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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. The emirate governments have invested large amounts of oil resources over the past 30 years 
to diversify their economies. In manufacturing, th ese resources were initially invested in state-owned 
companies operating in oil and gas-intensive industries, reflecting the country's comparative 
advantages. 
2. Joint-ventures and partnerships with fo reign enterprises have allowed manufacturing 
companies to benefit from the most up-to-date technologies.   Some have emerged as world leaders in their markets.  The manufacturing sector has recen tly diversified towards more capital-intensive, 
high-technology products, such as electronics and m achinery, exported in large part from the free 
zones, which have modern production and trade infrastructure.    
3. Soon after independence, the UAE leadership set  as a strategic policy to become a major 
transport hub between Europe and South-East Asia .  The instruments to achieve this aim have 
included vast amounts of public funds invested in de veloping port and airport infrastructure, airlines, 
and shipping companies and agencies.  As a resu lt, several UAE transport companies now also 
compete effectively on world markets.  In parallel,   tourism has been targeted as a major source of 
future growth in the UAE;  tourism in the UAE is now among the fastest growing subsectors.  
4. The UAE still depends on crude oil and gas exports for a significant share of its national 
income.  The entire oil and gas sector, as well as electricity and water utilities, remains state 
controlled, with foreign particip ation generally in the form of minority partnerships or through 
concessions.   Remarkable advances have been made in the agriculture sector, at high cost, including 
in terms of water depletion, whereas the fisheries subsector suffers from the consequences of past 
over-fishing.   
(2) A
GRICULTURE AND RELATED ACTIVITIES  
(i) Main features 
5. The UAE's main agricultural products include  dates, green fodder, vegetables, and fruit 
(mainly citrus and mangoes) (Table IV.1).  The sector also produces livestock  (goats, sheep, camels, 
cows, and horses) as well as meat and poultry, eggs, and milk;  the UAE is one of the world's top breeding centres for Arabian horses. The annual produc tion of fish is estimated at 95,000 tonnes.
1  
The UAE is 100% self-sufficient in dates and fish, 83% in fresh milk, 50% in vegetables, 38% in eggs, 28% in meat, and 18% in poultry.    
6. Agriculture, including farming, livestock, for estry, and fishing, and certain agri-industries 
benefit from considerable state assistance. None theless, production of agricultural raw materials 
remains limited and the agri-industries rely largely on  imports for their inputs.  Total value added in 
the sector was estimated at US$2.5 billion in 2003.  Most agricultural activities take place in the 
emirate of Abu Dhabi.  Farming generally tak es place on small units.  In addition, substantial 
processing activities take place in the free zones,  particularly Dubai's Jebel Ali Free Zone 
(Chart IV.1).   
                                                     
 
1 Ministry of Agriculture and Fisheries online information. Available at:  
http://www.uae.gov.ae/uaeagri cent/STATISTICS/publicdata2002.htm [22 September 2005].  United Arab Emirates WT/TPR/S/162 
 Page 45 
 
 
Table IV.1 
Main agricultural products, 1998-04 
(US$ million) 
 1998 1999 2000 2001 2002 2003 2004 
Trade balance of agricultural products -1,696 -1,782 -1,878 -2,086 -2,242 -2,884 ..  
Total imports 2,417 2,632 2,700 3,092 3,387 3,895  
Pistachios 0 0 0 0 60 303 .. 
Cigarettes 231 213 267 310 172 262 .. 
Milled paddy rice 177 214 163 195 207 248 .. 
Horses 1 1 1 206 9 200 ..
Sugar refined 43 52 99 210 175 172 ..
Chicken meat 138 110 93 147 133 146 ..
Oil of palm 82 88 90 90 30 143 ..
Food, prepared n.e.s. 87 78 103 108 167 135 .. 
Maize 15 8 9 35 12 99 .. 
Wheat 135 180 229 260 114 95 .. 
Distilled alcoholic beverages 51 55 78 60 12 94 ..
Tea 210 152 147 102 150 84 ..
Dry whole cow's milk 41 36 41 49 72 73 ..
Chocolate products n.e.s. 54 52 56 41 73 65 .. 
Pastry 52 35 34 47 42 63 .. 
Whole milk, evaporated 50 54 55 46 49 52 ..
Mutton and lamb 47 34 36 32 72 51 ..
Almonds, shelled 24 22 33 35 41 50 ..
Spices n.e.s. 12 14 25 35 30 49 .. 
Cheese (whole cow's milk) 29 56 54 42 44 44 .. 
Sugar, raw 93 69 67 41 56 33 .. 
Total exports 721 850 823 1,006 1,146 1,011  
Cigarettes 250 245 168 168 275 259 .. 
Horses 0 0 0 119 0 141 ..
Bananas 22 18 15 19 4 55 ..
Milled paddy rice 15 35 31 58 82 54 ..
Sugar, refined 51 39 95 53 83 53 ..
Tea 9 12 25 40 54 25 ..
Flour of wheat 16 37 38 23 42 22 .. 
Chocolate products n.e.s. 3 5 19 31 5 21 .. 
Pastry 15 9 18 32 29 19 .. 
Fruit juice n.e.s. 5 2 3 16 3 17 ..
Sugar (centrifugal, raw) 22 59 40 26 31 16 ..
Cotton lint 0 0 0 16 13 16 ..
Dates 9 39 60 42 46 6 .. 
Production        
Crops and livestock, primary ('000 tonnes)        
Dates 290 536 758 758 758 758 760 
Tomatoes 743 1,157 946 331 231 134 240 
Camel's milk 29 31 33 35 37 39 39 
Goat's milk 26 28 30 31 33 35 35 
Poultry meat 26 29 27 28 29 41 30 
Eggplants 24 26 14 20 18 14 20 
Hen's eggs (million egg) 252 236 266 305 322 304 17 
Citrus fruit, total 26 24 23 22 21 16 16 
Onions + shallots, green 16 20 83 34 13 16 16 
Camel meat 12 12 13 14 15 15 15 
Cabbages 31 54 294 28 30 14 15 
Cucumbers and gherkins 15 17 37 24 26 11 15 
Fruit juice n.e.s. 7 7 5 7 10 13 13 
Sheep's milk 9 9 10 10 11 12 12 
Cow's milk, whole, fresh 9 9 10 10 11 11 12 
Lemons and limes 20 18 17 16 15 11 11 
Goat meat 7 8 8 9 11 10 10 
Cauliflower 19 20 23 13 13 6 10 
Carrots 2 2 2 2 2 1 2 
     Table IV.1 (cont'd) WT/TPR/S/162 Trade Policy Review 
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 1998 1999 2000 2001 2002 2003 2004 
Live animals ('000)        
Goats  1,128 1,207 1,279 1,355 1,430 1,495 1,450 
Sheep  437 467 495 525 554 583 590 
Camels  194 207 220 233 246 259 250 
Cattle  85 91 96 102 107 113 115 
Chickens  11 13 12 12 12 18 13 
Horses  325 330 350 370 370 380 380 
.. Not available.  
n.e.s. Not elsewhere specified. 
Source:  FAO online information.  Available at:  http://www.fao.org/es/ess/toptrade/tr ade.asp,  and data  provided by the 
 authorities.   
-2,000-1,500-1,000-50005001,0001,500
I
 Live animals; animal
productsII
 Vegetable productsIII
 Animal and vegetable
fats, oils and waxesIV
 Prepared foodstuffs,
beverages and tobaccoChart IV.1
Agri-food trade, by HS section, 2003
US$ million
Source: Central Bank of the United Arab Emirates, Statistical Bulletin , various issues. Available at: http://www.cbuae. 
gov.ae/statistical_bulletin.htm Exports
ImportsRe-exports
Free-zone imports (JAFZA)Free-zone exports (JAFZA)
 
7. In 2004, total domestic imports of agri-food products were estimated at US$3.9 billion;  in 
addition, imports by the free zones slightly exceed ed US$1 billion.  Total agricultural exports by 
companies outside the free zones were US$450 milli on, and US$1.1 billion were exported by the free 
zones.  Re-exports were valued at US$1 billion.  Main imports include cigarettes, horses (reflecting 
the important breeding and horse racing activity), sugar, chicken, and oil.  There are also sizeable imports of raw agricultural products (e.g. tobacco leaves) for re-exportation after their processing in 
the free zones (Chart IV.1).  The main exports  are cigarettes, race horses, sugar confectionery, 
miscellaneous edible preparations, animal or vegetable fats and oils , products of the milling industry, 
and vegetables.  The main markets for the UAE's  exports of agri-food products are other GCC 
members, Iran, Pakistan, EU countries, and the United States. United Arab Emirates WT/TPR/S/162 
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8. Water scarcity and high salt content, poor soil quality, and hot and arid  climatic conditions 
negatively affect UAE's agriculture.  According to the Ministry of Agricultu re and Fisheries (MAF) 
and the Ministry of Economy and Planning2, total water withdrawal massively exceeds groundwater 
recharged from rain, with depletion estimated at 2,126 million m³/year.3  Agricultural water 
withdrawal for crops was estimated at about 1, 914 million m³/year (all groundwater), while landscape 
irrigation used about 200 million m³ (all treated wast ewater).   The remainder was used for industrial 
and domestic purposes.4 The over-extraction of groundwater resources has led to a lowering of the 
water table by more than one metre on average pe r year since 1979, while sea water intrusion is 
increasing in the coastal areas.5 The first desalination plant was installed in Abu Dhabi in 1976. There 
are now many desalination plants all over the UAE, of which 17 main plants located in Abu Dhabi, 
Dubai, and Sharjah6;  total desalination capacity is about 710 million m3/year.  According to the 
authorities, groundwater withdrawal is now essentially for agricultural purposes, and all domestic and 
industrial needs are met by desalination plants.    
9. Despite the water constraint, remarkable advan ces have been made in agriculture since 1975, 
when financial resources from oil exports started to  flow towards the development of agricultural 
production.   The cultivated area increased from 15, 000 hectares (ha) in 1977 to 71,000 ha in 1994, 
and around 260,000 ha in 2003 (3.1% of the UAE's to tal territory).  In 2003, there were over 38,500 
farms in the UAE, up from 21,000 in 1994, producing ma inly vegetables, dates, and fruit.  Another 
4% of the territory is covered by forests, as thousan ds of hectares of palm trees, and woodlands, have 
been planted in the country.     
10. Agriculture contributed 2.7 % to GDP in 2003 and employed about 9% of the workforce.  
Most employment is in farming (7.4% of the workforce), followed by food and beverage 
manufacturing (1%), tobacco processing (0.1%) and fishing (0.6%).   
(ii) Main policy instruments 
11. Given the UAE's climate, most agricultura l production requires substantial government 
support;  this is granted mainly by the authoriti es of Abu Dhabi, which accounts for 87% of the 
country's land mass.   The MAF supports agricultural pr oduction in the six other emirates.  It is also in 
charge of coordinating agricultural, forestry, an d fisheries policy, as well as promoting irrigated 
agriculture and the management of groundwater res ources, the construction of dams for flood control 
and groundwater recharge, and the operation and main tenance of the hydro-meteorological network.  
The operation of laboratories, pest and disease cont rol, quarantine, inspection services, veterinary 
services, and forestation are also under its purview.   
12. At the federal level, the General Water Re sources Authority is responsible for water 
management and coordination between the other agenci es. It is also responsible for formulating the 
rules and regulations on matters relating to water, including the registration of the water well drilling 
companies and licences for drilling. According to the authorities, the MAF and other agencies 
subsidize the use of  bio-fertilizers and bio-p esticides in order to limit environmental damage. 
                                                      
2 Ministry of Economy and Planning (2004). "Study on the Development of Agricultural Sector and its 
Future 1995-2000". 
3 This figure does not include the possible annual recharge of groundwater from neighbouring countries 
(for example from the Eastern Arabia A quifer), as no figures are available. 
4 Ministry of Presidential Affairs (2004).  
5 FAO online information, "Aquastat, Country Prof iles:  United Arab Emirates".  Available at:  
http://www.fao.org/ag/agl/aglw/aquastat/countries /untd_arab_em/index.stm [22 September 2005]. 
6 Environmental Research and Wild life Development Agency (2002). WT/TPR/S/162 Trade Policy Review 
Page 48 
 
 
13. Apart from the Government's experimental farm s, nurseries, forestation schemes, and public 
gardens, all agricultural land is owned and managed privately.  Such land can only be owned by UAE 
nationals. Foreign companies may, as in other sectors of the UAE economy, hold up to 49% of the capital of agri-industrial companies. 
14. In Abu Dhabi, the Government gives land to UAE  citizens, prepares the land for farming, and 
provides fertilizers, pesticides, seeds, and irrigation.  The Government of Abu Dhabi buys part of the production (mainly vegetables and dates) at set farm-g ate prices, and resells at set prices through the 
Abu Dhabi Municipality outlets.  Vegetable producti on in the other (mostly northern) emirates is, 
according to the authorities, carried out under market  principles, except for dates which purchased by 
the Abu Dhabi Municipality from farmers in the northern emirates.    
15. Support for livestock production consists of free veterinary treatment and vaccination.  Some 
fodder is imported, but it is increasingly produced locally.  Fodder farms are supported with free land, 
seeds, fertilizers, and free irrigation;  sales of f odder in Abu Dhabi are organized by the Abu Dhabi 
Municipality.  According to the authorities, little assistance is extended for poultry and dairy, produced privately using intensive integrated production systems.    
16. In general, assistance to farmers includes s ubstantial investment and production subsidies: 
reclamation and distribution of agricultural land;   provision of necessary equipment and training; 
large-scale planting of palm trees to create suitabl e shaded areas for farming; provision of fresh water 
and seeds;  provision of, and guidance on, the timel y use of fertilizers;  and marketing support. 
17. The provision of fresh water entails a number of infrastructural services, including: water 
supply facilities, dams, drainage, and irrigation fac ilities.  No irrigation water charges are levied by 
the federal or emirate governments (except on treat ed water), but farmers pay for the drilling of 
boreholes on their farms and the pumping of groundwater .  They pay half of the maintenance costs of 
the irrigation network. 
18. The Federal Government has invested sizeable resources in agricultural research and guidance 
to farmers, so as to optimize productivity.  Agricultural research focuses on four main areas: 
increasing the production of palm trees, dates, and fru it such as citrus and mangoes; fodder, pastoral, 
and wild plants; long-term research on agricultural diseases; and research on plants grown in greenhouses.  The MAF is also financing research on the types of fodder that can withstand the country's climatic conditions and survive on little water.  Studies are under way on combating salinity 
and the capacity of different types of fodder plants to withstand high salt content in the soil. Research 
is also encouraged on biological control methods as an alternative to the use of insecticides to combat 
agricultural diseases. Another avenue of research  concerns the production of alternate vegetable 
products in greenhouses. The UAE also hosts the Inte rnational Centre for Biosaline Agriculture, an 
applied research and development centre located in  Dubai, which aims to develop and promote the 
use of sustainable agricultural system s that use salt water to grow crops. 
19. In 2004, the Government of Abu Dhabi allocat ed some US$300 million dollars to agriculture 
(Table IV.2) for production estimated at US$1.2 billion.
7  In addition, sizeable expenditure was 
allocated to electricity and water (US$585 million). It is estimated that over half of total expenditure 
on electricity and water is used for irrigation purposes.   
                                                      
7 IMF (2005b). United Arab Emirates WT/TPR/S/162 
 Page 49 
 
 
Table IV.2 
Abu Dhabi developmen t expenditures, 2000-04 
(US$ million equivalenta) 
 2000 2001 2002 2003 2004b 
Agriculture 246.9 230.0 185.4 200.4 298.1 
Electricity and water 363.7 887.4 475.9 753.1 584.6 
Industry and commerce 25.3 52.2 142.9 350.4 429.9 
Transport and communications 618.6 725.3 699.7 542.6 637.1 
Housing 219.7 188.6 187.8 526.3 562.5 
Urban development  228.7 300.0 294.6 235.5 87.1 
Sewerage 160.6 198.5 226.5 236.6 178.6 
Sports and recreation 126.3 188.9 236.3 334.1 400.2 
General administration 38.9 66.9 56.3 38.1 58.2 
Health 0 0 0 0 2.9 
Total 2,029.1 2,838.3 2,505.9 3,217.4 3,239.7 
a US$1 = Dh 3.6725. 
b Preliminary data. 
Source:  IMF (2005b), United Arab Emirates: Selected Issues and Statistical Appendix .  Available at:  
 http://www.imf.org/external/pubs/f t/scr/2005/cr05268.pdf [22 September 2005].  
20. In April 2002, the UAE notified the WTO Committee on Agriculture of domestic support in 
2000 and 2001 (Table IV.3). These amounts are cons iderably smaller than those reported by the 
Emirate of Abu Dhabi, as they contain only expenditure by the federal government.   No domestic 
support had been reported for 1996 to 1999 or 2002 to 2004.8  In 2002, the UAE notified the WTO 
Committee on Agriculture that it granted no e xport subsidies during the period 1996-2001.9  N o  
notification has been received since then. 
Table IV.3 
Domestic agricultural support measures,  2000 and 2001  
Value (US$) Measure type Name and description of measure  
2000 2001 
Green box measures   
General services Agricultural research 209,666 245,064 
 Sanitary quarantine and veteri nary services 335,085 680,735 
Development programmes (special and differential treatment)   
Investment subsidies generally available to 
agriculture Loans and financing in agricultural sector 1,769,911 1,497,617 
Input subsidies generally available to low-
income or resource-poor producers  680,735 953,029 
Note: Exchange rate:  US$ 1= Dh 3.6725. 
Source:  WTO document G/AG/N/ARE/5, 22 May 2002,  Supporting Table DS:1.  
21. Agricultural products attract a tariff of either  0% or 5%, with two exceptions: alcoholic 
beverages (50%), and 20 tariff lines covering a ll tobacco products with an alternate tariff 
(Chapter III(2)(iv)(a)). The simple average tariff on agricultural products (ISIC Rev.2 definition) is 
low at 3.3% (4.5% on food products (ISIC 311 and 312)). Imports of plants, animals, and their products must meet all sanitary and phyto sanitary requirements set at federal level 
                                                     
 
8 WTO document G/AG/N/ARE/3, 25 April 2000. 
9 WTO documents G/AG/N/ARE/2, 25 Apr il 2000, and G/AG/N/ARE/4, 22 May 2002 . WT/TPR/S/162 Trade Policy Review 
Page 50 
 
 
(Chapter III(2)(vii)(b)).  The UAE lifted its ban on o live oil from the European Union, maintained for 
SPS reasons, in June 2005.10   
22. There are no a priori price controls on agricultural products, but the MEP monitors the prices 
of 15 basic goods, including food pr oducts, in an effort to combat  cartels and other anti-competitive 
practices (Chapter III(4)(iii)).  
(iii) Developments regarding selected products 
(a) Dates 
23. Dates are the UAE's main crop (Table IV.1).  Date palm cultivation plays a key 
environmental role in afforesting portions of the desert into oases. Over 40 million date palms have 
been grown in the UAE;  16 million line the roads.  Many farms use modern irrigation systems. The 
country is a pioneer in tissue culture  to grow date palms;  several companies have emerged as  leading 
producers of date palms using tissue-culture technol ogy.  One company, Al Wathba Marionnet, was 
established in 1997 under the UAE Offset programme (Chapter III(2); it is currently producing about 
300,000 date palms a year, and it exports dates.   
24. A Jebel Ali free-zone company has introduced a new technology to produce fructose syrup 
from dates. Concept Food Industri es claims to be the first comp any in the world to use this 
technology, which also delivers a high protein an imal feed as a by-product.  The facility has the 
capacity to extract 35,000 tonnes of high fructose syrup yearly from dates. The new facility is expected to boost government-spons ored efforts to improve palm date cultivation within the UAE. 
(b) Other crops 
25. The Al Ain vegetable packing factory, owned by the Emirate of Abu Dhabi, started 
operations in 1987 with the aim of processing local agricultural surplus.
11  The factory comprises lines 
for pickled vegetables (with an annual capacity of  3,000 tonnes), frozen vegetables (500 tonnes), and 
tomato paste (60,000 tonnes).  
26. The Grand Mills for Flour and Animal Feed Company in Abu Dhabi production capacity has 
increased from 200 to 800  tonnes of flour per day since its inception in 1998.  The mills are owned 
by the Abu Dhabi General Holding Company ( section (3) below), which is government-owned.  One 
animal feed mill produces over 50 varieties of fodder;   a new mill, with a capacity of 30 tonnes per 
hour, produces poultry, fish, and no n-traditional feeds.      
27. The Dubai Investments Company, founded in 1995 by the Government of Dubai to invest in 
local companies to improve their productivity, holds  70% (US$50 million) of th e equity of the Edible 
Oil (Dubai) LLC project in the Jebel Ali Free Zone , in partnership with the Swiss-based CAM Group 
(30% equity).12 The seed-crushing plant, for the production of edible oil and meals, is the largest 
facility of its kind in the Middle East;  capac ity is expected to be 450,000 tonnes.  
                                                      
10 WTO documents G/SPS/R/30, 4 September 2003;  G/SPS/R/34, 16 August 2004;  and G/SPS/R/35, 
13 January 2005. 
11 See Al Ain online information.  Available at:  http://www.aanvpcf.net.ae/. 
12 Dubai Investment Company online information. Available at:  http://www.dubaiinvestments.com. United Arab Emirates WT/TPR/S/162 
 Page 51 
 
 
(c) Fisheries  
28. The UAE's fishing subsector has had to adapt to changing conditions and technologies in 
recent years. Over-fishing has resulted in reduced catches and smaller fish in the landed catches. The 
situation has been worsened by considerable pr ovision of boats, engines, equipment, and storage 
facilities by the Government. According to the author ities, fishing boats have been operated mainly by 
non-UAE nationals whose concern for stock preservation may be less than that of UAE fishermen.    
29. In order to preserve stocks, the Ministry of Agriculture and Fisheries has issued regulations 
concerning fishing gear, areas and seasons, and the st ructure of the workforce;  fishing committees 
were established to ensure proper coordination with other governmental  bodies.  It is illegal to catch 
undersize fish; to use less than 2-in ch mesh in fish traps or less than  ½ inch mesh in fishing nets; to 
carry out fishing operations in spawning and nur sery areas during the restricted period; and to fish 
without a UAE citizen on board the vessel.  In order to protect the seabed and its demersal fisheries, 
bottom trawling is not permitted in the territorial wa ters of the UAE;  new fishing boats are no longer 
being registered, nor hobby craft;  the number of fish traps is also restricted, as are fishing periods.  In order to increase fish stocks, a programme is in place to introduce fingerlings in protected areas. 
30. Experimental aquaculture in th e UAE has been undertaken for some years.  Commercial fish 
farming is being supported by the UAE Offsets Gr oup (Chapter III(2)), which helped to establish the 
international fish farming company Asmak.  The bu siness activities of Asmak span all aspects of the 
aquaculture industry, including hatcheries, fish farming, processing and packaging, fish feed, fish-farming equipment, marketing, distribution, expor t, and consulting.  Fu rther expansion phases are 
planned in Ra's al-Khaimah, Fujair ah, and Abu Dhabi.  The company has also acquired a stake in the 
Greek company Feedus as part of its strategy to  invest internationally in successful aquaculture 
projects.  Feedus, as its name suggests, is e ngaged in the manufacture and supply of fish-feed 
products.  
(d) Cigarettes and tobacco products 
31. Exports of cigarettes were US$400 million in 2002, accounting for 30% of the value of UAE 
agricultural exports, up from 11% in 1979-81.  Impor ts are also sizeable at US$300 million.  In the 
Jebel Ali free-zone alone, some 60 companies are i nvolved in tobacco manufacturing or trade, taking 
advantage of the duty-free import of inputs.  On e large company produces outside the free zones.   
(3) M
INING , ENERGY , AND WATER  
(i) Overview 
32. The UAE is a major oil and gas producer in a ma jor producing area, the Arabian Gulf. It is a 
member of both the Organization of Petroleum Exporting Countries (OPEC) since 1974, and the Organization of Arab Petroleum Exporting Countries (OAPEC) since 1970.
 13  Oil and natural gas 
reserves are among the world's five largest; both are est imated to last more than 100 years at current 
production rates (Table IV.4).  The UAE also has fu rther, largely untapped, gas reserves estimated to 
last 100 years at current production rates.14     
                                                      
13 Online information available at: http:// w ww.opec.org;  and http:// www.oapecorg.org. 
14 IMF (2005b). WT/TPR/S/162 Trade Policy Review 
Page 52 
 
 
Table IV.4 
Reserves, production, and exports of oil and natural gas, 1990-04  
2004 
 1990  1995 2000 2001 2002 2003 2004  World 
share  Rank in 
world 
Proven crude oil reserves (m b) 98,100  98,100 97,800 97,800 97,800 97,800 97,800  .. 3 
Crude oil production (1,000 b/d) 1,763  2,148 2,175 2,115 1,900 2,248 2,344  3.3 8 
Crude oil and refined products 
exports (1,000 b/d) 1,927  2,194 2,207 2,185 2,100 2,562 2,676  .. .. 
Crude oil exports          
  Volume (1,000 b/d) 1,762  1,925 1,815 1,787 1,614 2,048 2,172  .. .. 
  Value (US$ million) 14,846  12,822 26,148 22,414 21,768 25,153 38,099  .. .. 
Exports of refined products 
(1,000 b/d) 165 269 392 398 486 514 504 .. .. 
Output of refined products 
(1,000 b/d) 188 230 315 310 425 430 440 5.2a 8a 
Proven natural gas (billion 
standard m3) 5,623  5,859 6,060 6,060 6,060 6,060 6,060  .. 4 
Marketed production of natural 
gas (million standard m3) 22,110  31,320 38,380 39,360 43,390 44,800 45,800  1.6 15 
Natural gas export (million 
standard m3) 3,200  6,530 6,950 7,460 7,113 7,187 7,380  0.8 21 
.. Not available. 
a Share and ranking among OPEC countries. 
Source:  OPEC, Annual Statistical Bulletin 2004 . Available at: http://www.opec.or g/library/Annual%20Statistical%20 
 Bulleting/asb2004.htm; and Internationa l Energy Agency online information,  "Natural gas".  Available at:  
http://www.iea.org. 
33. The oil and gas sector provides around a third of the UAE's GDP, although this share has 
been declining thanks to a successful programme of economic diversification, most notably in Dubai, 
which faces a depletion of its oil resources.  Neve rtheless, the oil and gas sector remains the dominant 
contributor to consolidated government revenues.  The UAE applies tariffs of 5% on imports of all 
products of the mining industry and of electricity. The UAE has not included any energy-related 
services in its GATS Schedule of Commitments.15 
34. According to the Constitution, ow nership of natural resources is vested in each emirate. Thus, 
the UAE has neither a unified federal energy po licy nor federal legislation on exploration and 
development of energy and other mineral products.  The Federal Ministry of Energy represents the 
country in the international petroleum communi ty and specialized international and regional 
organizations to which the UAE belongs, such as OPEC, OAPEC, and the Arab Organization of 
Mineral Resources.    
(ii) Petroleum, and gas  
35. The UAE currently produces around 2.5 million barrels of oil per day (b/d).  Abu Dhabi owns 
more than 90% of the UAE's oil and natural gas resources.  Dubai produces around 140,000 b/d of oil 
(6% of the country's production) and substantial quantities of gas from offshore fields (with a major 
condensate field onshore); Sharjah is the thir d UAE hydrocarbon producer.  On the east coast, 
Fujairah is the second largest bunkering port in th e world (about one million tonnes of fuel per 
month), although all the fuel is imported from neighbouring countries.  Gas is increasingly used by households and local industries, including for power generation and water desalination; exports have 
                                                     
 
15 WTO document GATS/SC/121, 2 April 1996. United Arab Emirates WT/TPR/S/162 
 Page 53 
 
 
also increased. Oil and gas production is handled by the Abu Dhabi National Oil Company 
(ADNOC), or by subsidiaries in which ADNOC is a majority shareholder, th rough joint ventures with 
international companies is a majority shareholder (T able IV.5).  According to the authorities, about 
40% of oil production is also carried out by concessi onaires wholly owned by foreign interests.    
Table IV.5 
Activities of the Abu Dhabi National Oil Company (ADNOC), 2005 
 Abbreviation ADNOC share Foreign shareholders 
Refined products distribution 
Abu Dhabi National Oil Company 
ADNOC Distribution ADNOC  
 
100%  
E xploration and production companies 
Abu Dhabi Company for onshore oil 
operations 
Abu Dhabi Marine Operating Company Zakum Development Company  
(ADCO) 
ADMA-OPCO 
ZADCO  
60% 
60% 
88%  
 40% 
 40% 
12% 
Gas processing companies 
Abu Dhabi Gas Industries Limited 
Abu Dhabi Gas Liquefaction Company Limited  
GASCO 
ADGAS  
68% 
70%  
 32% 
30% 
Cude refining companies 
Abu Dhabi Oil Refining Company   
TAKREER  
100%  
 
Chemicals and petrochemicals 
Ruwais Fertilizer Industries 
Abu Dhabi Polymers Company Limited  
FERTIL 
BOROUGE  
66% 
60.00%  
 33% 
 40.0
0% 
O il and gas shipping companies 
Abu Dhabi National Tankers Company 
National Gas Shipping Company  
ADNATCO 
NGSCO  
100% 
70%  
 
 30% 
Source: ADNOC. 
36. Downstream development of refineries, petroche mical plants, and other related industries has 
created an integrated oil and gas sector. The UAE h as five refineries with a combined capacity of 
more than 0.64 million, and is the eighth largest  producer among OPEC countries.  The progressive 
build-up of refining capacity since the 1980s has ma de the UAE a sizeable net exporter of refined 
products;  although their share in the total oil exports  remains modest at about 10%, it is on an upward 
trend (Table IV.4).   Furthermore, the UAE has pl ans to build a new refinery at Fujairah with a 
capacity to process 300,000 b/d of crude oil.   
37. Four of the five UAE refineries are owned by  the respective emirates;  two are operated by 
Abu Dhabi Oil Refining Company (Takreer), owned by ADNOC (Table IV.5):  the Ruwais refinery, 
has a capacity of 145,000 b/d of crude oil, plus 280,000 of condensate.  Ruwais hosts one of the 
world’s largest petroleum industry complexes, hous ing oil, gas, petroche micals operations, and a 
number of companies servicing the onshore and offsho re oil and gas business;  the other, Abu Dhabi 
Refinery, has a capacity of 88,000 b/d.  Takreer's refining capacity more than doubled over 2000-04 to 
over 500,000 b/d, making it a major regional op erator.  The Emirates National Oil Company 
condensate refinery (ENOC), owned by the Dubai Em irate, with a capacity of 120,000 b/d, began 
operations in Dubai in May 1999.  Metro Oil, owned by the Government of Fujairah, is a 90,000 b/d 
refinery.  A 71,250 b/d privately owned second-hand un it was set up in Sharjah by the private Sharjah 
Oil Refining Company in 2001.  The Metro Oil and Sharjah refineries were not operating in early 
2006.    WT/TPR/S/162 Trade Policy Review 
Page 54 
 
 
38. Abu Dhabi has no comprehensive petroleum legisl ation governing the granting of exploration 
and development permits.16  The legal framework for the development of petroleum resources is 
therefore determined by the terms and conditions of  individually negotiated oil agreements concluded 
between the government and the oil companies.  Fore ign ownership is not a priori limited.  The Abu 
Dhabi National Oil Company (ADNOC) was establishe d in 1971.  It is fully owned by the 
Government of Abu Dhabi.  It is controlled a nd supervised by the Supreme Petroleum Council. 
Established in 1988, the Council has the dual ro le of formulating all petroleum policies and 
overseeing their implementation;  it also acts as ADNOC’s main board.  The Council is currently chaired by the Ruler of Abu Dhabi (the President of the UAE), who appoints its members by decree.  
The Secretary General of the Council is also the chief execu tive officer of ADNOC.
17     
39. ADNOC is the interface between the Council and the operating companies that execute 
approved projects.  It exercises administrative and t echnical control over its affiliated companies.   
The Council grants petroleum concessions a nd licences, and ADNOC carries out the detailed 
negotiations leading to their implementation.  Th e Council monitors crude oil production to ensure 
adherence to the OPEC-mandated quotas.  
40. Products refined by Takreer are sold to inte rnational buyers, at regional market prices by 
ADNOC;  domestic sales are carried out by ADNOC Distribution (Table IV.5), a separate legal entity in the ADNOC Group. A number of other public companies market oil products:  ENOC (Dubai), 
Emirates (federal government), and Emirates Petr oleum Products Company (EPCO, owned by the 
Government of Dubai).  Gasoline prices are fixed by the Government of the UAE and are the same 
throughout the country.  Apart from 95 and 98 octane gasoline, which are sold at Dh 6.25 
(approximately US$0.5 per litre) and Dh 6.75 a gallo n, respectively, all domestically refined products 
(e.g. diesel, jet oil, naphtha, bunkering oil, etc) are so ld at market rates.  Diesel is currently sold at 
Dh 7.8 a gallon.  Around 6 million tonnes of refined products per annum are sold domestically, half of 
the volume of exports.  
41. Since 1976, pursuant to the Abu Dhabi Gas Ownership Law, ADNOC has also been 
managing, all Abu Dhabi's gas reserves on behalf  of the Abu Dhabi Government.  ADNOC has 
entered into joint ventures with major multinational oil companies to gather, process, and liquefy the 
gas for the domestic and international markets.  In 1999, ADNOC and the UAE Offsets Group (UOG) 
issued a joint declaration to shar e natural gas distribution.  The resulting Dolphin Project is a recent 
intra-regional initiative, which aims to develop links between the nati onal gas infrastructures of Qatar, 
the UAE, and Oman.   A Development and Produ ction Sharing Agreement was signed in 2001 
between the UAE Offsets Group (UOG, see Chapter III(2 )(viii)) and the State of Qatar, under which, 
initially, up to 2 billion standard cubic feet of na tural gas are to be supplied from Qatar to the UAE 
daily;  supplies are expected to start in late 2006.  Dolphin’s main customers are Abu Dhabi Water and 
Electricity Authority (ADWEA, see below), the Unio n Water and Electricity Company, the Oman Oil 
Company, and the Dubai Supply Authority.  The Duba i Supply Authority is responsible for sourcing 
and securing Dubai’s natural gas requirements;  it is currently acquiring these from ADNOC, and has 
signed a 25-year gas sales agreement with Dolphi n Energy, with deliveri es to commence once the 
project comes on stream.  Dolphin's main shareholder is the Government of Abu Dhabi, with 51% ownership, and two foreig n partners Total and Occidental Petrol eum, each with 24.5% of the equity. 
42. A corporate tax applies to oil, gas, and all petrochemical activities in Abu Dhabi according to 
the Abu Dhabi Income Tax Decree of 1965, as amende d.  This decree was not promulgated as special 
                                                     
 
16 However, a number of laws pertain directly or indirectly to the petroleum industry, including the Abu 
Dhabi Tax Decree (see below), the Abu Dhabi Gas Ownership Law, the Petroleum Resources Conservation 
Law, and the Petroleum Ports Law. 
17 ADNOC (2005). United Arab Emirates WT/TPR/S/162 
 Page 55 
 
 
petroleum tax legislation but as a corporate tax law of general application.  However, in practice, it is 
presently applicable only to "chargeable persons" "dea ling in oil" in Abu Dhabi.  Currently, the tax 
ranges between 55% and 85% depending on the pr oduct that generates the taxable income.  
According to the authorities, "chargeable pe rsons" include foreign entities, ADNOC and its 
subsidiaries, and all other domestic companies deali ng in petroleum.  The Supreme Petroleum Council 
grants tax incentives, including tax holidays and re duced tax rates, to businesses that benefit Abu 
Dhabi in terms of, inter alia , economic development, investment , technology transfer, training of 
nationals.  
43. Dubai has no petroleum law as such.  Petr oleum operations are carried out through 
concessions or contracts concluded between companie s and the Government of Dubai.  The principal 
operator is the Dubai Petroleum Company, owned by  foreign companies. There is no comprehensive 
petroleum legislation in Sharjah, all contracts are negotiated on an individual basis.  The emirate’s policy regarding exploration, production, and processing of oil and all petroleum matters is 
formulated by Sharjah Petroleum Council, which was established in 1999.   
(iii) Electricity, water, and utilities  
44. Electricity production was estimated at 48,100 GW/h in 2003. Some 97% of the production is 
fuelled by gas while the remainder is produced by diesel generation or steam turbines.  There are no 
imports or exports.  There are plans for interconne ction of electricity transmission and distribution 
networks among emirates, and among member s of the Gulf Cooperation Council (GCC).
18  T h e  
interconnection of all emirates is expected by end- May 2006, with a medium term project to connect 
with other GCC states.  Water production and distribution are closely associated with electricity 
generation, and are carried out by the same companies.   
45. There are four electricity-water authorities in the UAE: the Abu Dhabi Water and Electricity 
Authority (ADWEA), The Dubai Electricity and Water Company (DEWA), the Sharjah Water and 
Electricity Company (SEWA), and the Federal Agency  for Water and Electricity within the Ministry 
of Energy, which supplies the four northern emirates and parts of Sharjah.  All entities, except 
ADWEA, are owned and controlled by the resp ective governments, and have monopoly over all 
segments of the electricity subsector.19  Installed generation capacity has increased from 9,500 MW in 
2000 to 14,500 MW in 2004;  the share of ADWEA  increased from 46% of the total to 54% over the 
period.  Coordination is by the Ministry of Energy.   
46.  In 1997, the Emirate of Abu Dhabi form ed a Privatization Committee for water and 
electricity.  In early 1998, a law was passed for th e  comprehensive restructuring of the subsector.20  
Since then, the Abu Dhabi electricity and water industry has been unbundled (Chart IV.2).    
 
                                                      
18 The six GCC states have set up a joint company, the GCC Power Grid Authority, to link their power 
networks, improve the efficiency of each memb er's system, and trade in electrical power. 
19 Online information is available at:  http://www.dew a.gov.ae (Dubai Electricity and Water Authority), 
and http://www.sewa. gov.ae (Sharjah Electricity and Water Authority). 
20 Law No. 2 of 1998. WT/TPR/S/162 Trade Policy Review 
Page 56 
 
 
Chart IV.2
Abu Dhabi electricity and water industry, January 2006
Abu Dhabi Water & Electricity
 Authority (ADWEA)Regulation & Supervision Bureau
(RSB)
Abu Dhabi Water & Electricity
 Company (100% owned by ADWEA)
Single buyer/sellerTRANSCO
Transmission Company
(100% owned by ADWEA)
Abu Dhabi Distribution Company
(100% owned by ADWEA )
Water and electricity distributionAl Ain Distribution Company
(100% owned by ADWEA)
Water and electricity distributionAl Mirfa Power CompanyBainounah Power Company
Al Taweelah Power Company
Union Water & ElectricityArabian Power Company
Emirates CMS Power Company
Gulf Total Tractebel Power Company
Shuweihat CMS International Power
CompanyProducers 
(100% owned by ADWEA)Authorit y Procurer Distributor
Source: Abu Dhabi Water and Electricity Company, Statistical Report 1998-2004 ; and information provided by ADWEA.
New Producers
(Partly owned by ADWEA)Regulator Transmission Distributor
 
47. Currently, the Regulation and Supervisi on Bureau is the sector's regulator.21 ADWEA is now 
a holding company that owns 100% of four produc ing companies, and 60% of four other producing 
companies, the Independent Power and Water Producers (IPWPs), private foreign and domestic 
stakeholders holding the remaining 40% (Chart IV .2).  Since 1999, the sector has attracted about 
US$5 billion of foreign investment.  ADWEC is the sole buyer from all the producers.  Electricity 
transmission is under the monopoly of Transmission  Company (TRANSCO).  Distribution is under 
the monopoly of Abu Dhabi Distribution Company (ADDC) for the Abu Dhabi region, and Al Ain 
Distribution Company (AADC) for the Al Ain region. Aside from the IPWPs, all entities are 100% 
owned by ADWEA.  The prices of electricity and water are determined at emirate level (Table IV.6).   
48. ADNOC also produces electrical power.  In 2002, th e latest expansion of the Ruwais refinery 
involved the addition of four gas turbines and tw o water desalination units. The output from the 
Ruwais refinery was initially intended to supply power and utilities only to plants in the Ruwais 
industrial area.  In 2000, ADNOC and the Abu Dhabi Water and Electricity Authority (ADWEA) 
signed a Memorandum of Understanding to interconnect their electrical grids to exchange power in 
the future.  Ruwais electricity plant now supplies power to the ADWEA National Grid. 
                                                      
21 RSB online information, Availa ble at: http://www.rsb.gov.ae. United Arab Emirates WT/TPR/S/162 
 Page 57 
 
 
Table IV.6 
Electricity and water charges, January 2006 
Product Customer category price 
  ADWEA DEWA SEWA FEWA 
 dh/kwh 
Electricty UAE nationals domestic 0.05 0.075 0.075 0.075 
 Non-UAE nationals domestic 0.15 0.20 0.20 0.15 
 Industrial/commercial 0.15 0.20 0.20 0.20 
 Governmental and sc hools 0.15 0.20 0.20 0.20 
 Farms 0.03 0.075 0.075 0.075 
 dh/gallon 
Water UAE nationals domestic 0 0.015 0.015 0.01 
 Non-UAE nationals domestic 0.01 0.035 0.025 0.02 
 Tank distribution 0.005 0 0 0 
 Residence without meters 50 monthly 0 0 0 
 Industrial/commercial 0.01 0.035 0.03 0.03 
Source: Ministry of Energy. 
(4) MANUFACTURING  
(i) Main features 
49. The emirate governments have each invested important financial resources to diversify their 
economies into non-hydrocarbon industries. Initially , the UAE's manufacturing sector developed in 
oil- and gas-intensive industries, such as petroche micals, fertilizers, cement, and aluminium, based on 
its comparative advantages.  Subsequently, the sector  has rapidly evolved to more diversified products 
such as electronics and light machinery, exported in large part from the free zones.  Currently, major 
growth areas include capital-intensive high-technology industries supplying, inter alia , security and 
safety equipment; information technology equipmen t; medical equipment and services; construction 
products; air conditioning and refrigerating e quipment; environmental and pollution control 
equipment;  and sporting goods and equipment.   To  a large extent, this production caters for the large 
oil industry, and the large infrastructural project s such as Dubai Health Care, Dubai Media City, 
Dubailand, Dubai International Financial Centre.  No statistics are available on the UAE's 
manufacturing sector.  
50. Available trade data (Table IV.7)  show that imports in the UAE customs territory of 
manufactured products, except food, beverages and tobacco (section (2) above), are approximately 
US$35 billion annually; in addition, im ports into the Jebel Ali Free Zone  alone (there are in total over 
20 free zones) amount to about US$10.5 billion.  Re-exports are in the order of US$10 billion.  
Exports from the customs territory average US$2.4 bil lion annually, and consist mainly of aluminium, 
other articles of base metal, and pl astic and rubber articles.  In addition, exports from Jebel Ali Free 
Zone to third countries (US$8.6 billion annually) co nsist mostly of machinery and equipment, as well 
as instruments and apparatus.    WT/TPR/S/162 Trade Policy Review 
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Table IV.7 
Trade in manufactured products, 2003 
(US$ million) 
HS section Domestic 
imports Jebel 
Ali 
imports Re-exports Exports Jebel 
Ali 
exports 
V Mineral products 570 373 133 144 335 
VI.  Chemical products and re lated industries 2,046 787 593 169 718 
VII.  Plastic and articles thereof, rubber and article thereof 1,458 394 469 56 267 
VIII.  Raw hides and skins, leat her, furskin, etc. 186 20 119 16 10 
IX.  Wood, cork, etc. and articles 493 15 61 0 6 
X.  Pulp of wood or other fibrous  cellulosic materials, paper and 
 paperboard 437 93 94 59 45 
XI.  Textiles and textile s articles 4,576 437 1,988 436 340 
XII.  Footwear, headgear, umbrellas, etc. 440 77 303 1 47 
XIII. Articles of stone, plaster, cement, asbestos, etc. 774 280 253 82 219 
XIV.  Natural or cultured pearls, precious or semi-precious stones, 
 etc. 7,279 179 503 82 149 
XV.  Base metals and articles of base metal 3,251 641 736 1,114 678 
XVI.  Machinery and mechanical appliances; electrical equipment 
 etc. 7,710 6,122 2,550 55 4,943 
XVII.  Vehicles, aircraft, vessels and asso ciated transport equipment 3,555 492 1,510 123 384 
XVIII.  Optical, photographic, cine matographic, measuring, etc. 
 instruments 1,144 474 354 1 325 
XIX.  Arms and ammunition 7 0 1 0 0 
XX.  Miscellaneous manufactured articles 1,140 201 482 12 130 
XXI.  Works of art, collectors'  pieces and antiques 39 0 131 3 0 
Section V to XXI total 35,104 10,585 10,278 2,353 8,594 
 
Source:  Central Bank of the United Arab Emirates, Statistical Bulletin , various issues. Available at: 
 http://www.cbuae.gov.ae/s tatistical_bulletin.htm. 
(ii) Policy framework 
51. The long-term policy objective sh ared by all emirates is to increase the manufacturing sector's 
contribution to GDP.  Typically, each Emirate holds a ma jority stake or is the sole shareholder in key 
companies.  The Ministry of Finan ce and Industry is the federal authority in charge of formulating the 
policies.   
52. Industrial licences are required to establish a manufacturing activity.  These licences are 
issued by the economic authority of the emirate in which the business office is to be located.  Foreign 
companies wishing to establish in the UAE may hold  at most 49% of the capital of the company 
(Chapter II(5)).  From the point of view of competition there is no regulation of incentives offered by the respective emirates.   
53. Under Federal Industrial Law No. 1 of 1979, th e Federal Government may offer investment 
incentives to companies that register with it (B ox III.1).  According to the authorities, the only 
assistance effectively available is the concessionary  financing provided by the Emirate Industrial 
Bank (Chapter III(3)).  The number of industries registered at the Ministry of Finance increased from 
1,243 in 1995 to 3,036 in 2004; the stock of i nvestment has increased th ree-fold since 2002, to 
US$17.15 billion.  The food, beverage and tobacco industries have experienced the largest increase in 
investment over 2000-04, growing by 73% annually, followed by chemicals and plastics. The largest 
industrial growth has taken place in Abu Dhabi and Fujairah.  As noted, these statistics cover only the 
production of units that are registered at the federal level. 
54.  Some institutions have been created speci fically to foster the development of the 
manufacturing sector.  For example, Dubai Investment Company, established in 1996, has stakes with a total of over US$1.6 billion in over 20 companies.  Another company, Abu Dhabi National Industrial Projects, was set up in 1997 as a pr ivate shareholding company designed to establish United Arab Emirates WT/TPR/S/162 
 Page 59 
 
 
medium- to large-scale industries and services proj ects that will open new business opportunities.  In 
May 2004, the Emirate of Abu Dhabi established the Higher Corporation for Specialized Economic Zones, aimed at providing an integrated infr astructure, a suitable business environment, and 
professional services through the establishment and ma nagement of special zones in Abu Dhabi.
22  
Other objectives include the promotion of local industries and the creation of employment and 
training opportunities for UAE nationals.  The corpor ation also encourages small, medium-sized and 
specialized industries, and will encourage the privat e sector to become involved in the management of 
the zones.   
55. The Abu Dhabi government has also announced plans to privatize certain manufacturing 
companies. A state-owned company, General Holding Company (GHC) took over the industrial 
holdings of the General Industries Corporation, whic h was wound up.  GHC is privatizing some of its 
enterprises as part of the emirate’s strategy to fo rge a public-private partnership and stimulate local 
financial markets. The areas to be privatized incl ude fodder, cement, steel and pipe plants, and flour 
mills (section (2)(iii) above).  The privatization is expected to strengthen the local stock markets as 
the newly privatized firms obtain listings.    
56. The UAE Offsets Group is also active in promo ting industrial development (Chapter III(2)).  
Projects established under the UAE Offsets Programme, linked to purchases of military equipment, include a shipyard, agri-business projects, and manuf acture of air-conditioning units (Table III.4).  In 
April 1999, the UAE Offsets Group announced the fo rmation of UTS - Burnstop, a joint-venture 
between the UAE group United Technical Servi ces (51%), Burnstop from Finland (40%) and 
Dassault Investments (9%), the company manufactur es firefighting and prevention equipment.   
57. MFN applied tariffs on manufactured goods (ex cept agri-food) are generally at 5% (modal 
rate), with a few rates at zero (mainly on pharmaceu tical products and printed matter).  Imports of all 
inputs are duty free, either under the industrial ince ntives regulations (Chapter III(4)), or under the 
statutes of the respective state-owned companies.   
(iii) Policies in selected industries 
(a) Metals  
58. The Dubai Aluminium Company (Dubal) plant, established in 1975 and owned by the Dubai 
Government, is now one of the world's biggest smelting complexes, with a capacity of around 
760,000 tonnes a year of high grade aluminium in 2004.  Dubal reports that its unit cost of production 
is among the world's lowest.  It processes imported alumina, and exports primary aluminium products 
to almost 50 countries.  In March 2005, Dubal en tered into a provisional agreement with one of 
India’s engineering and construction conglomerates  (Larsen and Toubro) to build a Dh3.67 billion 
combined bauxite mining and alumina refinery in India’s Orissa state.  In April 2005, Dubal and 
Global Alumina Products Corporation signed a memo randum of understanding for Dubal to make a 
substantial investment in Global Alumina.  D ubal contributes 12% to Dubai's GDP and 50% to non-
oil revenues.
23  Given the importance of this industry for its economy, the UAE has proposed the 
elimination of tariffs on primary aluminium in the WTO.24   
59. Dubai Cable Company  (Ducab) manufactures low- and medium- voltage electric cables.25 
Established in 1979, Ducab is a joint-venture be tween the Dubai and Abu Dhabi Governments (50% 
                                                      
22 HCSEL online information.  Available at:  http://www.hcsez.ae/english/ . 
23 Dubal online information. Available at: http://www.dubal.co.ae.  
24 WTO document TN/MA/M13, 6 August 2004. 
25 Information is available at Ducab's website:  http://www.ducab.ae. WT/TPR/S/162 Trade Policy Review 
Page 60 
 
 
each).  Ducab's sales revenues in creased by 30% in 2004 to US$187 million (Dh 687 million).  The 
company has recently expanded its business by entering into new export markets in Iran, India, Jordan, and Tanzania under major projects and distribution agreements. 
60. A steel factory, with an initial capacity of 5 00,000 tonnes of 10-32 mm diameter steel per 
annum, was built in the Mussafah Industrial Area, in Abu Dhabi.  The factory uses imported raw 
material. Expansion plans include the constructio n of a 205,000 tonnes per year smelter, a 351 MW 
power station and a desalination plant with a capacity  of 2,000 cubic meters of fresh water per day. 
Gas will be supplied to the project through a newly constructed pipeline.   Information on government 
ownership in the plant was not provided. 
61. A magnesium alloy plant is under construction at Sharjah's Free Zone.  The magnesium 
smelter project is being promoted by the Sahari Gr oup of Abu Dhabi and Normans of Albania, with a 
50% stake each in the project.  The plant's initia l production capacity will be 20,000 tonnes per year 
of magnesium products, to be increased to 60,000 tonnes upon completion.  Raw material (magnesium) will come from mines in Albania.  The production is expected to be exported.  
According to the authorities, there is no government ownership in the plant.  
(b) Chemicals, and plastics  
62. ADNOC's activities include the manufacture of petrochemicals (section (3)(ii) above). For 
example, Borouge is a joint-venture, establishe d in 1998 in Abu Dhabi (Ruwais), between ADNOC 
and Borealis, one of Europe’s largest polyolefin (p lastics) producers (Table IV.5).  Its US$1.2 billion 
petrochemical plant, with an annual capacity  of 580,000 tonnes, produces polyethylene.
26  
63. Chemical fertilizer production began in the UAE in 1980 with the establishment by ADNOC 
of Ruwais Fertilizer Industries (FERTIL), which cu rrently has a capacity of 1,050 tonnes of ammonia 
and 1,500 tonnes of urea per day.  Abu Dhabi Fertili zer Industries, set up as a joint-venture  between 
the UAE-based International Technical Trading Co mpany (64%) and SQM of Chile (36%), produces 
40,000 tonnes of fertilizer annually.  Other fertili zer manufacturing projects are located in Jebel Ali 
Free Zone.   
(c) Cement 
64. The cement industry is one of the oldest manufacturing industries in the UAE, dating back to 
the mid 1970s.  In 2004, cement and clinker produc tion were estimated at 9.8 million tonnes and 
7.2 million tonnes, respectively.  Limestone is availa ble locally, but bauxite, iron ore, and gypsum are 
imported.  Twelve factories operate throughout th e country, producing clinke r and Portland cement; 
one factory in Ra's al-Khaimah manufactures white cement.  Total capacity is estimated at 10.6 
million tonnes of cement, and 7.2 million tonnes of clinker.  A shortage of cement and clinker 
throughout the UAE in 2005, reflected the ongoing construction boom.  There has been an important 
expansion of capacity as the authorities consider that the market for these products will increase 
substantially.  The Abu Dhabi Government has announced  plans to privatize the Al Ain cement plant, 
which has been renamed the Emirates Cement Factory.   
(d) Pharmaceutical products  
65. Federal Law No. 4 of 1983 is the main law re gulating the pharmaceutical industry.  The 
Ministry of Health is responsible for licensi ng pharmaceutical companies, both in the Customs 
territory and in the free zones.  According to th e authorities, most production takes places, in six 
                                                      
26 Further information is available online at: http://www.borouge.com. United Arab Emirates WT/TPR/S/162 
 Page 61 
 
 
companies outside the free zones, although there are two companies in the free zones.   Currently, the 
largest company (both in terms of capital and sal es) is the Gulf Pharmaceutical Company (Julphar) 
based in Ra's al-Khaimah.27  Founded in 1985, Julphar manufactures 275 varieties of medicine 
(including antibiotics), only 7% of which ar e consumed locally.  Exports in 2004 exceeded 
US$135 million and went to 40 countries.  Julphar has fi ve factories: three in Ra's al-Khaimah, one in 
Ecuador, and one in Germany.  The Ra's al-Khaimah  Emirate owns 25% of the capital of Julphar.  
Specialized in the production of intravenous solutio ns, Gulf Inject was set up by a group of local and 
Gulf business interests in the Jebel Ali Free Zone.  The company exports to around 26 countries.  According to the authorities, aside from Julphar,  all companies in the industry are entirely under 
private ownership.  Imports of pharmaceu tical products are generally duty-free.   
(5) S
ERVICES  
(i) Construction 
66. The exceptionally fast pace of industrialization and economic development in the UAE has 
coincided with a global property boom, driven by lo w interest rates and accelerating with rising oil 
prices.  In the 1975-00 period, the construction market was driven mainly by the traditional public 
sector customers such as utilities and ports.  Since 2000, the market has been driven by large projects.  
Its rapid advances have also been encouraged by  the gradual opening of  property acquisition to 
foreigners in Dubai.  It is estimated that half the number of flats sold in the city in 2004-05 were to 
international buyers and speculators.28  The other emirates do not grant freehold rights to foreigners.    
67. With nearly US$100 billion of major projects unde r way in Dubai alone in October 2005, the 
UAE is facing shortages of contractors in certain specialized construction services, such as power 
generation stations, metro lines, bridges, marine proj ects, and sewage treatment plants.  As a result, 
clients are turning to foreign contractors  for these services.  Project management contractors, both 
local and foreign, coordinate th e process on behalf of their clients, from concept to completion.  
Traditionally, designs are completed before contr actors are asked to compete for the construction 
contract. 
68. Construction services are not highly protected;  many foreign project contractors are active in 
the UAE.  The UAE generally accepts internationally recognized standards and technical regulations.  
Professions in construction are regulated at emirat e level, but foreign professionals are numerous.  
These factors have helped to maintain construction prices at relatively low levels by international 
comparison.  However, the UAE has not in cluded any construction services under its GATS 
Schedule.29   
69. The UAE's relatively open labour market, and the resulting availability of both skilled and 
unskilled foreign construction workers has facilitated the expansion of its property market.  Unskilled 
construction labourers typically work extended hour s, for monthly salaries of US$200-250 and with 
frequent reports of delayed payment.30  Workers are lodged in labour camps close to the construction 
sites.  Following a campaign by local doctors con cerned about the increasing incidents of heatstroke, 
the Ministry of Labour and Social Affairs (MLSA) announced in late June 2005 that on-site workers 
would be granted a four-hour break starting at 12:30 pm from July to August.  In September 2005, the MLSA issued an unprecedented "tough ruling" against a construction company following 
                                                     
 
27 Available at:  http://www.julphar.com/. 
28 Financial Times , 20 September 2005. 
29 WTO document GATS/SC/121, 2 April 1996. 
30 Middle-Eastern Economic Digest , 15-21 July 2005. WT/TPR/S/162 Trade Policy Review 
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demonstrations for non-payment of wages.31  Since taking office in November 2004, the MLSA has 
introduced reforms to improve inspection and penali ze non-respect of labour legislation, which have 
reportedly met stiff resistance from the business community.   
(ii) Transport 
(a) Overview 
70. Since the mid 1980s, a strategic policy priority of the UAE is to become a major aviation and 
maritime transport hub between Europe and South-E ast Asia.  It has largely succeeded in this.  The 
governments of the emirates have invested vast resources in developing port and airport infrastructure, which have also been among the lead ing subsectors attracting FDI, albeit always on the 
basis of minority shareholdings.  Transport not onl y plays an important role in the economy of the 
UAE, but the transport network has effectively become central to the entire region.  The UAE currently has no railway system. 
71. Decision-making, including operational manageme nt, is under the responsibility of the airport 
and port authorities of each emirate;  DP World a nd Dubai airport are under the authority of the 
respective emirates.  This raises important coordi nation issues, given the presence of two world-class 
airports and two major sea ports within 150 km.  A National Committee for Port Security is 
responsible for the security of the main ports. 
72. The UAE's market access and national treatment policy in the field of transport services may 
differ from one emirate to another.  In general, th e main restrictions to competition, including from 
foreigners, are through the dominant position of an d control through state-owned enterprises, and the 
requirement for foreign commercial presence to be  in the form of minority (49%) ownership, 
including under the Commercial Companies Law.
32 
73. The UAE has not included any transport sector in its 1994 Schedule of GATS 
Commitments.33  Given the comparative advantage of the UAE in transport, a substantial WTO offer 
in this area, including through a relaxation of r estrictions on foreign majority ownership, would 
consolidate the traditionally liberal UAE transport policy, and sustain substantial growth in the 
transport subsector.   
(b) Maritime transport services 
74. The growth of maritime transport to and from the UAE has  resulted largely from the 
development of Dubai's Jebel Ali Port, a larg e and rapidly expanding deep seawater port 
infrastructure.  The port has allowed the developmen t of major shipping and transhipment activities as 
well as shipbuilding, repairs, and maintenance services.  The UAE has been a member of the 
International Maritime Organization (IMO) since 1974.34     
75. The UAE's merchant fleet  comprises shipping companies registered in the UAE and at least 
51% owned by nationals.  It ranked 31st worldwide at end 2001, with 3.1 million deadweight tonnes, 
and 180 ships;  42 were under the national flag and the rest under foreign flags.  Some 85% of all 
                                                      
31 The Emirate Economist , Sunday 25 September 2005. Available at:  
http://emirateseconomist.blogspot.com/. 
32 Federal Law No. 8 of 1984 Concerning Commercial Companies. 
33 WTO document GATS/SC/121, 2 April 1996. 
34 IMO online information.  Available at:  http://www.imo.org/home.asp. United Arab Emirates WT/TPR/S/162 
 Page 63 
 
 
tonnage transported to and from UAE ports was shipped under foreign flag. 35  The total deadweight 
tonnage at end 2001 was composed mainly of oil ta nkers (41%), container ships (24%), and general 
cargo, including passengers (19.5%).  Activity of bu lk carriers is insignificant.   The number of 
registered large vessels had increased to over 750 in 2005.   
76. The regulation of shipping services is shared  between the MOC and the respective port 
authorities. The MOC is in charge of all secur ity, seaworthiness, and communications aspects of 
marine navigation, as well as compliance with intern ational standards.  The regulation distinguishes 
three types of ships:  foreign flag vessels calling at UAE ports; national flag vessels;  and foreign flag vessels operating in UAE territorial waters, mainly in the context of offshore projects (e.g. Dubai 
Maritime City, Palm Island). The MOC regul ates all those operating in UAE waters.   
77. Foreign flag vessels must have a contract with one of the federal or local governments to 
operate in the UAE waters, and cannot carry out cab otage on their own account.  This is designed to 
encourage local companies to register vessels unde r the UAE flag.  Crews working on ships servicing 
the territorial waters must have residency visas.  Foreign companies must obtain approval from the MOC in the form of a licence.  All ships operating in the territorial waters must be classed under one 
of the categories of the International Association of Classification Societies (IACS).  In addition, 
foreign ships must not be older than 25 years, and local ships must have IACS approval issued within 
five years.   
78.  The United Arab Shipping Company (UASC) is the largest container carrier to and from the 
Middle East.  UASC was established jointly by the si x GCC states, in July 1976.  The  share owned 
by the UAE Federal Government is 16.5%.  A num ber of other domestic shipping companies are 
partly or fully owned by the Federal Government or by the governments of the emirates.  These 
include ADNATCO, National Petroleum Constructi on Company, and National Marine Dredging 
Company (all three owned by the Federal Government );  Itisalat  and Delma Co-operative Society, 
owned by the Abu Dhabi Government;  and Arab Maritime Petroleum Transport Company (in which 
the Abu Dhabi Government owns 9.1%, the Dubai Government, 9.1%, and nine other Arab countries 
have 9.1% each).    
79. The UAE shipping agency and freight forwarding market comprises numerous companies.  
The UAE is host to one of the world's largest shipping agencies,  Gulf Agency Company (GAC), 
based in Jebel Ali Free Zone since 2002.  The comp any also supplies spare parts and various services 
to vessels worldwide. GAC is entirely private. 
80. The UAE has 15 large commercial ports (including oil terminals) with a total capacity of over 
70 million tonnes.  Dubai's Jebel Ali Port, which ha ndles primarily bulk cargo and industrial material 
for Jebel Ali Free Zone, is the world's largest man- made port.  The UAE's ports export mainly oil and 
gas, but also raw materials and finished goods.  Im ports consist of intermed iary and consumer goods, 
as well as a significant re-export trade to other econom ies in the Gulf region, East Africa, and the 
Indian subcontinent.  The UAE ranks among the t op five locations in the world for bunkering and 
other ship chandling;  and its ship-repair facilities and ship-building capacity are developing rapidly.  
81. As noted, port services are regulated at emirate level.  Most port handling services, including 
crane lifting, loading, discharging, stevedoring and stowage, storage and warehousing, as well as 
pilotage, appear to be supplied exclusivel y by the emirates' port authorities.    
                                                     
 
35 UNCTAD online information, Review of Maritime Transport , various issues.  Available at 
http://www.unctad.org. WT/TPR/S/162 Trade Policy Review 
Page 64 
 
 
82. Dubai's ports, with over 100 bert hs between them, play a pivotal role in UAE trade, and 
increasingly in regional and world trade.  Duba i Ports Authority (DPA ) managed them until 
September 2005, and handled 5.15 million "twenty feet  equivalent unit" (TEU) containers in 2003, the 
world's seventh largest throughput, before a record  growth of 25% in 2004.  On  28 September 2005, 
the Dubai Ports Authority and Dubai Ports Interna tional merged into a single new global port operator 
– DP World.  In addition, a new regulator – the D ubai Ports and Jebel Ali Free Zone Authority – was 
created to oversee the regulation of Dubai's ports.   DP World is fully owned by the Emirate of Dubai. It handles enquiries, cargo clearance, as well as manifest and cargo handling services, online.
36  
Registered users can view and pay duties online.  Information on port dues a nd other fees and taxes 
for the Dubai ports is available electronically.37    
83.  Large outflows of FDI have taken place in port services, reflecting both the availability of 
domestic financial resources, and the growing dome stic expertise in the area of port management. 
Dubai Ports International (now DP World) had recently made large investments in other ports, including abroad.  DP World runs the port of Constantza in Romania. In December 2004, DPI 
purchased CSX World terminals' international portfo lio, including the operations of Busan's New Port 
in Korea, Hong Kong's Asia Container Terminals, as  well as port terminals in Australia and Germany.  
In January 2005, DPI announced agreements to ta ke over operational management of Abu Dhabi and 
Fujairah ports.  It also bid successfully to build  and operate the planned international container 
transhipment terminal on Vallarpadam Island in Indi a.  DPI took over the management of the Djibouti 
airport in 2003.  In late 2005, DP World entered into negotiations with a view to purchasing P&O of 
the United Kingdom. 
84. The marine terminals of Jebel Dhanna and Ruwais, Umm al-Nar, Das Island, Zirku and 
Mubarraz islands handle the bulk of the UAE's cr ude oil and gas exports.  They are owned and 
operated by the Abu Dhabi Petroleum Ports Operating Company (ADPPOC).   
85. Port Zayed is Abu Dhabi's main general cargo port, established in 1972.
38   There are 
21 berths for handling general cargo, including bulk cargo, ro-ro, project cargo, and petroleum 
products. Expansion plans at Port Zayed envisage two-phase development of the port over 15 years, 
ending in 2013.  Operated by the Abu Dhabi Seaport  Authority until 2005, Port Zayed  is to be 
managed and operated by DP World as of the first quarter of 2006.  The port's affairs are controlled 
by the Abu Dhabi Finance Department.  Certain activities can be supplied by private companies 
provided that one member of the company's board  is a representative from the Abu Dhabi Finance 
Department, these are:  stevedoring and port cleaners;  construction services;  computer and IT 
systems suppliers and maintenance services;  contai ners gantry cranes and equipment manufacturing 
and maintenance services.    
86. Sharjah's ports, Port Khalid, Hamriyah Port  and Khorfakkan Container Terminal (KCT) on 
the east coast have a combined total of 35 berths .  Khorfakkan is the country's second largest 
container handling facility, and the main port for tr ade with Iran. Sharjah's ports are under the Sharjah 
Port Authority (Sharjah's Department of Seaports  and Customs). Port operations are governed by the 
Port Act of 1977.  In 1976, the Authority establis hed the company Gulftainer to manage and operate 
the container terminals in Port Khalid and Khorfakkan.   Gulftainer also owns one of the largest heavy 
                                                      
36 See DP World online information.  Available at:  http://www.dpworld.com/ 
fullnews.asp?NewsID=25. 
37 See in particular "Dubai Port Tariff". Available at:  http://www.dpa.co.ae/tariff/ 
generalconditions.pdf;  and Port Zayed online informa tion. Available at:  http://www.portzayed.gov.ae/ 
Services/Tariff.htm. 
38 Port Zayed online information.  Available at:  http://www.portzayed.gov.ae/home/PortZayed.htm 
[7 September 2005]. United Arab Emirates WT/TPR/S/162 
 Page 65 
 
 
transport fleets in the United Arab Emirates and a container repair company.  Ajman Port, which also 
services Ajman Free Zone situated in the port, h as eight berths designed to handle both container and 
general cargoes.  Plans are under way to deepen the port.  It has special fa cilities to handle cargoes of 
chemicals, waste paper, and fodder.  The Ajman Port Authority has also set up two dry docks to 
provide maintenance and repair services.   
87. Cement, marble, and gravel from nearby quarries and factories are the main products shipped 
from Port Saqr in Ra's al-Khaimah.  In 2004, Ra 's al-Khaimah Port Authority awarded the Kuwaiti 
firm KGL a US$45 million contract to build, operate, a nd manage its container terminal at Port Saqr 
for 21 years.    
88. Bulk cargo tonnage of ships calling at Fujairah Port rose from 6.1 million tonnes in 2002 to 
8.9 million tonnes in 2004, much of it in the form of bunker fuel.  Fujairah is now one of the world's three largest bunkering centres.
39  As noted, Fujairah Port's contai ner activity is ope rated and managed 
by DPI (since March 2005).  Most other activities in cluding bunkering, continue to be managed by the 
Fujairah Port under a 1982 Ordinance.40  However, maintenance servi ces are outsourced to companies 
such as Arab Heavy Industries Company, experts in th e field of structural steel fabrication, tank and 
ship building, and marine services  
(c) Air transport services 
89. Each emirate is fully responsible for developing its civil aviation;  this partly explains the 
relatively large number of UAE international air ports.  The UAE's aviation industry has advanced 
sizeably over the past few years, fuelled by consider able airport expansion, as well as by the launch of 
five new airlines.  Moreover, the world's largest ai rcraft order was made by a UAE airline in 2003, 
and large purchases have been made by another.  Th e UAE civil aircraft registry contained about 110 
aircraft in 2003, a number expected to double by 20 13.  Some 20 airlines were in operation in late 
2005.41  The six UAE international airports are b ecoming leading regional aviation hubs, connecting 
Europe and South-East Asia.   
90. One of the strategies that have led to the development of air transport services in the UAE is 
the use of the UAE territory as land-bridge on interc ontinental routes.  Typically, bilateral air service 
agreements have been concluded with countri es in Europe and Asia and UAE airlines have 
subsequently exploit sixth freedom rights, e.g. ser ving routes between European  and Asian cities with 
a stopover in a UAE city.42  UAE airlines have also exploited fifth freedom rights on routes where 
available.43  As a result, certain UAE companies ar e now among the dominant airlines on the New 
Zealand-Australia route. 
                                                      
39 With Singapore and Rotterdam. 
40 Port of Fujairah Ordinance 1982. Av ailable at: http://www .fujairahport.ae. 
41 See "Air Carriers of the Mi ddle East".  Available at:  http://www.airlinedata.com/ 
area6.htm#Emirates [14 September 2005]. 
42 The sixth freedom right is defined by ICAO as the right, in respect of scheduled international air 
services, of transporting, via the home  State of the carrier, traffic moving between two other States.  It is a 
combination of the third freedom and fourth freedom rights (granted by one State to another State to 
respectively put down and take on, in the territory of the first State, traffic coming from or destined for the home 
State of the carrier) ("Freedoms of Air".  Available at:  http://www.icao.int/icao/en/trivia/ 
freedoms_air.htm [14 September 2005.]). 
43 The fifth freedom is defined as "the right or privilege, in respect of scheduled international air 
services, granted by one State to another State to put down and take on, in the territory of the first State, traffic 
coming from or destined to a third State (e.g. Dubai – Sydney – Auckland).  WT/TPR/S/162 Trade Policy Review 
Page 66 
 
 
91. There are no preferences for GCC carriers or companies in air transport.  The UAE is an 
ICAO Contracting State.44  Gulf air and Emirates are members of the International Air Transport 
Association (IATA).   
Major airlines and transportation services 
92. In 2004, Emirates airline, which is fully owned by the Government of Dubai was the world's 
fastest-growing intercontinental airline, one of the wo rld's five most profitable, and the 17th largest in 
terms of cargo tonnage.45  It operates from Dubai Airport, and since its creation in 1985 has grown at 
an annual average of over 20%.  Emirates airlin e carried over 10 million passengers in the 2003-04, 
and declared a record US$429 million profit.  Th e airline also announced the largest order in 
commercial aviation history at the 2003 Paris Air Show, worth US$19 billion.  With 45 A380-800s on 
order, which it will start receiving in 2006, Emirates airline is the largest customer of the future 
Airbus super-jumbo.  It operates services to 78 cities in 54 countri es.  Emirates SkyCargo, the cargo 
division of Emirates airline, moved more than 660,000 tonnes of freight in 2003-04.  Emirates airline has also purchased large shares in fore ign air companies, such as Airlanka in 1998.  Emirates airline is 
not a member of the three major international air line alliances, but operates in code-share on a number 
of routes, notably with major U.S. airlines. 
93. Gulf Air, one third owned by each of the Governments of Abu Dhabi, Bahrain, and Oman, 
celebrated 54 years of operations in March 2004.  Th e airline's network covers  more than 45 cities in 
34 countries, with a fleet of 34 aircraft.  It carried  6 million passengers in 2003.  In 2001, the airline 
began a three-year recovery plan to halve its losses and eventually move back to profitability. Gulf 
Traveller, a full service, economy subsidiary of Gu lf Air, was launched in 2003 and, with average 
loads in excess of 70%, has exceeded  expectations;  it has contributed significantly to Gulf Air's 
recovery.  Gulf is not part of any of the major a lliances;  it has code-share agreements with American 
Airlines and a number of Asian and Middle-Eastern airlines. 
94. In July 2003, the Abu Dhabi Government launc hed Etihad Airways, fully funded and owned 
by the Abu Dhabi Government.  By mid-2004, it had a fleet of six aircraft.  Etihad has ordered 24 
Airbus aircraft, including four A380s, and has take n options to purchase 12 additional aircraft;  the 
total value of the agreement exceeded US$7 billio n.  Etihad services 16 destinations.  A cargo 
division was launched in late 2004.   
95. The Government of Abu Dhabi is a shareholde r in several other aviation companies. Abu 
Dhabi Aviation, established in March 1976, is th e largest commercial helicopter operator in the 
region, with a fleet of over 40 craft.  It is 30% owned by the Abu Dhabi Government.  The bulk of the 
company's business is in support of Abu Dhabi offsho re oil, engineering, and construction companies, 
but also includes offshore rescue services and the aerial application of agricultural sprays and 
fertilizers.  The company has expanded its operations  in recent years to other countries, including 
Oman, Yemen, Saudi Arabia, Spain, and Iran.  Roya l Jet, a luxury air charter service was launched in 
May 2003.  It currently operates a fleet of four aircraft.  A division of Royal Jet, the Royal Med 
service, attracts passengers travelling for medical assistance;  the Royal Med air ambulance, equipped 
with state-of-the-art medical equipment, was launc hed in 2003.  Royal Med now accounts for almost 
half of Royal Jet business.  Royal Jet is a joint-vent ure, shared equally by Amiri Flight of Abu Dhabi 
and Abu Dhabi Aviation. 
                                                     
 
44 International Civil Aviation Organization online in formation.  Available at :  http://www.icao.int/ 
index.html. 
45 Airline Business , November 2004. United Arab Emirates WT/TPR/S/162 
 Page 67 
 
 
96. Air Arabia, the Sharjah government-owned airlin e, commenced operations in October 2003 as 
one of the Middle East's first low-cost services.  It  was established by a decree issued by the Ruler of 
Sharjah.46  The airline carried over 160,000 passengers in its first six months.  Presently, it operates 
flights to 24 destinations in 14 countries within th e Middle East and the Indian subcontinent.   The 
owners of the company are the Sharjah Departme nt of Civil Aviation and the Sharjah Airport 
Authority (see below). 
97. The General Civil Aviation Authority (GCAA) is a federal, autonomous body established by 
Federal Law No. 4 of 1996.47  It oversees all activities related to  civil aviation and provides navigation 
services, registration, and licensing services for the UAE aviation industry.  Companies wishing to 
conduct commercial air transport in the UAE must obtain an Air Operator Certificate from the 
GCAA.  The GCAA proposes air transport policy gene ral guidelines and relevant legislation to the 
Council of Ministers, and enforces intern ational agreements and conventions.  
98. New foreign entrants are allowed into the ma rket on the basis of bilateral air transport 
agreements.  The UAE also signed open-sky agreemen ts with the United States in April 1999, and 
with five other countries thereafter. 48  The key parameters contained in these agreements are equity 
and reciprocity of capacity and frequency, multi-d esignation, and a double disapproval tariff regime.  
However, the authorities have stressed that the UAE  prefers an open tariff regime freely determined 
by the airlines.  Cabotage is reserved for UAE carriers unless specifically authorized.   
99. "Wet" leasing of aircraft (with crew and, typical ly, fuel, maintenance, and insurance) by UAE 
carriers is not restricted to UAE companies or citizens.    
100. There are no nationality requirements for crews engaged in domestic or international air 
passenger and freight services.   However, the GCAA has embarked on a nationalization programme 
since 1998.  This has led to an increase in the number of UAE nationals serving in the GCAA, 
including in the Air Traffic Control Centre, and more generally in the Air Navigation Services 
directorate.  According to the GCAA, this polic y has resulted in 54% nationalization of the GCAA's 
total personnel.  According to the authorities, the nationalization policy does not compromise the 
overriding objectives of ensuring safety and quality.   
                                                      
46 Amiri Decree of 3 February 2003. 
47 General Civil Aviation Authority  online information.  Availa ble at:  http://w ww.gcaa.ae/en/. 
 48 As at January 2006, air services agreements, incl uding in some cases open-skies agreements or 
memoranda of understanding, were in  place with: Algeria; Argentina ; Arme nia; Australia; Austria; Azerbaijan; 
Bahrain; Bangladesh; Belarus; Belgium; Bosnia and Herzegovina; Botswana (MOU); Brazil; Brunei 
Darussalam (open skies); Bulgaria; Burkina Faso (MOU); Cambodia (MOU); Cameroon; Canada; Chad 
(MOU); Chile (open skies); China; Comoros (MOU); Croatia (MOU); Cyprus; Czech Republic; Democratic 
Republic of Congo (MOU); Denmark; Egypt; Former  Yugoslav Republic of Macedonia (MOU); France; 
Gambia; Germany; Ghana; Greece; Hong  Kong, China; Iceland; India; In donesia; Iran (MOU); Iraq; Ireland; 
Italy; Japan; Jordan; Kazakhstan; Kenya; Kuwait; La tvia; Luxemburg; Macao; Madagascar; Malaysia (open 
skies); Maldives; Malta; Mexico; Morocco; Mozambique  (MOU); Namibia; Nepal; Netherlands; New Zealand 
(open skies); Niger (MOU); Nigeria; Norway; Pakistan; Peru; Philippines; Poland; Portugal; Qatar; Republic of 
Korea; Republic of Yemen; Romania; Russia; Rwanda (MOU); Saudi Arabia; Seychelles; Singapore (open skies); Slovenia; South Africa; Spain; Sri Lanka; Suda n; Switzerland; Syria; Taji kistan (MOU); Tanzania; 
Thailand; the Separate Customs Territory of Taiwan; Penghu; Kinmen and Matsu; the United Kingdom; the 
United States (open skies); Tunisia; Turkey; Turk menistan; Uganda; Ukraine (MOU); Uruguay (MOU); 
Uzbekistan; Vietnam; Zambia (MOU); and Zimbabwe. WT/TPR/S/162 Trade Policy Review 
Page 68 
 
 
Airport and related services 
101. The UAE's six international airports vary co nsiderably in size and capacity.  Dubai, the 
world's 16th in terms of international passenger throughput , and 17th in terms of cargo tonnage, has 
become the main aviation hub in the Middle East.  Abu Dhabi, 170 km away, is competing rapidly, 
thanks to government support and the new airline E tihad Airways, which is headquartered there.  
While air transport services are regulated at federal level, airports are run at the emirate level.    
102. Dubai Airport is one of the busiest in the re gion with over 105 airlines. Its rapid growth has 
been concomitant with massive expansion of the s upporting infrastructure.  Dubai Cargo Village hosts 
cargo facilities and services.  In 2003, the Village handled over 956,000 tonnes of cargo, up by 21% 
from the previous year.  In addition, work started at  Jebel Ali in February 2005 for the construction of 
another Dubai airport on an area covering 140 km2, the largest of its kind.  The new airport city at 
Jebel Ali will be the largest air-sea transportation centre in the Middle East.  The Dubai Civil Aviation 
Authority controls and operates Dubai airports and has the task of raising funds to finance airport-
related projects;  to date, most projects ha ve been financed by the Dubai Government.   
103. Passenger traffic through Abu Dhabi International Airport grew by 28% in the first quarter of 
2004. The new services offered by Gulf Traveller and the launch of Etihad Airways partly explain this 
growth;  ongoing expansion is expected to double passenger capacity.  At present, 50 airlines operate 
from Abu Dhabi.  Abu Dhabi Cargo Village, whic h opened in April 2003, specializes in cargo, 
storage, and re-export operations, and is competing to become one of the biggest cargo hubs in the 
region.  Al Ain International Airport, Abu Dh abi's second international airport, is located 
23 kilometres from Al Ain City. Ten airlines, including Gulf Air, operate out of Al Ain.  The Abu 
Dhabi Department of Civil Aviation owns a nd operates Abu Dhabi and Al Ain airports.   
104. Sharjah International Airport dates back to 1932 when Imperial Airways – the forerunner of 
British Airways – constructed an airfield in the emirate as a stopover en route to India and Australia. This was the first airport in the country.  In 2004, the airport recorded a total of 1.6 million 
passengers.  Sharjah Airport also has a major expans ion programme.  It is a popular trans-shipment 
point, especially for inter-modal cargo arriving by sea and air-freighted onwards.  Following an Amiri 
Decree, Sharjah International Airport is a financ ially independent body, run autonomously by the 
Sharjah Airport Authority.  Non-aeronautical activ ities (e.g. duty-free shops, car rentals, currency 
exchange) are generally outsourced, as well as certa in aeronautical services such as maintenance 
operations (carried out by GAMCO - se e below), fire and crash rescue.   
105. The Abu Dhabi-based Gulf Aircraft Ma intenance Company (GAMCO) commenced 
operations in 1987 to service Gulf Air, but has si nce expanded its customer base to encompass other 
international airlines and military clients. GAMCO  has also taken over maintenance operations from 
Sharjah Airport Authority. It is a joint-venture be tween the Government of Abu Dhabi and Gulf Air.   
(d) Road transport 
106. The UAE has a good highway transport system, which connects all the main cities of the 
country.  There are about 4,000 km of mostly hard-s urfaced roads.  The UAE is  connected by road to 
Saudi Arabia and Oman.  Road and other public tr ansport, including between Emirates, is regulated 
by the MOC.  All road transport companies, like all companies in the UAE, must be majority-owned 
by UAE nationals.  Road transport companies generally employ foreign drivers.  United Arab Emirates WT/TPR/S/162 
 Page 69 
 
 
(iii) Telecommunications 
107. The UAE has reached one of the highest telephone  penetration rates in the world in recent 
years (Table IV.8).  Mobile telephone penetration increased from 49% to 91% in four years, and to 
95% by the third quarter of 2005 (with 3.9 million ce llular services subscribers).  The number of fixed 
telephony lines has grown recently by about 4% per year, although the number of main lines per 
100 inhabitants felt from 35 at end 2000 to 29 at e nd 2004 (1.14 million subscrib ers), primarily due to 
population growth outstripping line growth.  The double-digit annual growth rate of mobile 
subscribers is not slowing, suggesting that the UAE  market is not yet at saturation level.  The 
estimated number of Internet users is also increasing rapidly.   
108. Important institutional and regulatory changes have taken place, although the sole supplier 
remains (in December 2005) the incumbent operator Etisalat, a 60% state-owned monopoly.  Etisalat's 
profits reached US$926 million in 2 004, mainly spurred by the growth of cell phone services.  Under 
the conditions in place in 2005, Etisalat pays the Fede ral Government a royalty of 50% of its total net 
profit.  Etisalat offers fixed-line local calls for fre e.  It was not possible to ascertain, on the basis of 
available data, whether Etisalat funds one line of business with another, as no separate accounts are 
maintained between domestic and international ac tivities, or between fixed and mobile services.  A 
second full service provider, with some federal gover nment participation, is expected to enter the 
market in 2006.   
109. Telecommunications services are among the few ac tivities effectively supervised at federal 
level, by means of the Federal Law by Decree 3/2003 and the Executive Order No. (3) of 2004.49  The 
Supreme Committee for the Supervision of the Te lecommunications Sector, consisting of four 
members appointed by Federal Decree, is entruste d with formulating and implementing the general 
2006-10 policy on telecommunications services.  Th e Supreme Committee is also responsible for 
issuing licences to providers of regulated activiti es.  The telecommunications law does not preclude 
other operators from being licensed, s hould the Supreme Committee so decide. 
110. A new Telecommunications Regulatory Au thority (TRA) began operations in 
November 2004.50  The TRA, together with the new regulatory and policy framework described 
below, is designed to facilitate the development of the country’s telecommunication and information 
technology infrastructure and services, in order to  meet national, regional, and international 
objectives.  The TRA is managed by a board of di rectors appointed by the Supreme Committee.   
111. The law outlines the objectives of the TRA.  In particular, the TRA must:  ensure that 
sufficient services are provided to users throughout the State;  ensure that licensees abide by quality 
standards;  enhance service level to the benefit of  users, security and public safety, and promote and 
develop the telecommunications and information tech nology industries in the State;  and "work on the 
development and upgrading of the telecommunication sy stem in the State through training, qualifying, 
establishing relevant educational institutions and a ttaining the latest releases of the apparatus, 
equipment and facilities in the telecommunications technology".   
                                                      
 49 Federal Law by Decree No. 3 of 2003 Regarding the Organisation of the Telecommunications 
Sector, issued on 3 April 2004, and its Executive or der are available at: http://www.tra.ae/main.html.  
50 Information on the TRA is available at:   http://www/tra/ae/main. WT/TPR/S/162 Trade Policy Review 
Page 70 
 
 
Table IV.8 
Telecommunications indicators, 2000-04  
 2000 2001 2002 2003 2004 
Telephone penetration      
Telephone lines per 100 habitants (%) 34.7 32.4 31.4 30.2 29.4 
Mobile subscribers per 100 habitants (%) 48.6 58.8 69.6 79.2 91.1 
Total full-time staff in telecommunica tion services  8,329 8,951 9,539 9,808 10,040 
Price indicators (US$)      
Telephone connection chargea .. 54.5 54.5 54.5 54.5 
Monthly subscription chargeb .. 4.1 4.1 4.1 4.1 
Cost of 3- minute local call .. free free free free  
Cost of 3-minute call to the United States or France  3.4 1.73 1.73 1.73 1.73 
    Cost of 3-minute call to Kuwait 1.9 1.73 1.73 1.73 1.73 
Revenues of Etisalat (US$ million) 514.1 560.1 593.2 683.8 773.3 
Connection and subscription charges 
Local and national fixed  calls 
Revenues from international fixed  calls 24.2
71.8
137.4 23.9
70.8
122.0 24.5 
69.9 
103.6 24.8 
71.5 
110.1 25.2
68.4
106.7 
Data/text services 13.4 22.3 26.9 35.8 47.8 
Leased lines 13.8 14.3 15.0 14.8 16.1 
Mobile communications services 212.4 258.7 295.8 361.0 427.1 
Expenditure by Etisalat (US$ million)c 338.6 374.4 411.0 470.9 520.0 
Total annual investment in teleco mmunications 148.4 136.5 84.8 73.9 101.1 
Internet usage      
Number of Internet hostsd 
  Percentage of population 3,344
 4,332
0.124 5,073 
0.135 5,572 
0.139 8,372
0.195 
Subscribers users from homee 
  Subscribers users from officef 
  Number of Internet cafésg 
  Dial-up subscribers 
  Broadband subscribers 
      Peak dial-up access cost (US$/hour) 
    Off peak dial-up access cost (US$/hour) 591,596
162,194
15
209,548
1,437
0.49
0.27 744,600
219,635
135
256,236
8,700
0.49
0.27 870,057 
296,459 
220 
290,513 
18,917 
0.49 
0.27 975,246 
391,931 
307 
317,202 
30,327 
0.49 
0.27 1,155,104
551,413
438
363,646
56,596
0.49
0.27 
a Connection charge includes standard telephone set.  b Subscription charged quarterly at Dh 45 a quarter.  
c Includes the 50% royalty to the Federal Government. d This refers to the number of shared web hosting subscribers.  
e Consist of dial-up and Al Shamil users. 
f Consist of dial-up, Business One, and leased line users. g This is the number of Al Mawrood, Etisalat's Internet café brand.  
h Consist of Al Shamil and Business One subscribers.  
Note: Exchange rate: Dh 3.6725-US$. 
Source: Etisalat and Telecommunication Regulatory Authority.  
112. The TRA has full authority for issuing and impl ementing regulations for telecom services and 
all licensed operators.  It is also responsible for the management of the frequency spectrum, for 
establishing and implementing standards for type a pproval of equipment, and for national numbering 
policy.  However, in 2005, these approvals were still performed by the incumbent Etisalat, under 
contract by the TRA.  The TRA also has full authority on interconnexion and price regulation.  In practice, new prices for telecommunications services were set by Etisalat in 2005 and subject to prior approval by the TRA.  Cross-subsidization is subject to reporting obligations under the Executive 
Order.  Licensees are obliged to "k eep separate accounts for the licen sed activities and to organize the 
financial subsidy exchange betw een these activities".  Appeal procedures are in place against TRA 
decisions made in connection with interconnection disputes.
51   
113. Providers of telecommunications services are re quired to ensure portability of numbers, and 
freedom of choice in the selection of suppliers of  national and internati onal connections. The only 
universal service obligation (USO) explicitly menti oned in the Executive Order is the provision of 
                                                      
51 Interconnection Dispute Resolution, 31 December 2005. United Arab Emirates WT/TPR/S/162 
 Page 71 
 
 
free-of-charge calls to emergency services.  However,  according to the authorities, it is likely that 
Etisalat would be obliged to provide additional univer sal services should the need exist in the future.   
114. The TRA is required to prepare a national plan on the management of internet networks, to be 
submitted to the Supreme Committee for approval.  Inte rnet service providers require a licence (issued 
by the Supreme Committee) that specifies the conditions and standa rds for their activities.    
115. The UAE has not made any specific commitmen ts on telecommunications under the GATS; 
this reflects the monopoly situation prior to the 2004-05 reforms.52  Etisalat is pursuing a strategy to 
invest abroad.   In 2004, Etisalat won a licence to operate as a second mobile service provider in Saudi 
Arabia.  It also led the Kanartel consortium that won a licence to supply fixed line services in Sudan.    
116. A recent report, comparing competition in Arab cellular markets, reveals that the UAE is 
among the least competitive, with a relatively high le vel of State involvement, by regional standards.53 
(iv) Tourism services 
117. Over the last decade, the authorities have targ eted tourism as one of the main sources of 
future growth in the UAE. This policy has been su ccessful, and tourism is among the fastest growing 
subsectors in the country, accounting for a large shar e (12%) of GDP in 2003.  Neither the war in Iraq 
nor the regional political instability have  affected the sector's performance.   
118. Over the past decade, the number of visito rs to the UAE has grown from 1 to 6 million 
annually, representing an annual growth of three tim es the world tourism growth rate over the same 
period. The growth rate even accelerated dur ing 2000-04 despite the difficult geopolitical 
environment.  Among the possible explanations for this impressive performance are:  large public 
investment in airports, airlines, and other transpor t infrastructure, making it possible to travel to the 
UAE easily;  large investment in hotels; and large and varied sports and leisure projects that respond 
to wealthy consumers' preferen ces, such as the shopping festival, prestigious horse races, tennis 
tournaments, car rallies, and other highly-prized sports events.  
119. Some three quarters of tourism revenues and tour ist arrivals relate to the Emirate of Dubai;  
this share has been rising.54  In 2002, Dubai was ranked as the fast est growing tourist destination by 
the World Tourism Organisation, with 31% growth in  the number of visitors.  Dubai's hotel revenues 
were in the order of US$1 billion in 2003 (Table IV.9).   
                                                      
52 WTO document GATS/SC/121, 2 April 1996. 
53 Arab Advisors Group (2005). 
54 For data on tourism revenues, see Ministry of Economy and Planning online information.  Available 
at: http://www.uae.gov.ae/mop/Hotel/hotel03.htm. WT/TPR/S/162 Trade Policy Review 
Page 72 
 
 
Table IV.9 
Hotel indicators, 1995, 2000,  and 2003 
(Number of US$ million) 
 1995 2000 2003 Average annual percentage change 
over the period  
    1995-00 2000-03 
Number of hotels      
  Dubai 229 265 271 3.0 0.7 
  Abu Dhabi 39 49 52 4.7 2.0 
  Other emirates 29 39 43 6.1 3.3 
Hotel revenues       
  Dubai 389.3 714.8 1,093.5 12.9 15.2 
  Abu Dhabi 184.8 234.1 271.2 4.8 5.0 
  Other emirates 57.0 62.2 111.4 1.8 21.4 
Note: Exchange rate Dh 3.6725 = US$1.  
Source: Ministry of Economy and Planning,  Issues:  Hotels .  Available at:  http://www.uae.gov .ae/mop/E_home.htm 
[15 September 2005]. 
120. Tourism services are regulated at the emirate level.  Dubai Tourism and Commerce 
Marketing (DTCM) is responsible for the promoti on, planning, supervisio n, and development of 
tourism in Dubai.55  Dubai's government has been particularly instrumental in developing tourism, as 
a long-term alternative to reliance on oil revenues.  In particular, the Government of Dubai has made 
very large-scale investments in tourism development projects (Box IV.1).  In addition, consistent pro-
business policies have combined with an investor-fri endly environment.  For example, Dubai is the 
only emirate to allow property ownership by foreig ners in certain cases, although the law on foreign 
real estate ownership is still in draft form (January 2006) (Chapter II (5)). 
121. Under the GATS, the UAE has bound, without limitations, provision of hotel and restaurant 
services through modes 1 to 3, i.e. cross-borde r supply, consumption abroad, and commercial 
presence.  However, commercial presence is permitte d with a maximum foreign equity participation 
of 49%. 
                                                      
55 Dubai Department of Tourism and Commerce Marketing online information.  Available at:  
http://www.dubaitourism.ae/about/def ault.asp [20 September 2005]. United Arab Emirates WT/TPR/S/162 
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Box IV.1:  Selected projects in Dubai  
In October 2000, Dubai Internet City opened as a technology free-zone, launching Dubai’s quest to become a 
regional hub for a host of strategic sectors. The model was subsequently replicated for, inter alia , media, 
finance, healthcare, and microchips. 
In 2004, Dubai Healthcare City, a newly created free zo ne, began providing specialized medical and healthcare 
services with the help of partners and investors from regional and international clinics.  The project targets 
customers from the GCC, the Indian subcontinent, East Africa, and Central Asia.  A turnover of US$1 billion 
was expected in 2005. 
The Government of Dubai is progressively implementing plans to set up the Dubai International Financial 
Centre (DIFC), a dollar-based financial free zone designed to  mirror many aspects of the London Euromarkets.  
The DIFC is located in a multi-billion dollar complex of modern structures, called Capital Dubai, on which 
construction began in 2003.  The DIFC will encompass a comprehensive set of international financial functions, 
including institutional and investment banking, asset mana gement, insurance and re-insurance, Islamic finance, 
back-office operations, and the DIFX, an international exchange that will trade a full range of financial 
instruments.  Operations reportedly began in September 2005 with about 20-25 firms.  A number of major 
international firms have announced plans to participate and some key bond issuers, including the World Bank, 
have committed to listing issues on the DIFX.   
The DIFC is to be regulated by separate enabling laws  and a separate regulator, the Dubai Financial Services 
Authority (DFSA), and judiciary, both  at the emirate level.  This ap proach has been legitimated by a 
constitutional amendment and a UAE federal law, whic h allow emirates to form financial free zones, 
independent of the civil and commercial (but not criminal ) laws of the UAE and of th e emirates.  According to 
the IMF, since both the operating and regulatory arms of the DIFC are subordinate to the Government of Dubai, 
the governance structure holds the potential for conflicts of interest. 
The DIFC is intended to be segregated from the domestic financial sector. Banking operations in the DIFC are 
confined to institutional wholesale banking; both deposit taking and dealing in dirham are prohibited. As noted 
by the IMF, given the currency peg between the dirham and the dollar, loss of monetary control arising from the 
leakage of funds between the sectors is not a major issue;  however, the opportunity will be there for financial 
innovations to exploit regulatory arbitrage and produce shifts of funds between the DIFC and the UAE. 
The US$3 billion Palm Island project for the constructio n of two artificial, palm-shaped islands off Dubai's 
coast, is a by-product of the Jebel A li harbour expansion. Each island will have around 60 km of coastline. The 
islands will house residential homes and hotels, as well as entertainment and retail outlets. Infrastructure work 
on the first island was completed in 2004.  In addition, there are plans to build a si milar group of 200 artificial 
islands in the shape of the world map.   
With a total investment of almost US$6 billion and an assigned space of 4 billion square feet, Dubailand is one 
of the world's largest self-contained tourism projects, offeri ng leisure, sport, retail, an d entertainment attractions.  
The launch phase, covering initial infrastructure like ro ad works and utility provision, will extend from 2004 to 
2006. The main construction phase will be completed by 2010. Financing is mostly from the private sector, 
domestic and foreign.  Other projects include the construction of the world's first luxury underwater hotel, as 
well as the only indoor skiing centre in the Gulf region, Dubai Snow World.   In 2004, Dubai Holding was 
established as a Dubai government-owned organization charged with running some of the emirate’s major 
ventures. They include Dubailand, Dubai Internet City, and Jumeirah Beach Residence.  
Sources:   Dubai Health Care City online information.  Ava ilable at:  http://www.dhcc.ae;  Oryx Real Estate 
online information.  Available at:  http://www.oryxreal estate.com/;  "Dubailand:  Investment opportunities".  
Available at:  http://www.dubailand.ae; Dubai International Financial Centre online information.  Available at:  
http://wwwdifc.ae;  and IMF (2004). 
(v) Financial services 
122. Banking and financial intermediation services are regulated at federal level by the Central 
Bank of the UAE;  insurance servic es are also regulated at federal level under the authority of the 
Ministry of Economy and Planning.  In addition,  the Government of Dubai launched the Dubai WT/TPR/S/162 Trade Policy Review 
Page 74 
 
 
International Financial Centre, in early 2005,  offering insurance, banking, and financial 
intermediation services (Box IV.1). 
(a) Insurance services  
123. Total insurance expenditure in the UAE, as measu red by Swiss Re in terms of total premium 
value, was US$1.5 billion in 2004. This represents average annual growth of 12% (in nominal terms) 
relative to the value in 1996, the y ear of the UAE's WTO accession.  Expenditure, as a share of total 
world expenditure, increased to 0.05%.  Per cap ita insurance expenditure was US$350 in 2004, of 
which US$291 on non-life insurance and US$60 on life insurance.  Value added in the insurance 
subsector corresponds to about 1. 65% of GDP, up from 1.51% in 1996.56  The figures are relatively 
modest given the country's high per capita income, but are rapidly increasing, particularly in the life 
insurance business.57   
124. In 2003, 46 insurance companies were incorporated  in the UAE, half of which were foreign.  
Most companies are based in Abu Dhabi or Dubai, and carry out the full range of insurance business 
(Table IV.10); life policies still account for onl y a small proportion of overall business. The oil 
subsector represents a large share of insurance bus iness.  There are also 16 UAE insurance agents 
(only UAE citizens can be insurance agents), 166 national and nine foreign brokers, and 60 survey 
and damage assessment experts. 
Table IV.10 
Insurance premiums and claims paid, 2003 
(US$ million)  
Total UAE companies Foreign companies Joint-ventures  Type of insurance 
Claims Premiums Claims Premiums Claims Premiums Claims Premiums 
Car 919,7 1,327.7 615,3 890,8 184,7 415,4 19,6 21,4 
Cargo and transport 91,1 369,6 62,3 272,2 28,3 94,8 0,4 2,5 
Fire 171,2 606,5 140,9 544,3 29,8 57,4 0,4 4,7 
Theft 1,2 5,3 0,3 3,2 0,9 1,8 0,0 0,1 
Life 143,6 279,5 125,5 220,8 18,1 58,0 0,0 0,6 
Others 714,0 1,706.0 536,8 1,172.8 176,2 528,4 0,9 4,8 
Total 2,041.1 4,294.8 1,481.3 3,104.4 538.2 528.4 21.5 34.2 
Source: Ministry of Economy and Planning,  Issues:  Insurance .  Available at:  http://www.uae.gov .ae/mop/E_home.htm 
[16 September 2005].  
125. The insurance subsector is under the responsibilit y of the Ministry of Economy and Planning 
(MEP).  Federal Insurance Law No. 9 of 1984 is the main law covering the supply of insurance 
services.  No new foreign insurance companies we re allowed to establish in the UAE from 1978 to 
2004.    
126. The UAE made no specific commitments in its GATS Schedule regarding insurance services. 
Cross-border supply of insurance services is not po ssible for companies located abroad.  All assets 
and risks in the UAE must be insured domestically  (by domestic companies or by local branches of 
foreign companies, or by "agencies" (see belo w)). The maximum foreign ownership of domestic 
insurance companies allowed by law is 49%.   Re presentative offices cannot engage in business or act 
as agents.  This does not apply to reinsurance servic es, for which commercial presence is not required:  
                                                      
56 Swiss Re, Sigma , various issues.  Available at http://www.swissre.com. 
57 Ministry of Economy and Planning (2004). United Arab Emirates WT/TPR/S/162 
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UAE insurance companies can rein sure their risks from internati onal reinsurance markets.  UAE-
based companies can insure risks located abroad.   
127. Ministerial Decision No. 333 issued by the MEP on 25 November 2004 changed the 
conditions of licensing for foreign insurance comp anies.  In particular, the Decision specifies 
economic needs criteria, such as the level of dom estic demand for classes of insurance offered or 
whether new classes of insurance coverage are to be introduced by the applicant.  In addition, the 
Decision requires the appointment of a minimum number of UAE nationals as staff ("10% of the staff and at least two persons  in the first year, rising to 25% of the staff and at least 12 persons in the fourth 
year").  The authorities indicate that a few forei gn companies have applied for licences under the new 
conditions since October 2004, and one foreign co mpany has been granted a licence as a branch. 
128. Insurance companies wishing to  establish in an emirate must first apply to the emirate 
authorities for a licence;  the authorities then submit  the application to the MEP.  Eligible foreign 
insurance companies can either open a branch or enter into an agency  contract with a local insurance 
agent representing them.  Both domestic companie s and foreign branches must have minimum fully 
paid-up capital of Dh 50 million (US$13.6 million), and must deposit Dh 4.5 million for non-life, and 
Dh 3 million for life insurance with a local bank.  Combined life and non-life or non-insurance-related 
operations are not allowed.  The manager of a fore ign branch must be resident in the UAE.  The 
applicant must specify the expected premium rates to be applied, and the volume of expected local 
insurance business.  The foreign branch must, in addition, appoint a "local sponsor", whose main 
function is to facilitate licensing and registration.   
129. As noted, foreign companies may also supply the UAE market through the appointment of a 
local agent to represent them and market their produc ts (as distinct from the local sponsor employed 
by the branch).  A copy of the agency contract between the comp any and the local agent must be 
registered at the MEP.   
130. No taxes or stamp duty are levied at federal or emirate level on settlements from life and non-
life insurance, on insurance companies.   
(b) Banking  
131. The UAE has a large financial subsector relative to its size and population (Table IV.11).  At 
end 2004, UAE banks accounted for about one fifth of the total equity of the Arab banking market.  
The UAE has 46 commercial banks, of which 21 ar e national (with 383 branches as at December 
2004) and 25 foreign (with 112 branches).  In a ddition, some 50 representative offices of foreign 
banks are present in the market, but may not conduct transactions, accept deposits, open accounts, 
extend loans, perform or participate in any transactions.
58 
132. The UAE banking subsector is also generally sound and profitable:  in 2004, all 46 banks 
operating in the country met the minimum 10% capital -assets ratio;  and this ratio exceeded 16% (tier 
1 capital to assets ratio) for the subsector as a whole.   The gross non-performing loan (NPL) ratio was 
relatively high at 12.5% at end 2004, but considerab le provisions for loan loss coverage (94.5%) bring 
the net NPL ratio below 1%.   Bank loans ha ve grown substantially, with assets and deposits 
increasing at double digit rates on average between end 2001 and end 2004, an d are well distributed 
across industries.  Profitability of banks remained strong in 2003 and 2004, and was expected to have 
increased further in 2005.  A recent study suggests th at the UAE banking market is relatively efficient 
                                                      
58 Board Resolution No. 57/3/96 of 1996. WT/TPR/S/162 Trade Policy Review 
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and competitive; the market share of the three larg est banks declined from 37.4% in 1999 to 34.2% in 
2002.59 
Table IV.11 
Selected monetary and banking indicators, 2000-04 
(US$ billion unless otherwise specified) 
Indicators 2000 2001 2002 2003 2004 
Central Bank of UAE      
Total assets/liabilities 13.6 14.1 15. 0 14.8 18.4 
Foreign assets and gold hol dings 13.6 14.0 14.9 14.7 18.3 
Notes and coins issued 3.3 3.3 3.7 4.3 5.0 
Banksa      
Total assets/liabilities 75.4 81.5 90. 7 99.9 122.5 
Foreign assets 24.9 27.0 30.6 30.4 34.4 
Foreign assets to total assets (%) 33 33.2 33.7 30.5 28.1 
Foreign liabilities 7. 2 8.3 8.1 8.2 11.5 
Foreign liabilities to total liab ilities (%) 9.6 10. 2 9.0 8.3 9.4 
Depositsb 46.2 49.8 57.0 64.6 80.9 
Residents 44.0 47.0 53.9 61.6 77.2 
Non-residents 2.2 2.7 3.1 3.0 3.7 
Bank credit (net)c 34.0 36.0 42.9 52.4 69.6 
Residents 29.7 31.4 36.4 44.9 59.1 
Non-residents 4.2 4.6 6.5 7.5 10.5 
Total number of national banks and branchesd 311 324 245 367 383 
National banks 20 20 21 21 21 
National branches 291 304 234 346 362 
Total number of  foreign banks and branchese 109 109 112 112 112 
Foreign banks 26 26 26 25 25 
Foreign branches 83 83 86 87 87 
Number of workers in banks (in UAE)f 14,621 15,191 16,080 17,229 19,288 
a Including a restricted licence bank until 31.5.2003 
b Not including inter-bank deposits. 
c Not including loans to banks. 
d  Including pay offices, customer service units and automated branches e Including a pay office and customer service units 
f Excluding drivers, messengers, and guards. 
Source: UAE Central Bank online information. Available at : http://www.uae.gov.ae/mop/ UAE_figure/UAE_%2003.htm. 
133. The Emirates Banks Association, founded in 1982,  aims to represent and defend the interests 
of its domestic and foreign member banks a nd to exchange information regionally and 
internationally.60  Membership, which is not compul sory, covered 37 banks at end 2004. 
134. Banking and financial intermediation services are regulated at federal level by the 
independent Central Bank of the UAE61, under Federal Law No. 10 of 1980.  This law establishes five 
principal categories of institutions: commercial ba nks, investment banks, financial establishments, 
financial intermediaries, and moneta ry intermediaries, each of which must be licensed by the Central 
Bank.  Foreign banks are required to have the lega l form of a branch, licensed and regulated by the 
Central Bank.  Every commercial bank, including br anches of foreign banks, must have a minimum 
paid-up capital of Dh 40 million (US$10.9 million), or 10% of risk weighted assets in the UAE, 
whichever is greater.    
135. Since 1981, there has been a moratorium on the licensing of new foreign banks;  this 
moratorium followed a banking crisis with a run on th e local currency in 1977.  Foreign banks with 
more than eight branches had to close down the exc ess branches, those with less than eight had the 
                                                      
59 Al-Karasneh and Fatheldin (2005). 
60 Emirates Banks Association online informati on.  Available at:  http://www.eba-ae.com/ 
[19 September 2005]. 
61 UAE Central Bank online information.  Availabl e at:  http://wwwcbuae.gov.ae [19 September 2005]. United Arab Emirates WT/TPR/S/162 
 Page 77 
 
 
number of branches frozen.  Accordin g to the authorities, there are numerous pending applications for 
new foreign banks.  The Central Bank has reportedly announced that it will be issuing new licences to 
banks and allow existing foreign banks to ope n new branches provided they comply with 
emiratization quotas (see Box I.1).  This had not yet taken place (January 2006). 
136. Foreign banks pay a 20% local emirate tax on profits in each emirate.62  There are no 
restrictions on the presence of foreign senior staff in foreign banks (in early 2006), but this is likely to 
change.  All banks in the UAE are required to empl oy a minimum of 10% UAE nationals in total staff 
(excluding auxiliary staff) as per Central Bank regula tions, and there is a proposal to increase this 
percentage in the near future. Additionally, Counc il of Ministers Decree No. 10 of 1998 effective 
January 1999, requires all banks to increase the numb er of UAE-national staff by 4% annually. Due to 
the demographic structure of the UAE, whereby UAE  nationals represent only approximately 9% of 
the total workforce, compliance with these regulations has not b een achieved by many banks. 
However, the Central Bank and other authorities conti nue to encourage adherence, and have resorted 
to implementing penalties.  Certain senior UAE ba nk figures reportedly consider that encouraging 
such labour market rigidities will not increase the UAE's comparative advantage, and run counter to 
its efforts to attract domestic and foreign investment.63 
137. In its specific commitments under the GATS,  the UAE has, with limitations, made 
commitments on all banking and other financial services as specified on the Central Products Classification list, with the excepti on of settlement and clearing services for financial assets; according 
to the authorities, this exception was due to the absence of a stock exchange in 1996 when the UAE 
became a member of the WTO.  The UAE has bound measures on all these services for cross-border 
supply and consumption abroad w ithout limitation.  Measures aff ecting mode 3 supply (commercial 
presence) remain unbound for new licences to operate bank branches, and to expand activities of existing financial entities. 
(c) Financial intermediation services 
138. At the end of 2004, there were seven financia l investment companies (of which three were 
foreign), seven finance companies, twelve financia l consultancies (all locally incorporated), and two 
investment banks.  There is no moratorium on th e licensing of new financial institutions or on 
establishing branches of existing ones.  
139. The UAE's two securities markets were establis hed in Abu Dhabi a nd Dubai in 2000 under 
Emirate laws.  They are regulated by the Securities and Commodities Authority (an independent 
body, chaired by the Minister of Economy and Pl anning) under Federal Law No. 4 of 2000.  Brokers 
wishing to operate on the UAE exchanges must have at least 51% national owne rship.  Capital must 
be at least Dh 10 million and financial guarantees must  be provided.  There is also a securities market, 
the Dubai International Financia l Exchange (DIFX), with its ow n regulator, within the Dubai 
International Financial Centre (DIF C) free zone.  There are no nationality restrictions in the DIFC;  
however, transacting business in dirhams is not perm itted, nor is the acceptance of deposits in any 
currency from a natural or juridical person in the UAE.  
140. Regulations on investment funds are set out in  Central Bank Resolution No. 164/8/94.  The 
fund manager must be a company licensed by the Central Bank;  the latter can permit foreign 
companies to set up branches or representative offi ces.  All companies must nevertheless have a 
principal centre of administration in the UAE.  In vestment funds/products must be marketed by a 
Central Bank licensed financial institution (bank or securities market).   
                                                     
 
62 The legislation differs from emirate to emirate, although the rate of 20% applies in all emirates. 
63 Economist Intelligence Unit (2004). WT/TPR/S/162 Trade Policy Review 
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141. Currently, there is only one commodities ex change in the UAE, the Dubai Gold and 
Commodities Exchange (DGCX), which operates fr om the Dubai Metals and Commodities Centre 
(DMCC).  The DGCX commenced trading in Novemb er 2005.  It is a joint venture between the 
DMCC and two Indian companies.  Since the DGCX  is a financial free z one, foreign broking and 
trading companies can operate freely.  In practice, the licensing procedure is in two stages:  operators 
first apply for membership to the DGCX, which requi res full disclosure as to ownership, directors, 
financial conditions, home regulator a nd suitability to act as brokers or traders in a commodity futures 
market;  companies are given initial approval, and the information is passed to the SCA for final 
approval.   
(vi) Trade in business and professional services  
142. The UAE's labour market is generally open to foreigners;  91% of the UAE work force is 
foreign.  As trade in business services in general, and professional services in particular, relies to a large extent on movement of physical persons, su ppliers are particularly favoured by the liberal 
conditions regarding both the movement of natural persons (Mode 4 in GATS terminology), and long-
term employment of foreigners.
64   
143. Foreign professionals are permitted to practi ce business services and professions such as 
auditing, medical services, engineering, legal prac tice and consultancies, computer consultancies and 
similar services, provided they hold a valid UAE residence permit; obtain a professional licence from 
the government of the emirate in which they intend to operate;  and  have signed a service agency 
contract with a local services agent that is a UAE na tional, and the contract h as been authenticated by 
the notary public. An agent's duti es and obligations towards the foreign professional are limited to 
facilitating the practice of an activity in the emirat e, such as assisting in obtaining and renewing work 
permits issued by the Ministry of Labour and Soci al Affairs, and other government authorities.  The 
local service agent holds no share in the firm  and does not interfere in its management. 
144. In its GATS schedule of specific commitments , the UAE has bound measures affecting cross-
border supply, consumption abroad, and commerc ial presence (modes 1-3) for accounting, auditing 
and book-keeping services; for certain taxation services;  for architectural, engineering, urban planning 
and landscape services;  and for veterinary services.65  
(a) Legal services 145. Legal services, including advocates, lawyers, a nd counsellors, are regulated both at emirate 
and federal level.  Federal Law No. 23 of 1991, concerning the Advocates Ordinance and 
Amendments thereof, regulates the advocacy pr ofession in the UAE.  Advocates are free to move 
within the country once they obtained a licence, except for the emirates of Dubai and Ra's al 
Khaimah: to practice advocacy in the emirates of Dubai and Ra's al Khaimah, a local licence is 
required. Dubai regulations require lawyers to have an office in Dubai in order to appear in a Dubai 
Court.    
146. Law firms must be 100% owned by UAE nationals .   In the five emirates applying Federal 
Law No. 23, foreign lawyers can offer legal advice on foreign, international, and local law, and can 
represent clients in the court of appeal for a maximum of four years, and in the court of first instance for a maximum of eight years.  A foreign lawyer must obtain a permit from the Ministry of Justice, 
                                                     
 
64 The movement of natural persons, as understood under the GATS, is temporary by nature and is 
executed only for a very particular purpose; it does not cover permanent employment of foreigners in domestic 
firms; nor the conditions for foreigners to work permanently in domestic industries.  
65 WTO document GATS/SC/121, 2 April 1996. United Arab Emirates WT/TPR/S/162 
 Page 79 
 
 
which requires a diploma from a foreign professional body recognized by the Ministry of Education.  
The lawyer must be registered in the bar of his home country, have 15 years of experience and meet conditions of good reputation.  There is no prior resi dency requirement.  The request for a licence is 
presented to the Ministry of Justice through the local law firm.  If all procedural conditions are met, 
the Ministry of Justice registers the applicant as a lawyer and allows him to practice, but only as an 
employee of the local law firm.  
147. Recently, the Ministry of Justice has been putting pressure on law firms to meet the 
requirements of the emiratization policy (section (b) below and Chapter I(1 )).  Licences, for both 
foreign and local lawyers are renewed annually.  In principle, they can be revoked only for 
professional reasons. 
148. The UAE does not have a Bar Association.    
(b) Accounting and auditing services 
149. Accounting services are regulated at federal level.   Federal Law No. 22 of  1995 and relevant 
ministerial decisions cover auditors and cer tified accountants, both firms and individuals.  
Accountants benefit from free movement within the country, enabling them to operate in an emirate 
other than the one in which they are registered, wit hout requiring a special licence.  As a rule, for each 
activity, the physical rather than the moral pers on is licensed (e.g. who signs the books). The 
international financial reporting sta ndards (IFRS) are applied in the UAE. 
150. Foreign accounting firms have been able to practice audit and accounting services freely in 
the UAE, but the situation is changing.   Some 264 foreign individual auditors, 208 local (or GCC) 
individual auditors, 47 local firms and 12 foreign firm s operate in the UAE, the latter in the form of 
branches.  Each foreign branch may be 100% fore ign-owned and have several sub-branches operating 
in the various emirates.  As noted, foreign firms mu st have a local services agent.  All of the foreign 
companies were established under legislation in pl ace before 1995;  no foreign accounting firm has 
been established since 1995.  
151. Since the introduction of the emiratization polic y in 1997, foreign ownership in new foreign 
firms establishing in the UAE is limited to 75%.
66  This requirement also applies, in principle, to firms 
established before 1995, which have been given a tr ansition period, currently until 2007, to find local 
partners in that proportion.67    
152. The Register includes local GCC and other fore ign natural persons and firms.   There are 
three categories in the Registry:  practicing audito rs; non-practicing auditors (study, sickness, travel, 
etc);  and trainees.  The latter is for nationals who, having completed the theoretical part of the 
education, are performing the three years of superv ised professional practice required to qualify as an 
auditor in the UAE.  Trainees receive a monthly remuneration amounting to Dh 5,000.   
153. Registration conditions for foreigners include  a university degree in accounting or an 
equivalent degree;  three years of experience in accounting;  and fellowship or membership in an 
auditing professional body recognized by the MEP (e.g . the Institute of Chartered Accountants in 
England and Wales, the American Institute of Certif ied Public Accountants or the Canadian Institute 
                                                      
66 Ministerial Resolution No. 7 of 1997 Regarding the Registration of Foreign Offices and Companies 
in the Register of Auditors. 
67 Council of Ministers Decision No . 366/4 of 2005.  GCC citizens ar e treated as UAE citizens for the 
purpose of this requirement. WT/TPR/S/162 Trade Policy Review 
Page 80 
 
 
of Chartered Accountants);  and evidence of a pa rtnership with a UAE citizen or company or a 
certificate of employment therewith.   
154. Auditing firms must meet the fo llowing conditions:  one of the pa rtners or managers must be 
a UAE national registered as a practicing auditor in the Registry;  the partnership contract should be 
notarized by the official authorities;  and all partne rs should be registered in  as practicing auditors. If 
one of the partners is a firm established outside the UAE, that foreign firm must hold a certified licence for practicing as an auditor in its country of registration.  In all cases the firm must be 
established as a joint-liability company. 
155. The professional body for accountants in UAE is the Accountants and Auditors Association 
(AAA). It was established in 1997 by a Resolution of the Ministry of Labour and Social Affairs 
(No. 227/97).  Auditors are not obliged to register with the AAA.     
(c) Engineering services  
156. Foreign engineering firms and professionals are allowed to practice in the UAE, on the major 
specialized construction projects.  The engineering profession  is regulated at emirate level.   There are 
three forms through which a foreign engineering consu ltant or contractor can operate:  a joint-venture 
with a local firm, a partnership with a local engineering firm, or a foreign branch (with a local service 
agent).  In certain cases (large projects), foreign engineering contractors can be invited to tender 
without having to incorporate locally.  All engineers, local and foreign, must be registered with the 
Engineers Society of the UAE. 
157. According to the authorities, conditions for s upplying engineering services are similar across 
the emirates. However, information was available on ly for the Emirate of Dubai.  According to the 
Dubai Municipality conditions, a licence for the practice of engineering consultancy requires  the 
applicant to be a fully competent UAE national, of good conduct and reputation; to hold a BSc.  in engineering from a recognized university in one of the engineering fields for which the licence is 
requested;  to have at least three years of expe rience in the specialized field after obtaining the 
university degree;  and to be a member of the engi neers' association of the country of study.  The 
Order regulating the profession in Dubai also requires that the applicant is not an owner of, or a 
partner in any of the contracting companies or in building materials trading companies.
68 
158. According to the Order, a foreign engineeri ng branch office is defined as the branch 
established in the emirate by one of the foreign specialized engineering firms.  Licensing of the 
foreign branch is limited to the fields of special ization not commonly provided by local engineering 
firms.  The head office of the foreign firm should have existed for not less than fifteen years, and 
carried out a number of projects of large technical and financial value.    
159. The firm's manager must be registered in th e registry for engineer ing consultancy profession 
and have no less than 15 years of experience in th e practice of the profession. The foreign branch 
must have technical staff for each of the licensed fields of activity to be practiced, be led by an 
engineer with no less than 15 years in the specializat ion,  assisted by a number of assistant engineers 
(consistent with the volume of the current works assigned to the firm) with no less than seven-years 
experience;  the head office must undertake to appoi nt the required staff to reside in the emirate.   
                                                      
 68 Article 4 of Local Order No. 89 of 1994 on Regulating the Practice of the Engineering Consultancy 
Profession in the Emirate of Dubai. United Arab Emirates  WT/TPR/S/162 
 Page 81 
 
 
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