Thursday, October 25, 2012

Container Shipping and Multimodal Freight Help UAE to Quadruple Average Trade Growth

Seminar Reviews Changes plus Finance and Impediments to Foreign Business
Shipping News Feature

UAE - The United Arab Emirates has taken huge strides in recent years to turn itself into a major international trade hub. The point was certainly well made at the recent three-day trade facilitation seminar in Dubai where delegates were told the UAE had seen its foreign trade grow to just over $250 billion in 2011 - four times the world average. This 23% increase in growth was achieved despite the global economic slowdown and existing impediments, causing the seminar to reflect on the availability of finance and how the changing face of logistics, with the introduction and expansion of multimodal freight options, expanding container shipping opportunities etc.,had influenced and accelerated the development process.

Of course international trade would be almost impossible to prosecute successfully without the business clout and expertise offered by the major banks. Some of them, based in the UAE and throughout the Middle East, are well-known multinationals with long associations with the region, some even going back to the last century. Over that time the banks have taken big risks and made huge profits as a result, often built on the back of historic trading links. Today, the shipping guarantee from HSBC, the documentary credits and export loans provided by Barclays, or the cash flow boost which comes through the factoring facilities offered by Emirates NBD are just some of the vital import and export services offered by such banks which help international trade to flourish.

But with financial innovation has come those parallel developments in such areas as ship building and logistics, communication satellites and navigation, international law and reduced trade barriers. A good example is containerization, the modern form of which first appeared on the scene more than 50 years ago. Now no one gives the idea of “intermodalism” – same container, same cargo, differing forms of transport – even a cursory thought. Yet being able to seamlessly transport goods via ship, train and truck has revolutionised cargo handling and international trade and simplified the whole logistics industry.

The seminar, which was attended by the representatives of 12 Arab countries and various international organizations, discussed a number of working papers and proposals for the easing of trade channels and trade exchange mechanisms.

Juma Al Kait, Assistant Undersecretary for Foreign Trade Affairs at the UAE's Ministry of Foreign Trade, told delegates there were still impediments to trade represented in the insufficient administration and organization of trade exchange activities, such as the presence of complicated customs regulations, transit requirements, standardization requirements, quality assurance requirements, and more specifically, the presence of non-transparent requirements that didn't serve their declared purpose of protecting the consumer and public safety.

He said global economic integration had changed the nature of national markets as companies sought to establish headquarters in locations that provided them with facilitations such as production inputs availability, export channels and freedom of movement so they could serve their customers in a timely manner.

Administrative and border barriers to the movement of goods had become an important factor in the investment decision making process of corporations. Plans and economic development opportunities of countries, especially developing ones, had become tied to the policies that eased trade and transit.

Mr Al Kait said the UAE had been able, in a record time, to take long strides in economic development and in transforming itself into one of the region’s and world’s most important trade hubs. The UAE had, from the beginning, placed a big emphasis on trade development and was always careful to make trade a primary economic engine away from its sole source of wealth.

The UAE, he added, had reduced its customs and non-customs trade barriers and worked on easing trade through adopting best international customs and border procedures practices and using the best technical applications and communications to serve the flow of trade through its border.

Photo:- The UAE Seminar on Trade Facilitation full details of which can be seen HERE.