Japan exports body reports 41.8% climb in trade with UAE

While the UAE and Japan have both been fighting the economic slowdown, bilateral trade between the two seems to have flourished, at least in 2008.
Japan External Trade Organisation (Jetro), a government trade promotion body, yesterday reported a 41.8 per cent increase in bilateral trade between Japan and the UAE amounting to US$57.2 billion (Dh209 billion) in 2008, fuelled by high oil prices that reached a historic high level of US$147 last July.
Total exports to Japan increased by 43.71 per cent to US$46.41 billion, primarily driven by crude exports amounting to US$38.5 billion. Even though the volume of oil exported was lower than in 2007, the price was higher, from an average rate of US$69.6 per barrel in 2007 to US$104.3 per barrel in 2008.
Oil prices had been hovering between US$40 and US$50 in recent weeks, before rising to around US$60 per barrel yesterday as oil producers implemented cuts in production to boost prices. "Oil prices are likely to rise again in 2010 due to supply constraints, and oil export values can be expected to change accordingly," Eckart Woertz, an economist at the Gulf Research Centre, told Gulf News.
Apart from crude oil, gaseous hydrocarbons like liquefied natural gas and butane are also major export products, with a growth of 40.3 per cent in 2008 to US$5.6 billion, Jetro statistics show.
Semi finished aluminium ranks third in exports to Japan and has seen a growth of 12.8 per cent. The only items to have a negative growth in export are raw materials and metallic ores and foodstuff, while uncooked pasta has shown a surprising growth from US$25,000 to 4.4 million.
Jetro said in its report, "Japan's exports to the UAE reached a new height," with an increase of 34 per cent in that year alone. Growth in imports from Japan was triggered by infrastructure building and the economic boom in the UAE.
The UAE's imports from Japan mainly comprise of general machinery, electrical machinery, and transport equipment. Construction machinery like self propelled cranes and track laying bulldozers form a major chunk of general machinery which grew by 55.3 per cent, boosted by the growth in real estate and construction sectors.
However, Eckart said, "The real estate and construction sector are experiencing a slowdown and so import of construction machinery will be affected."
Transport equipment, accounting for 48 per cent of UAE's imports from Japan, grew by over 40 per cent. Passenger motorcars experienced a surge in imports by 36.2 per cent to US$3.5 billion.
"The population is increasing in the UAE, but not very quickly so trade in automobiles may not have similar growth in this period," Eckart said. He clarified however, that "the long term market for automobiles in the UAE has a lot of potential."
A notable addition to the usual products traded between the two countries are railway coaches for the metro service in Dubai, UAE imported railway coaches, and related materials worth around US$236.8 million," Jetro's report said.
This holds immense potential for future trade especially since work will continue on the metro service despite the economic slowdown.