UAE considers EU tariff action

The UAE Minister of Economy has threatened action against the EU unless the bloc eases obstacles to trade.

The Minister of Economy, Sultan Al Mansouri called for steps to amend the EU's tariff measures so that the UAE was not put in a position where it must take action to protect its products. Silvia Razgova / The NationalShow less

The Minister of Economy, Sultan Al Mansouri, says the UAE will consider action against the European Union unless it eases tariffs on the country's goods and reviews a planned carbon trading tax for airlines.

Mr Al Mansouri said such measures were obstacles to closer trade between the two sides.

He was speaking after a meeting with ambassadors from 18 EU member states designed to discuss ways to bolster trade and economic ties.

Shipments of certain UAE plastics exported to the EU have been slapped with tariffs since 2010. In addition, the UAE will be excluded from a new EU list of countries enjoying low rates of tariffs on their exports from the start of 2014.

Meanwhile, the country's airlines are among carriers hit by a EU carbon trading scheme. The EU last month said it would freeze the tax for another year to allow non-EU airlines time to agree a global deal.

Mr Al Mansouri called for steps to amend these measures so that the UAE was not put in a position where it must take action to protect its products.

"It must be stressed here that our national carriers are strongly and deeply aware of the various environmental issues, and they are extensively adopting eco-friendly technologies, surpassing many European air fleets that have been around for a long time," Mr Al Mansouri said in a statement reported by Wam.

The EU is one of the UAE's most important trading and investment partners. Bilateral trade reached Dh74.4 billion (US$20.25bn) during the first half of the year. Volumes for the whole of last year reached Dh146.7bn, data from the Ministry of Economy shows.

But commercial relations between the EU and the UAE and the rest of the GCC have wobbled since the suspension of talks over a free trade agreement in 2008.

"Procedures have been taken in Europe to limit competition in the EU market including where GCC producers have a competitive edge like aluminium and petrochemicals," said Abdel Aluwaisheg, the director general of international economic relations at the GCC Secretariat General.

"The EU has had at various times since 2008 initiated investigations for anti-dumping procedures by GCC exporters and almost in every case they were found to be unjustified."

The UAE has been contesting a decision in 2010 by the EU to slap tariffs on exports of material used in plastic bottles and films. The EU argued that its producers were being hit by subsidies and price undercutting.

In the latest move, the UAE, along with the rest of the GCC, will from 2014 be removed from a list of countries whose exports to the EU are given reduced tariffs. The new system, known as the generalised system of preferences, aims to help poor countries by reducing the tariffs the bloc imposes on their exports. Under the scheme, GCC countries will be deemed as high income so not qualifying for export assistance.

But UAE officials say the classification is unfair as many of its industries are still developing.

The EU's emissions trading scheme for airlines has also proved controversial.

In response to global pressure, the EU said last month it will freeze for a year its rule that all airlines must pay for their carbon emissions for flights into and out of EU airports.

Emirates Airline and Etihad Airways have both slammed the rules.

"A number of EU states, including the UK, Germany and Austria have introduced additional 'environmental' taxes and charges, resulting in the aviation industry and its users having to pay for their emissions more than once in the EU," according to a statement on the Emirates website.