WASHINGTON (Reuters) – U.S. exports to Arab nations are forecast to reach a record $45 billion in 2007, shattering the previous high set last year, according to a report released on Thursday.
“We are charting new territory in America’s trade relations with the Arab world,” David Hamod, president of the National U.S.-Arab Chamber of Commerce, said in a statement.
U.S. exports to 22 Arab countries increased 28 percent in 2006 to a record $35 billion, with the United Arab Emirates and Saudi Arabia accounting for more than half of the total.
Sales vary by country, but “cyclical demand for big-ticket items is on the upswing, including civilian aircraft, military systems and border security systems,” the report said.
“The region’s consumer market is also helping to drive up U.S. export sales. Arab consumers have more disposable income than ever, and American products continue to carry significant cachet,” the report said.
High oil prices boosted the Arab world’s buying power at the same time a declining U.S. dollar made American goods more competitive, according to the report, which was prepared by the Institute for Research: Middle Eastern Policy.
Those factors helped U.S. exports to the Arab world grow rapidly, despite widespread criticism of U.S. policies in Iraq and frequent calls to boycott American products.
Tensions between the United States and Arab countries escalated after the September 11, 2001, attacks on New York and Washington, carried out mostly by Saudi militants.
Despite the forecast for U.S. exports to the region to expand nearly 30 percent this year, the Iraq war is just one of many “storm clouds” on the horizon, the report said.
“Business and political leaders are unsettled by forces that the Iraq conflict has unleashed — including the deepening schism between Sunni and Shia Muslims — and these leaders are increasingly concerned about the timing and terms of a U.S. pullout from Iraq,” the report said.
Also, the firestorm created last year by state-owned Dubai Port World’s plan to purchase port operations in the United States “was perceived in the region as xenophobic ‘Arab bashing”‘ and has accelerated a trend to look toward Asia for business partners, the report said.
Many Arab business leaders, feeling less welcome in the United States since September 11, have taken money out of United States and invested it closer to home, the report said. More than 50 percent of investment flows within the region come from other Arab countries, the report said.
But there are signs that U.S. free trade pacts with Jordan, Morocco, Bahrain and Oman are generating increased commerce. Trade between the four countries and the United States grew 32 percent in 2006, compared to 24 percent for other Arab countries, the report said.