Dubai: The Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union could be an added value to Dubai trade by expanding the scope and business potential with new markets, according to a study developed by Dubai Chamber of Commerce and Industry.
It is predicted that TTIP will have a positive effect on Dubai's overall trade performance, as per the report, with Dubai's vast trade network, together with its capacity to adjust quickly to changing trade barriers and regulations.
TTIP is a proposed Free Trade Agreement being negotiated since July 2013 between US and EU, accounting for almost half of the world global domestic product (GDP) and a third of international trade in general.
If this works, the largest free trade pact in the world will be formed in terms of the combined economic size, population and trade covered with substantial economic impact surpassing the geographical borders of the US and EU, the report stated.
According to Dubai Chamber experts, Dubai could even benefit from this potential change in global trade structure by re-routing excess trade flows towards new, fast growing markets, such as Sub-Saharan Africa or North African markets, which may see drops between 2-7 per cent in trade with EU as a result of TTIP.
"Non-trade sectors may also feel some heat from the likely EU-US alliance towards pushing for more compliance and transparency in banking and financial transactions involving UAE investments and managed assets in the US and Europe," the report stated.
Irfan Al Hassani, a UAE-based economist, said that UAE is a good trade partner with both US and EU and the TTIP will not affect the business relation between the emirates and these countries.
The total value of trade between the UAE and the US is estimated at $27.1 billion (Dh99.67 billion) in 2012 with imports valued at $2.3 billion, exports $22.5 billion, and re-export $2.2 billion, according to Dubai Chamber.
Comparatively, total trade value between the UAE and the EU stood at €45.4 billion (Dh227 billion) in 2012 with imports at €8.3 billion and exports at €37.1 billion.
Al Hassani added that the UAE is a competitive market and a gateway to the region, however, this alliance could strength demand on the UAE market and enhance its position as a global business hub not only for the region but also worldwide.
"If the TTIP will be successful it is predicted that a lot of businesses and investment outside this zone will be directed to UAE," he said.
GCC¡¯S FTA negotiations:
The study also noted that Gulf Cooperation Council (GCC) has started negotiations to form a free-trade agreement with the US and another with EU as talks are progressing to an advanced stage.
This will entitle easy access for UAE to these markets, according to the study.
The total value of trade between GCC and US is estimated at $130 billion in 2012, imports at $6.6 billion, exports $44.6 billion, and re-export $4 billion, according to Dubai Chamber.
Total trade between GCC and EU, meanwhile, stood at €144.6 billion last year, with imports at €61.2 billion and exports at €83.4 billion.