and equitable.”

Sánchez noted that in the first 11 months of 2010, U.S. exports of goods to the 17 Arab countries comprising the MENA region came to $44 billion, up from $40 billion in the same period of 2009. Final year-end numbers could top $48 billion, he said.

Saudi Arabia and the United Arab Emirates are the top two export markets, followed by Iraq, Kuwait, Lebanon and Qatar. According to Hamod, the next four slots are all countries that have signed free-trade agreements with the United States: Oman, Morocco, Bahrain and Jordan.

“The U.S. is doing well, but we can’t afford to rest on our laurels,” said Hamod. “The BRIC countries [Brazil, Russia, India and China] are increasing their markets share in the Arab world at the expense of the United States. As our share dropped from 33 to 28 percent from 2007 to 2009, India’s exports to the region grew from 19 to 24 percent. That’s a long-winded way of saying the competition is getting stiffer and stiffer. For U.S. companies to hold their own against these newfound Asian competitors, we need to overhaul America’s cumbersome and sometimes humilitating visa process and engage the U.S. government to serve unabashedly as an advocate for U.S. businesses.”

Sánchez led two trade missions to Saudi Arabia last year — one focused on health-care, the other on infrastructure. And Commerce Secretary Gary Locke will lead a transportation and infrastructure mission to Qatar this coming June.

“We are not an administration that’s standing still in this important region of the world,” said Sánchez. “We listen to American businesses talk about problems they face in global markets. As international trade recovers, the U.S. govenrment will have aligned its resources to better serve the American exporting community, and to achieve the president’s goals.”

Three major oil-exporting countries — Saudi Arabia, Qatar and the United Arab Emirates — will play a central role in that endeavor, he said.

From 2000 to 2009, total trade with the UAE jumped by 300 percent, and despite the global economic slowdown, the United States continues to run a high trade surplus with that country. Sánchez said Saudi Arabia plans a massive infrastructure investment of around $400 billion to diversify the Saudi economy away from oil and focus more on education, technology and financial services.

In 2009, Saudi Arabia imported $10.8 billion worth of U.S. goods, making it this country’s 20th largest trading partners.

“U.S. companies have operated successfully in Saudi Arabia for almost 70 years, but Saudi business leaders are concerned that American firms are starting to lag behind their competitors from Asia and Europe,” he said. “The Saudis realize they can expect little or no technology transfer from the Chinese. We’re doing whatever we can to help.”

And don’t forget about tiny Qatar, the undersecretary advised his audience. The little Persian Gulf country — which will host the 2022 World Cup ¬— is expected to spend $65 billion just to prepare for the games. It recently introduced a $120 investment program to upgrade roads, port facilities and railways. As Sánchez said, “Qatar has an abundance of capital and is prepared to spend it.”

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