UAE non-oil trade with G20 countries reach $341 billion last year: Minister

Dr Thani Bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, said that trade and investment relations between the UAE and the G20 countries are strengthening.

“In 2022, non-oil trade between the two sides hit $341 billion, which is 55% of the UAE’s total non-oil trade. This represents a 21% increase from 2021, and a 56% and 34% up from 2020 and 2019, respectively,” the minister told the Emirates News Agency (WAM) in India where he is representing the UAE at the 2023 G20 New Delhi Summit.

“G20 countries are the UAE’s largest trading partners, accounting for 43% of its non-oil exports, 39% ofr e-exports, and 67% of imports,” the minister explained.

“These strong trade and investment relations are a testament to the UAE’s commitment to open and free trade. The UAE is a major player in the global economy, and it is working to strengthen its ties with other countries around the world.”

Al Zeyoudi noted that the UAE’s non-oil trade with the G20 countries grew significantly in 2022, up 56% from 2020 and 34% from 2019. “This upward trajectory continued in the first half of 2023, with non-oil trade reaching $181.9 billion, up 14.4% from the same period in 2022.

“The UAE’s non-oil exports to G20 countries grew by 10.6% in the first half of 2023, reaching a total of $23.4 billion. The value of re-exports to these countries also rose by 14% to $38 billion. The imports increased by 15.2% to $120.5 billion.”

The UAE’s investment relations with G20 countries, the minister continued, are booming, with the total balance of direct Emirati investments in these countries reaching more than $215 billion by the end of 2021. This represents 92.5% of all Emirati investments worldwide.

“The total investment balance of G20 countries in the UAE is also significant, reaching more than $74.2 billion, accounting for 43.3% of all foreign direct investment (FDI) into the UAE.”

The minister said that the UAE’s invitation to the G20 Summit is a recognition of its status as a major economic player, a key partner in the global trading system and a responsible global citizen. He, in this regard, highlighted the UAE’s as a major gateway for the flow of goods and services, and an effective member of the international community.Al Zeyoudi reiterated the UAE’s commitment to ensuring equitable, inclusive access to the global trading system for the nations of the Global South, underscoring the role of trade as a catalyst for industrial productivity, job creation and knowledge-sharing.

He further stressed the importance of cross-border cooperation in building resilience across global value chains, underlining the need to enhance the participation of small and medium sized businesses and encourage diversification of import sources, especially for critical sectors.

Meanwhile, the global trade finance gap grew to a record $2.5 trillion in 2022 from $1.7 trillion two years earlier, as rising interest rates, flagging economic prospects, inflation, and geopolitical volatility reduced the capacity of banks to deliver trade financing, according to the 2023 Trade Finance Gaps, Growth and Jobs Survey released today by the Asian Development Bank (ADB).

The trade finance gap is the difference between requests and approvals for financing to support imports and exports. Rebounding strongly after the COVID-19 pandemic, global goods exports grew in 2021 and 2022 at 26.6% and 11.5%, respectively. Demand for trade finance surged on the back of this sharp recovery but heightened economic risks made finance more difficult to secure than before, the survey indicates. Following a zero-growth rate during the last quarter of 2022, as of April 2023, global trade exports in value slowed year-to-date, showing a decline of around 3%.

The survey is the world’s leading barometer of trade finance health. It includes data from 137 banks and 185 companies from around 50 countries. Respondents said they faced continued constraints in 2022 due to rising interest rates and financial market uncertainties, set against the backdrop of a global economic slowdown, and geopolitical instability.

“The global trade finance funding gap has now widened to well over $2 trillion, as the global economy still struggles to rebound from the pandemic,” said ADB’s Director General for Private Sector Operations Suzanne Gaboury. “That growing gap strangles the potential of trade to deliver critical human and economic development through jobs and growth.”

Around 60% of responding banks reported that the Russian invasion of Ukraine impacted their trade finance portfolios due to growing geopolitical uncertainty and increased commodity prices.

For the first time, the 2023 trade gaps survey focuses on environmental, social, and governance (ESG) issues, along with digitalization, in a bid to assess their impact on relevant supply chains and the trade finance gap. The majority of banks and companies that took part in the survey believe that ESG alignment could potentially help reduce the trade financing gap.

The top supply chain challenge cited by firms surveyed was insufficient financing. They identified access to adequate financing, reliable logistics, and the use of digital technology as the three most important components of resilient supply chains.

Backed by ADB’s AAA credit rating, the Trade and Supply Chain Finance Program (TSCFP) provides loans and guarantees to more than 200 partner banks to support trade, boosting imports and exports that foster growth. Since 2009, the TSCFP has supported $57 billion in trade across 45,510 transactions in markets where the private sector finds it challenging to operate. TSCFP is working to make global trade and supply chains green, resilient, inclusive, and socially responsible.

WAM