Driven by Brexit and a new credit agreement, Britain and the UAE are set to triple annual trade levels to AED100 billion ($27 billion) by 2023. That’s according to Massimo Falcioni, CEO of Etihad Credit Insurance (ECI) – the state-owned body which supports UAE exports through credit, financing and investment insurance products. ECI and the UK Export Finance (UKEF) signed an updated agreement in December last year to enhance the competitiveness, scale and scope of both countries’ exports through strategic partnership and cooperation. “The purpose of the MoU was to initiate a dialogue between the countries to partner together on joint projects and build even stronger bilateral relations,” Falcioni told Arabian Business. The UAE is the UK’s fourth largest export market outside the EU and is the UK’s key trading partner in the region, making up 40 percent of GCC-UK trade.
Data from the UAE Ministry of Economy shows that the non-oil foreign trade between the UAE and UK in 2019 was valued at AED36.6 billion, of which, 27 percent were non-oil exports and re-exports standing at AED2.1 billion and AED7.7 billion, respectively. “With this new partnership, trade levels will be easily be tripled within three years’ time,” said Falcioni. “As Britain has left the European Union, it still needs to develop its export market and the UAE is a key player because of its historically strong links to the UK.”
Flourishing trade
Trade sectors that are set to flourish between the two countries include services, IT, FinTech, automotive, insurance and asset management, he said. “Now is the time for the UK to be a key player in global exports... growth in exports to the UAE will be enormous and exponential – the UAE is a fantastic hub,” Falcioni added. “If a British company wants to reach Asia, Africa and the rest of Middle East – the UAE is the best place for access,” he said. “The UAE’s geographical position and our access to financial resources makes it easy for British SMEs to do business here; I am committed to supporting all of them to expand into these three markets.” The new ECI-UKEF provides a general framework for underwriting projects between ECI and British companies. Falcioni said the combined government support would allow SMEs in particular to flourish and engender job creation in the UK and the UAE. “Combining our resources will allow British firms to expand into the region – we can offer financial insurance support for UK exporters, as well as critical access to SME trade finance,” he said. “By insuring the payments of the seller and the buyer respectively we create confidence and accelerate growth between the countries.”
Falcioni said he hoped the deal would encourage project investment, particularly in the area of green energy development. “ECI will be instrumental to giving opportunities to UK suppliers to work with green farms, solar farms and waste management companies. I see close cooperation ahead.” Wes Schwalje, COO of Tahseen Consulting previously told Arabian Business: “For UK exporters, particularly SMEs and first-time exporters, the finance, guarantees, and insurance offerings from the agreement will push them to learn more about export opportunities in the UAE while derisking potential business deals.” Export credit agencies are playing an increasingly important role in national trade promotion, development, and diversification strategies, he said. “The agreement is very likely to expand the bilateral trade relationship and encourage risk-averse SME exporters and new-to-export businesses in both countries think globally,” said Schwalje.