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Today’s Topic . The introduction on Developing the Japan - United Arab Emirates Relation beyond Oil “ The possibility of creating an FTA with Japan”. Prepared by: Khadija Abdulrahman. My Research Question. What is the UAE doing to retain and reinforce the relations with Japan beyond oil?
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Today’s Topic The introduction on Developing the Japan - United Arab Emirates Relation beyond Oil “ The possibility of creating an FTA with Japan” Prepared by: Khadija Abdulrahman
My Research Question • What is the UAE doing to retain and reinforce the relations with Japan beyond oil? • This is essential to countries such as my country UAE, whish depends heavily on Oil in its economy and still willing to keep its economy as stable even when oil is no longer available.
My Assumptions • As you all know that the United Arab Emirates is a rich country with Oil, with strong economic relations with Japan based on Oil. However: What will happen to such strong economic UAE-Japanese relations when: • UAE’S Oil runs out? Does that mean there will no longer be economic relations between UAE and Japan? • When Oil will not be as needed as it nowadays? For Example there is shale technology in addition to the new competitive sources of energy which are eco friendly like solar and wind and water and so on. • Therefore in this research I will explore the possibilities and solutions to retain strong economic relations with Japan even without Oil.
Contents • Introduction to the UAE • UAE Trade Relations with Japan • Introduction to the GCC • Examples of GCC FTAs • Findings from the GCC FTAs • Findings and Conclusions from this study
Similarities between Japan & UAE • Both Countries are World Trade Organization (WTO) members, UAE joined in 1996. • Both Japan and the GCC including the UAE have chosen Singapore as the first FTA partner. • Both countries have forged a strong military and economic alliance with the United States. • Both the UAE and Japan have their Islands occupied by foreign powers, and seeking peaceful solution through negotiations and referral to the International court of Justice. • Iran in the case of UAE. • Russia in the case of Japan’s Northern territories.
Brief Introduction to UAE • The UAE is a federation of 7 Emirates which was formed in December 2nd 1971, after their independence from Britain. • The UAE is 43 years old and its seven Emirates are: • Abu Dhabi (the Capital) • Dubai • Sharjah • Ajman • Umm Al Quwain • Fujairah • Ras Al Khaimah.
The Arab League (22) GAFTA (17) GCC (6) UAE (7) Figure 1: position of uae/gcc
Brief Introduction to UAE • Before the discovery of oil in early 1960s the UAE did not exist. • The UAE, along with Qatar and Bahrain has been known as the trucial states because of the 19 century truce between the local Sheikhs and the UK since 1820. • Those areas were poor and under developed. • Since that truce and until 1920s the areas main industry was pearl diving.
Brief Introduction to UAE • Right after UK withdrawal from the area, the ruler of Abu Dhabi, who is the founder of the UAE formed a union with the ruler of Dubai which was latter extended to the 5 other emirates forming what is called now the United Arab Emirates in 1971. • Since the discovery of oil the UAE has become a modern state with high standard of living and oil drove the UAE's economy.
After Oil – Video UAE After Oil
UAE - Japan Trade Relations • The first export of Abu Dhabi’s oil cargo was to Japan in 1962. • The first UAE’s oil cargo export to Japan was in 1973. • For Japan: UAE is the 9th trading partner • For UAE: Japan the 7th trading partner • For Oil supply: UAE is Japan’s 2nd largest Oil suppler after Saudi Arabia with 25% of its total oil imports.
Japanese Oil Concession with ADNOC • The Abu Dhabi National Oil Company (ADNOC) is the UAE’s National Oil Company owned by the government and the President of the UAE is the Chairman of the Supreme Petroleum Council. • Japanese Companies such as: (JODCO, INPEX, Cosmo oil, JX Nippon oil and energy, TEPCO, Kansai Electric, Chubu Electric), have shares and oil concessions with ADNOC’s 16 subsidiaries in the UAE.
UAE Gas to JapaN • For liquefied natural gas (LNG) supply: UAE is a major exporter to Japan. • During the earthquake and the tsunami that struck Japan in 2011, Abu Dhabi Liquefaction Company (ADGAS ), provided 0.8 million metric tons of liquefied natural gas (LNG) to Tokyo Electric Power Company with grand total of LNG 5.7 million metric tons and value of 4.983.8 million U.S. dollars. • ADGAS made a commitment to supply LNG to Tokyo Electric Power Company until the end of March 2019. • However this has changed since June 2013, by the statement of H.E. Mohammed Al Hamli- former UAE Minister of Energy that UAE is at risk of becoming an LNG importer, because of its own steady growth in population and electricity demand. • This was one of the reasons where I took interest into conducting this research and start looking for other options which will still retain the economic relations between UAE and Japan.
EXPLORING THE possibility of creating an FTA with Japan • In order to explore the possibilities of creating an FTA with Japan, I will first need to research about the UAE’s current FTA’s. Finding # 1 From my research and the data collected I discovered that: • The UAE can not sign an individual FTA. • The UAE is a member of the Gulf Corporation Council (GCC) which their rules indicate that an FTA can only be sighed between all the 6 GCC members and another country therefore (6+1)
Introduction to GCC • GCC stands for; Gulf Cooperation Council • The GCC countries are: • Kingdom of Saudi Arabia (KSA) • The United Arab Emirates (UAE) • Qatar • Kuwait • The Sultanate of Oman • Kingdom of Bahrain The background of those days • From September 1980 to August 1988 the first Persian Gulf War took place between Iran and Iraq. • This motivated the GCC countries which recently got their independence from the UK consider a union that would protect them from other powers such as Iraq and Iran. • Therefore right after this war started GCC was established in Abu Dhabi on May 25, 1981.
GCC International Trade • GCC is a Custom Union since 01 Jan 2003. • All GCC countries are members of World Trade Organization (WTO). • GCC has many on going FTA negotiations. • GCC Signed FTA’s with Singapore, European Free Trade Association (EFTA) and New Zealand. • GCC is also a part of the Greater Arab Free Trade Area (GAFTA)
List of the GCC Free Trade Agreements and ongoing negotiations
What are the GCC countries strategies in establishing FTA? Their Strategy is based on: • Collective negotiation between the GCC and other countries aiming to find the best conditions and equal circumstances in the international economic dealings through a consensus between all 6 GCC members. • Joint negotiation strategy in terms of goods, services, IPRs, environment, labour standards and investments with the business partners. • Halal standards in trading products.
Examples of GCC FTAs • GCC FTA with Singapore (GSFTA) • Greater Arab FTA (GAFTA)
Why GCC has chosen Singapore to be their first to create an FTA with? 1. Singapore has a highly developed and successful free-market economy. 2. It enjoys: • Open and corruption-free environment • Stable prices • A GDP per capita which is higher than that of most developed countries 3. Its economy depends heavily on exports. 4. In 2012, trade between Singapore and GCC countries reached S$68 Billion Singapore Dollars, and trade between Singapore and UAE in the same years reached S$25 Billion dollars. 5. Singapore has the Islamic Council for Halal Standards.
Export Singapore GCC GCC FTA with Singapore (GSFTA) • The GSFTA was signed in Doha (Qatar) on 15 December 2008. Objectives of forming GSFTA in terms of the GCC: • To enhance trade and economic relations and boost the investment ties. • To increase export opportunities for Gulf products, goods and services, which will not include Singapore only, but extends to the East Asian region due to the centre of Singapore which is a trade station and re-export center in the region.
Singapore Islamic Council Halal Standards • This GSFTA encourages a greater recognition of Singapore's Halal standards in the GCC trade group. • The GCC have committed to recognise the Singapore Islamic Council Halal Standards as the same standards in their countries. • Benefits from this recognition of the Singapore halal standards: • It will facilitate trade in halal products’ exports to the GCC Countries. • It will increase tourism opportunities and travel as GCC travellers will meet their dietary requirements when travelling to Singapore.
The trouble of Domestic Adjustment in GCC • GCC-Singapore FTA has stopped as Saudi Arabia has not yet ratified the convention. • According to the official report of the Saudi Arabia embassy in Singapore, the reasons for not ratifying this FTA was due to the fact that Singapore doesn’t treat all the GCC countries equally in terms of visa granting. For KSA residents they are required to obtain a visa to entre Singapore while others GCC member such as the UAE do not require a visa to Singapore.
Case # 2: Greater Arab Free Trade Area Introduction to the Arab League The Greater Arab Free Trade Area
The Arab League (22) GAFTA (18) GCC (6) UAE (7) Figure 1: elaboration
Introduction to the Arab League Before I start exploring the Greater Arab Free Trade Area, I will need to first introduce the Arab League as all the members of this FTA are Arab league members. • The Arab League is a regional organization based on a shared culture and one language “Arabic”. • This league was founded on March 22, 1945. • The main aim of this league is to help the Arab Countries coordinates their policies and gain a united political voice in the world. • The Arab league consist of 22 Arabic countries which are all the Arab countries of the Middle East and North Africa (MENA).
The Arab League general information • The population of the Arab League is about 320 million. • GDP growth at 5 percent, and of 8 US Dollars per Capita. • The leagues members’ countries cover up to 14 million square kilometers.
The Arab League formation from a historical background • If we go back to history we can understand clearly the meaning and idea behind creating such an organization. • The Arabs always believed that they should have their own independent nation state since the Ottoman Empire and the occupation of the Great Britain and France. • The establishment of this league was before the end of world war 2 and before the establishment of the United Nation. • This was coming from the believe of the Arabs that they should stand together against the European domination. • At first the league started with seven members which are Egypt, Syria, Lebanon, Iraq, Jordan, Saudi Arabia and Yemen. • The other members at that time were not yet gained their independence. (The United Arab Emirates for example joined in 1971 right after its independence from Britain and the united of the seven Emirates). • Egypt is the main founder of the Arab league and its head quarter is in Cairo. • At Jamal’s presidency the Arab League was very strong and was feared by many foreign powers.
Jamal Abd Al Nasser influences to the Arab League Gamal Abdul Nasser was an Egyptian revolutionist that successfully drove the British out of his country after 72 years of occupation. Jamal became famous all around the Arab Peninsula after standing firm against the western nations and his efforts of combining the Arab power to battle against Israel. Under his presidency Egypt came out of intense poverty to prosperity. In his presidency he nationalized banks and industries.
Jamal’s economic influence to the Arab World – Suez Canal In 1956 Jamal announced to World that he was nationalizing the Suez Canal Company and creating an Egyptian Canal Authority to manage the Canal. This Canal originally was planned by the French however the British took over and finished its construction. The shares of this Canal was divided between France, England and Egypt however the English bought the Egyptian share as their country was in debts, and latter on the British took full ownership. It is important to mention that half of Egypt's yearly national income is from this Canal. By this time Jamal had become a hero in the Arab world.
This Canal is very important for Trade due to the fact that it is the only canal that connects the red sea with the Mediterraneansea.
More influences to the Arab World • In addition Jamal constructed the Dam which covers most of Egypt’s electricity needs and take water to un irrigated lands. • Due to Jamal economic policies especially construction of the Dam and the Canal; Egypt emerged from poverty stricken country to a prospering nation. • Moreover, in1958 Syria and Egypt united under his presidency, forming the United Arab Republic, hoping that one day all the Arab nations would join. • Sadly, the league lost its powers after Jamal’s death and the Egypt-Syria union broke.
The Arab League and APEC • The Arab League is similar to APEC. • What is APEC? • APEC is the Asia-Pacific Economic Cooperation. • APEC has 21 member countries. • APEC was established in 1989. • APEC seeks to promote free trade and economic cooperation throughout the Asia Pacific Region. • APEC aims to raise living standards and educational level through sustainable economic growth. • Therefore the differences between both is that APEC goals are purely economical and the Arab League’s are purely political with a goal of future economic corporation. • In addition, both organizations meetings mostly fail in achieving their goals.
