WORLD  TRADE  
ORGANIZATION  RESTRICTED 
WT/TPR/S/262 
21 February 2012  
 
(12-0917) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
UNITED ARAB EMIRATES 
 
 
 
 
This report, prepared for the second Trade Policy Review of the United Arab Emirates, has been drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (A nnex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from the United 
Arab Emirates on its trade policies and practices.  Any technical questions arising from this report may be addressed to 
Mr. Angelo Silvy (tel:  022 739 5249), Mrs. Mena H assan (tel:  022 739 6522), 
and Mrs. Eugenia Lizano (tel:  022 739 6578). 
 
Document WT/TPR/G/262 contains the policy statement submitted by the United Arab Emirates.  
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Revi ew Body on the United Arab Emirates. United Arab Emirates WT/TPR/S/262 
 Page iii 
 
 
CONTENTS 
  Page 
SUMMARY   vii 
 (1) E CONOMIC ENVIRONMENT  vii 
 (2) T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  viii 
 (3) T RADE POLICIES AND PRACTICES BY MEASURE  viii 
 (4) T RADE POLICIES BY SECTOR  x 
I. ECONOMIC ENVIRONMENT 1 
 (1) O VERVIEW  1 
 (2) S TRUCTURE OF THE ECONOMY  1 
 (3) O UTPUT , PRICES , AND EMPLOYMENT  5 
 (4) M ONETARY POLICY AND EXCHANGE RATE REGIME  6 
 (5) F ISCAL POLICY  8 
 (6) B ALANCE OF PAYMENTS  9 
 (7) D EVELOPMENTS IN TRADE  10 
 (i) Composition of trade in goods 10  (ii) Direction of trade 11 
 (iii) Trade in services 12 
 (8) D
EVELOPMENTS IN FOREIGN INVESTMENT  12 
 (9) O UTLOOK  12 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 14 
 (1) I NTRODUCTION  14 
 (2) G ENERAL CONSTITUTIONAL AND LEGAL FRAMEWORK  14 
 (3) D EVELOPMENT AND ADMINISTRATION OF TRADE POLICY  16 
 (i) Agencies involved in trade policy implementation 16 
 (ii) Main trade laws 17 
 (4) T RADE POLICY OBJECTIVES  18 
 (i) General trade policy objectives 18 
 (5) T RADE AGREEMENTS AND ARRANGEMENTS  19 
 (i) Participation in the WTO 19  (ii) Preferential tr ade agreements 20 
 (6) F
OREIGN INVESTMENT REGIME  24 
III. TRADE POLICIES AND PRACTICES BY MEASURE 28 
 (1) I NTRODUCTION  28 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  29 
 (i) Customs procedures 29  (ii) Customs valuation and rules of origin 33 WT/TPR/S/262 Trade Policy Review 
Page iv 
  
  Page 
 
 (iii) Rules of origin 34 
 (iv) Tariffs 34  (v) Other charges affecting imports 38 
 (vi) Import prohibitions, restrictions, and licensing 38 
 (vii) Import-related operations of state enterprises 40  (viii) Contingency measures 40 
 (ix) Standards and other technical requirements 41 
 (x) Sanitary and phytosanitary requirements 44 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  46 
 (i) Procedures 46 
 (ii) Export taxes, charges and levies 47  (iii) Export prohibitions, re strictions, and licensing 47 
 (iv) Export support 47 
 (v) Export finance, insurance, and guarantees 48  (vi) Export promotion and marketing assistance 49 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  49 
 (i) Incentives 49 
 (ii) Role of state-owned ente rprises, and privatization 50 
 (iii) Competition policy and regulatory issues 51  (iv) Government procurement 51 
 (v) Intellectual property rights 55 
IV. TRADE POLICIES BY SECTOR 60 
 (1) I
NTRODUCTION  60 
 (2) A GRICULTURE  61 
 (i) Features 61  (ii) Policy objectives for the sector 63 
 (iii) Fisheries 64 
 (3) M
ANUFACTURING  64 
 (i) Features 64 
 (ii) Legal framework and policy objectives for the sector 65 
 (iii) Selected industries 66 
 (4) E NERGY AND WATER  67 
 (i) Petroleum 67 
 (ii) Natural gas 70  (iii) Electricity and water 72 
 (5) S
ERVICES  73 
 (i) Financial services 73 
 (ii) Telecommunications and postal services 82 
 (iii) Transport 85  (iv) Tourism 92 
 (v) Construction services 94 
 (vi) Trade in business an d professional services 96 
REFERENCES   99 
APPENDIX TABLES  101 
 United Arab Emirates WT/TPR/S/262 
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CHARTS 
  Page 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Frequency distribution of applied MFN tariff rates, 2011 36 
III.2 Frequency distribution of bound tariffs 37  
TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Economic indicators, 2005-10 2 I.2 Balance of payments, 2005-10 9 
I.3 Foreign direct investment stock by economic sector, 2005-09 12 
 II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
 
II.1 Main federal trade-related laws in the UAE, 2011 17 
II.2 UAE's notifications to the WTO, January 2005 to October 2011 19 
II.3 Trade under preferen tial agreements, 2010 20 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 III.1 Goods that may be imported under temporary admission, 2011 32 
III.2 UAE's preferential rules of origin, 2011 34 
III.3 Structure of MFN tariffs, 2011 35 III.4 Summary analysis of MFN tariff, 2011 35 
III.5 Prohibited goods in UAE, 2011        39 
III.6 Rules and regulations related to SPS issues 45 
III.7 Protected works under the Copyright and Neighbouring Rights Law, 2011 57 
III.8 Protection of neighbouring rights, 2011 57 
III.9 Signs that may not be registered  as a trademark in the UAE, 2011 58 
 
IV. TRADE POLICIES BY SECTOR 
 IV.1 Agricultural and livestock production, 2005-10      62 
IV.2 Manufacturing output by activity, 2007-10       64 
IV.3 Basic data on the petroleum subsector, 2006-10      68 
IV.4 Abu Dhabi National Oil Company activities, 2011      69 
IV.5 Gas production and utilization, 2006-10       71 IV.6 Selected monetary and banking indicators, 2006 to September 2011    75 
IV.7 UAE securities market, July 2011        78 
IV.8 Insurance premiums and claims, 2010       80 IV.9 Telecommunications indicators, 2007 to March 2011      83 
IV.10 Hotel indicators, 2000, 2005, and 2010       93 WT/TPR/S/262 Trade Policy Review 
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APPENDIX TABLES 
  Page 
I. ECONOMIC ENVIRONMENT 
 AI.1 Structure of exports, including re-exports, 2005-10      103 
AI.2 Structure of imports, 2005-10        105 
AI.3 Destinations of exports, including re-exports, 2005-10     107 AI.4 Origins of imports, 2005-10        108 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
AIII.1 Applied MFN tariff averages by HS2, 2011       109 
 
 United Arab Emirates WT/TPR/S/262
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SUMMARY 
1. The UAE's trade regime is open, with low tariffs and few non-tariff barriers to trade.  The 
UAE's openness was instrumental to achieving the solid growth registered prior to the global crisis 
and has facilitated the diversification of econom ic activity.  The investment regime remains 
considerably more restrictive than the trade regime , as foreign participation in any domestic company 
or activity is limited to 49% of the capital;  howev er, 100% foreign ownership is  allowed in any of the 
UAE's free zones.   
2. The global financial crisis brought an end to  a period of rapid growth.  The economy 
contracted in 2009, and grew by just 1.4% (total r eal GDP) in 2010.  In the aftermath of the crisis, 
GDP growth was affected by lower oil prices, turmoil in the financial markets, particularly in Dubai's 
financial sector, and a price correction in the Dubai property market.  As a response to the crisis, the authorities supported banks by providing li quidity and deposit guarantees, and through 
recapitalization. 
(1) E
CONOMIC ENVIRONMENT  
3. The UAE's economic performance was very strong over the period 2005-08, achieving an 
annual average growth rate of 5.5%.  Growth was b ased to a large extent on a successful strategy of 
diversification, into services, real estate, and manufacturing.  Non-hydrocarbon GDP growth was 
particularly high and made possible by a policy to promote investment.  The global financial crisis 
combined with lower oil prices and the price correcti on in the Dubai real estate market brought an end 
to this period of high growth, and the economy of the UAE contracted by 1.6% in 2009.  The crisis 
led to an increase in debt, particularly of D ubai's government-related enterprises (GREs).   
4. Reacting to the crisis, the Federal Government  applied strong countercyclical monetary and 
fiscal policies and adopted rescue packages for GREs, including an important debt restructuring.  The 
UAE economy started to emerge from the crisis in 2010, with real GDP growing by 1.4%.  The global 
crisis had the effect of cooling off the economy, stopping the acceleration in price increases observed 
in the 2005-08 period.  However, as growth resum es, inflation is forecast to accelerate somewhat, 
although to below the pre-crisis levels. 
5. Departing from a situation of traditional surplu s, as a result of the crisis and of the 
expansionary fiscal policy adopted, the Federal Government ran fiscal deficits in 2009 and 2010.  The 
authorities have been taking steps to reduce this de ficit by containing the growth of spending, and 
reducing producer subsidies and transfers.  Howeve r, stronger efforts might be needed to achieve 
fiscal consolidation.   
6. Exports of goods increased rapidly throughout 2 006-08, but declined by some 17% in 2009, 
reflecting lower oil prices and the global economic cr isis.  Imports followed a similar pattern, but both 
exports and imports started to recover in 2010 as grow th picked up.  The UAE runs a structural trade 
balance surplus, which peaked at US$62.9 billion in  2008, declined in 2009 as a consequence of a 
considerable drop in oil exports and despite a re duction in imports, and increased again in 2010 and 
2011, mainly due to higher non-hydrocarbon exports and re-exports.  The surplus in the current 
account balance reached 3.8% of GDP in 2010. WT/TPR/S/262 Trade Policy Review 
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(2) TRADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
7. The UAE has a liberal trade regime, although a number of limitations and conditions are set 
on foreign investment.  Improved market ac cess for its products through multilateral trade 
liberalization and bilateral and regional trade agre ements is a main trade policy objective.  Policy 
formulation and implementation in the UAE takes place both at the fe deral and the emirate level;  the 
emirates have a relatively high degree of independence. 
8. The UAE has been an active player in the Doha Development Agenda, presenting proposals 
to eliminate tariffs and non-tariff barriers (NTBs)  on raw materials and submitting an initial offer in 
trade in services.  The UAE has not been involved in any dispute settlement case during the period 
under review. 
9. The UAE attaches great importance to regional trade agreements as a valuable complement 
to, though not a substitute for, a rule-based and non-discriminatory multilateral trade system.  The 
UAE is a founding member of the Gulf Cooperati on Council (GCC).  During the period under review, 
the UAE has advanced in the process of regional inte gration, through its participation in the GCC.  
However, the full consolidation of the GCC's customs union was still pending in mid-2011, and was 
expected for the end of the year.  Free-trade agreements between the GCC and EFTA, and the GCC 
and Singapore have been signed, but in late 2011,  were still awaiting implementation.  The UAE is 
also a member of the Pan Arab Free Trade Agreement (PAFTA).   
10. The UAE's open trade regime contrasts with its re latively more closed investment regime.  An 
important development during the period under review , has been the initiation of drafting of a new 
Investment Law to expand foreign participation and foster foreign investment and transfer of know-
how.  However, foreign investment continues to be  subject to limitations, and all investment projects 
must have 51% domestic capital.  In addition, th e use of local agents to conduct business continues to 
be mandatory, and although legislation to enfor ce agency contracts was amended during the review 
period, it is still skewed in favour of the agent, as the termination of a contract by the investor is 
difficult. 
(3) TRADE POLICIES AND PRACTICES BY MEASURE  
11. Since its previous Review in 2006, the United Arab Emirates has streamlined procedures to 
process documents and reduced the time required to clear Customs, mainly by introducing totally 
electronic clearance procedures and a risk assessmen t system.  Nevertheless, the UAE still requires 
that imports be processed by a designated trade agent,  and nationality restrictions are applied in this 
respect.  A trade agent requires a trading licence, gr anted only to UAE nationals and to companies that 
are at least 51% owned by UAE nationals. 
12. The UAE has applied the Gulf Cooperation Co uncil's (GCC) Common External Tariff since 
2003.  The tariff structure comprises four ad valorem  tariff rates:  zero, 5%, which is the general tariff 
rate, and 50% and 100%, app lied on alcohol and tobacco, respectively.  Some 97% of all tariff lines 
are ad valorem ;  duties are levied on the c.i.f. value of im ports.  Alternate or specific duties apply to 
0.3% of all tariff lines.  Since the last Review of the UAE, the average tariff rate has fallen slightly, from 5.1%, to 4.9%.  The UAE has bound all tariff lines.  Bound rates are in general considerably higher than applied rates, ranging from zero to 200% , giving scope for reduction.  The UAE does not 
apply other duties and charges on imports. United Arab Emirates WT/TPR/S/262
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13. Import prohibitions are in place on some 30 HS  tariff lines, and another 244 lines at the 
HS 8-digit level are considered restricted goods.  Restrictions and prohibitions are mostly applied on 
safety, religious or moral grounds.  No import licen sing regime is in place, and the transaction value 
of goods is generally used for valuation purposes.   
14. In 2005 the UAE issued national legislation to adopt and implement the provisions on anti-
dumping, countervailing, and safeguards measures cont ained in the GCC Treaty.  No anti-dumping or 
countervailing measures were taken dur ing the period under review;  no i nvestigations were initiated.   
15. The Emirates Standardizati on and Metrology Authority (E SMA) develops and adopts 
standards, which are prepared by its technical co mmittees at the request of the Government, industry, 
or consumers.  In general, standards are devel oped according to existing international and regional 
standards.  Drafts are circulated to the relevant  bodies for comments.  There is no central body in 
charge of preparing technical regulations in the UAE.  These may be developed by the ESMA, 
initially in the form of a standard and then made mand atory, or may be devised directly by a Ministry;  
all technical regulations are approved by Cabine t decision for legal implementation.  The ESMA 
monitors the application of standards and techni cal regulations.  During the period under review, the 
UAE made over 90 notifications to the TBT Committee. 
16. The UAE has an extensive body of national legi slation to regulate SPS measures;  most of the 
laws are based on GCC standards.  SPS measures are en forced at the federal and the emirate level.  
All plants and plant products entering the UAE are subject to quarantine, and require a phytosanitary certificate.  Similarly all animals and animal produc ts are subject to quarantine and require a sanitary 
certificate.  All shipments of food are inspected to ensure compliance with labelling and shelf-life 
regulations. 
17. The UAE does not apply export taxes, charges, and levies, other than a tax on steel scrap 
exports.  Exports of dual-use goods require a licence.  The UAE applies a number of programmes to promote exports, including a Free Trade Zones (FTZ) programme.  Foreig n ownership in firms 
established in FTZs may be up to 100% and investors are exempt from paying personal income taxes 
and corporate taxes for 15 years, renewable for an  additional 15 years.  A dditionally, goods may be 
imported into a FTZ duty free.  Companies located in the FTZs are exempted from agency/distributorship, sponsorship, and national ownership requirements.  FTZs produce both goods 
and provide services. 
18. There is no competition policy legislation in the UAE, but a draft competition law, including 
restrictive agreements, abuse of a dominant position, and mergers and acquisitions, is under 
consideration by the Ministerial Cabinet.  The economy would benefit from the adoption of a 
competition law given the relative concentrati on of producers/suppliers in some sectors. 
19. The UAE is not a party or an observer to the WTO Plurilateral Agreement on Government 
Procurement.  Government proc urement continues to give preference to local companies and 
suppliers, as foreign participation is  limited by nationality requirements.  However, there is a strong 
reliance on foreign companies, particularly for major projects for which local expertise is not always available.  An offset programme is in place for de fence contracts.  Given the federal nature of the 
UAE, the majority of procurement (by value) is at the emirate level. WT/TPR/S/262 Trade Policy Review 
Page x 
  
20. All main intellectual property laws provide fo r measures aimed at preventing violation of 
intellectual property rights, including preventive sei zure, confiscation, removal or destruction of 
products and equipment, as well as elimination of th e effects of the illegal acts, and compensation, 
and imprisonment in certain instances.  In recent years, the UAE has implemented programmes to 
increase awareness regarding intellectual property protec tion.  The goal is to establish an environment 
that promotes innovation, to attract investment in intellectual-property-related areas in the UAE. 
(4) TRADE POLICIES BY SECTOR  
21. The oil sector and connected industries continue to play a major role in the UAE economy.  
However, attempts are under way to diversif y the economy, particularly into services and 
manufacturing.  The petroleum sector accounted for 29% of GDP, 69% of government income, and 
85% of export revenues in 2009.  The UAE's estimates of proven crude oil reserves are 97.8 billion barrels, equivalent to almost 8.5% of the worl d's reserves, while production reached 2.32 million 
barrels/per day in 2010.  Some 95% of all petr oleum production is in the emirate of Abu Dhabi. 
22. In accordance with the Constitutio n, management of natural res ources in the UAE is vested in 
each individual emirate and not with the Federal Government.  Foreign equity in projects is 
determined by the competent authorities of the lo cal government of the emirate where the natural 
resource is located. 
23. Agriculture represents a small share of the UAE 's economy, accounting for just 1% of GDP.  
Total cultivated land has decreased in recent years, and the UAE remains a major net food importer.  
Foreigners, other than GCC nationals, are not allo wed to own agricultural land in the UAE, but may 
own up to a 49% stake in agri-business companies.  Fishing is restricted to UAE and GCC nationals.  
Notifications to the WTO on agriculture  remained pending in December 2011. 
24. In its quest to diversify the economy away fro m oil, during the period under review, the UAE 
has continued to develop its manufacturing sector.  However, some of the main manufacturing industries, such as petrochemicals, remain linked to the oil industry.  Nevertheless, there have been 
important developments in aluminium production and pharmaceutical products.  Most manufactured 
imports face a 5% tariff.  However, all material s that are used in the production of a licensed 
industrial project enter the UAE duty free. 
25. The services sector is growing rapidly, particularly in air and maritime transport, 
telecommunications, and tourism.  However, devel opments in the sector would benefit in general 
from some flexibility of the foreign investme nt ownership limitations currently in place. 
26. In financial services, the emirate of Dubai was particularly affected by the global financial 
and economic crisis.  There was a sharp contracti on in equity markets in 2008 and 2009;  market 
capitalization, and the general share price index continued falling in 2010.  The authorities responded 
to the crisis by stepping up regulation, including raising minimum capital adequacy ratios for banks, 
which were raised from 10% to 12% in 2010, and by pumping liquidity into the system and 
recapitalizing banks.  Other measures adopted to count er the financial crisis included a moratorium on 
new licences for commercial banks and placing a limit on the number of branches permitted to 
licensed foreign banks.  Currently, locally incorporat ed banks in the UAE are well capitalized, with a 
minimum capital-adequacy ratio well above the lega l requirement, at an average of 21.2% at end-
September 2011. United Arab Emirates WT/TPR/S/262
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27. Foreign banks must open branches in the UAE to provide services there;  since 2010, the 
number of branches they may open has been limited to a maximum of eight branches in the UAE.  
Subsidiaries of foreign banks are prohibited.  Fore ign banks are granted nati onal treatment for paid-up 
capital requirements, but not with respect to the taxa tion of profits: foreign banks are subject to a 20% 
tax on profits, but this is no t applied to national banks. 
28. National and foreign insurance companies wishing to establish in an emirate must apply to the 
Insurance Authority for an establishment procedure, then for licensing.  Conditions for the granting of 
licences include economic needs criteria and the appointment of a minimum number of UAE nationals as staff.  Eligible foreign insurance co mpanies may open a branch, appoint a local insurance 
agent and/or enter into an agency contract with a local insurance agent representing them. 
29. A major development in the telecommunications sector during the review period was the 
termination of the monopoly in telephony services.  However, competition in the sector remains low;  
there is a duopoly in mobile telephony, which resu lt in relatively high prices.  The market could 
benefit from increased competition in the sector. 
30. The UAE has one of the largest air transport industr ies in the world.  It has five airlines, two 
of which are major international carriers, and two majo r airports, one of which is one of the busiest in 
the world (Dubai).  The airline industry in the UAE benefits from the country’s “open skies” policy, 
good civil aviation infrastructure, and competition betw een the different emirat es.  The authorities are 
expecting the sector to continue to grow rapidly in the near future.  For this expansion, both main 
airports and airlines need to exploit their roles as hubs and transfer carri ers, due to the UAE's 
relatively small domestic market. 
31. There are plans to increase the capacity and ac tivities of ports.  However, despite the policy of 
granting concessions to private service providers in some areas, port management remains a prerogative of the different emirates.  Like in othe r service areas, despite coordination to some extent 
at the federal level, the fact that each emirate has policies in the same area could lead to overcapacity.  
Further coordination among emirates could ensure that investment projects are complementary and 
lead to a more integrated development policy approach. 
32. Prior to the 2008-09 global financial crisis , the UAE underwent a construction boom, which 
helped sustain the emergence of c onglomerates in this sector.  However, in the aftermath of the crisis, 
the construction sector suffered a major downturn, with prices falling by 50% in Dubai and 40% in 
Abu Dhabi.  The impact of the crisis was exacerba ted by the large number of new units on the market 
resulting from the boom.  
33. Tourism is of growing importance in the UAE, in  particular considering efforts displayed to 
build infrastructure and the various developments in the area.  In 2008, the National Council for 
Tourism and Antiquities (NCTA) was established to help align UAE tourism- related policies at the 
federal level.  However, each emirate issues tourism licences.  The creation of the NCTA is expected 
to give further impetus to the promotion of tourism.