Is Globalization Rising Once Again?
– Afshin Molavi and H.E. Thani bin Ahmed El Zeyoudi
The UAE minister for foreign trade outlines his ambitious vision for future trade growth.
The sun burned low and bright on the sea of containers at Jebel Ali Port in Dubai. The brand markers of global shipping—Maersk, COSCO, Hapag-Lloyd, Evergreen, MSC—adorned the colorful vessels. Nearby, in air-conditioned, glass-fronted offices, men and women pressed buttons and scanned the horizon, watching sky-high cranes—the steel, robotic workers of global commerce—unload containers from massive ships. Out in the distance, another hulking ship chugged toward the port, and trucks waited in a long line to receive their cargo.
It was just another day in our whirring, hyper-connected global economy.
For all those who claim that globalization is on the decline, a visit to the United Arab Emirates, possibly one of the most connected places on earth, offers another perspective. Before the COVID-19 pandemic, UAE airports handled more international air passengers than London Heathrow and New York’s JFK combined. In 2014, Dubai International Airport surpassed London Heathrow as the busiest international airport in the world and has remained at the top—even amid the pandemic’s turbulence.
Meanwhile, UAE ports handle some 2.4 percent of the world’s sea container traffic, according to UN data, and have become a key nexus point for East-West trade flows. In fact, one of the fastest growing ports in the UAE is not Jebel Ali; it is Abu Dhabi’s Khalifa port, still considerably smaller than its Dubai counterpart, but growing fast.
Beyond trade and travel, UAE companies and sovereign wealth funds have emerged as among the largest investors in the world, accounting for nearly 40 percent of all outward investment emanating from West Asia from 2016–21, according to data from the United Nations Conference on Trade and Development. With worldwide investments ranging from public equities to real estate to tech and beyond, the UAE has emerged as a major stakeholder in the global economy. UAE firms and funds have also been key investors in challenging frontier markets from Africa to the Middle East.
With less than 10 million people, the UAE accounts for more international trade than Brazil or Indonesia, both countries boasting more than 200 million people. This owes in part to years of infrastructure building and a policy that actively supports trade.
In a world of rising protectionism, the road that leads to the headquarters of DP World—the Dubai-based global ports operator—at the Jebel Ali Port is called Free Trade Avenue. As the UAE seeks to achieve its ambitious goal of doubling the size of its economy by 2030, trade will play a critical role.
I’ve been traveling to the UAE for more than two and a half decades, first as a business correspondent with Reuters in the late 1990s based in Dubai, and then as an analyst, specialist, and writer on emerging markets and the intersection between the Middle East and the global economy.
I’ve watched the ebbs and flows of the UAE story, its challenges and missteps and missed opportunities, as well as its triumphs and progress. I recently connected with UAE’s Minister of State for Foreign Trade, Thani bin Ahmed El Zeyoudi, PhD to discuss the state of UAE trade. We later engaged in written correspondence. Below is a lightly edited transcript of his comments.
Afshin Molavi: The UAE’s total trade for 2021 exceeded $770 billion and, in 2022, your non-oil foreign trade clocked in at approximately $600 billion. What are your forecasts for the next ten years? How do you expect to grow your global trade?
H.E. Thani El Zeyoudi: It was actually just over $600 billion—$607 billion to be precise—in 2022, a record for the UAE in a single year for non-oil trade. The ambition now is to push our non-oil foreign trade to $1.1 trillion by 2031, which is a reflection of how central trade is to our economic ambitions. Our Comprehensive Economic Partnership Agreement program, which seeks to develop deeper, stronger ties with strategically important allies around the world, is the cornerstone of this mission, and we have now signed deals with India, Israel, Indonesia, and Turkey, and agreed to terms with Georgia and Cambodia—a total market of around 1.8 billion people. These deals will help consolidate the UAE’s status as global trade facilitator and a key hub in East-West supply chains.
This can contribute to a new era of stability in the region and, importantly, show the benefits of putting economics before politics . -H.E. Thani El Zeyoudi
AM: We are living in a world of ever-increasing competition, complex supply chains, and growing protectionism. What are your most pressing challenges as you survey the trade landscape? By that, I mean what are the key friction points and challenges that you must overcome to meet your ambitious trade targets?
TEZ: The global trading community is facing many issues, not least the reemergence of protectionism. We are also seeing issues arising from inadequate dispute resolution mechanisms, especially when it comes to market-distorting subsidies, and the ongoing challenge of trade finance, access to which is preventing small businesses, especially those in the developing countries, from fully participating in the global trading system.
The UAE is taking an increasingly vocal role on these issues, and we are looking to foster positive outcomes in this area when we host the World Trade Organization’s 13th Ministerial Conference in February 2024. We want to use this opportunity to champion multilateralism as a means of catalyzing inclusive growth and fostering development in emerging markets, to promote rules-based trade, develop new rules for digital trade, and also to integrate technology into global supply chains.
In January, the UAE launched the Trade Tech Initiative in partnership with the World Economic Forum. It was designed to bring together nations and stakeholders in the logistics sector to transition to tech-enabled customs, data-driven supply-chains, and digitized trade finance. We believe these tools can transform the global trading system—and spur a new era of trade growth.
AM: How have the Abraham Accords boosted your trade portfolio, even beyond the obvious of growing your trade ties with Israel? Have you noted some other beneficial effects?
TEZ: The Abraham Accords have been hugely beneficial. In 2022, our non-oil trade with Israel reached $2.5 billion—a 90 percent increase on 2021—while re-exports to Israel grew 71.2 percent. We are also building research and development partnerships in key sectors such as healthcare, agri-tech, water and food security, advanced technology, and space exploration, while supporting start-ups with incubators and investment funds.
There have been other benefits for the region, too, such as a pioneering trilateral energy project between the UAE, Israel, and Jordan that will see solar power produced in Jordan traded for fresh water with Israel. This can contribute to a new era of stability in the region and, importantly, show the benefits of putting economics before politics .
AM: The UAE has signed free trade agreements with several countries in record time. Normally, they take a long time to negotiate. Why and how have you been able to push these agreements so fast?
TEZ: As we emerged from the pandemic, and reviewed its impact on growth, on supply chains, and on manufacturing, there was a realization from many countries that partnerships are better than protectionism. Our negotiations with India were concluded in less than four months, which was a clear reflection of the potential that greater economic integration would unlock, both in terms of market access but also in strengthening regional supply chains and investment networks.
AM: How do you view the I2U2 (the India, Israel, UAE, US multilateral initiative) in the context of your trade with those member countries, but also the broader world?
TEZ: The I2U2 initiative combines the knowledge and resources of the United States, India, the UAE, and Israel and channels them toward regional development objectives. We see this as a partnership that creates a nexus of economic opportunity and excellence, with a particular focus on economic cooperation and joint investments in water, renewable energy, food security, healthcare, transportation, and space.
AM: Have you noted rising protectionism among major economies?
TEZ: Protectionism has been one of the clear outgrowths of the global pandemic. But we also see re-globalization happening around the world, too, with a raft of new economic partnerships and agreements—especially in developing countries—that are driving a new era of collaboration.
The UAE has always been an outward-looking nation, and our economy will continue to draw strength from the international community. Our objective remains clear: build stronger, more meaningful ties with global partners and allies to promote peace, stability, and prosperity. As we emerge from the “triple shocks” of 2022, many countries understand the need to work together to address our most important challenges, from climate change to food security.
AM: How do you view Saudi Arabia’s efforts to grow its role as a major regional trade hub? This has generally been the role of the UAE in recent history.
TEZ: Saudi Arabia has an ambitious growth strategy and that is something we welcome. It is one of the most important economies in the region, and its development helps create opportunity across the whole of the Middle East, bringing more investment, more tourism, more trade and more focus on the region’s many capabilities.
I think we’ve seen in the last few years that pandemics and conflict can significantly damage the global economy, and the international community must continue to work together to provide practical, peaceful solutions to worldwide issues. -H.E. Thani El Zeyoudi
AM: Where are the growth areas for UAE trade?
TEZ: Exports is one area that we are looking to expand in the coming years. In 2022, the value of our non-oil exports reached around $100 billion, a new record for the UAE and up 52 percent on 2019. This is down to an ambitious expansion of our industrial sector, and we will be looking to expand opportunities for products such as iron and steel products, aluminum, polymers, and other plastics.
We also see huge areas of opportunity for our services exports. Our comprehensive economic partnership agreements are creating huge new opportunities for sectors such as financial and professional services, construction and contracting, logistics, information and communications technologies, and travel and tourism. We also want to expand our geographical reach, and by the end of the year, we will have signed agreements with nations in South-East Asia, the sub-continent, East Africa, Eastern Europe, and South America.
AM: How would you assess the UAE-US trade relationship? What are its key challenges and opportunities?
TEZ: The US is a hugely important trade partner for the UAE, and our respective leaderships understand the value of our relationship. They are our fourth-biggest trade partner, with bilateral non-oil trade touching $30 billion in 2022—an increase of 22 percent from 2021.The US also remains a global leader in tech and finance, so our partnership will be of great value as we embrace the Fourth Industrial Revolution and place advanced technology as a cornerstone of our economic development.
We see the US as a pioneer in agri-tech, food production, and the energy transition and, as we’re seeing in the I2U2 alliance, our joint capabilities can have far-reaching impact. We will continue to work together in a spirit of collaboration and shared interest.
AM: What keeps you up at night? What are the black swan–type events that you fear the most as you support the UAE’s trade portfolio?
TEZ: I think we’ve seen in the last few years that pandemics and conflict can significantly damage the global economy, and the international community must continue to work together to provide practical, peaceful solutions to worldwide issues. Climate change is another ongoing threat that we must all work harder to mitigate—and that will be the focus of COP28, which we will be hosting later this year.
That said, we have learned so many valuable lessons from the last two years that I believe we are far more resilient and far more prepared to deal with any eventuality.
H.E. Thani El Zeyoudi, PhD, is minister of state for foreign trade of the United Arab Emirates.
Afshin Molavi is senior fellow at the Foreign Policy Institute of the Johns Hopkins School of Advanced International Studies, a former Wilson Center public policy fellow, and editor of Emerging World.
cover photo: Thani bin Ahmed Al Zeyoudi, PhD, Minister of State for Foreign Trade at UAE Economy Ministry, talks during the Global Investment Forum in Dubai, United Arab Emirates, Wednesday, June 2, 2021. AP Photo/Kamran Jebreili.