U.S. Exports to the Arab World to
Reach $117 Billion by 2013
U.S. Goods and Services, Rebounding Dramatically,
Will Sustain More Than One Million American Jobs
The Bad News: America’s Trade Competitors, Led by
China and India, Are Eating into U.S. Market Share
In 2010, U.S. exports of goods and services to the Middle East and North Africa (MENA) region reached an all-time high of nearly $68 billion. The next three years hold even more promise. New research conducted by the National U.S.-Arab Chamber of Commerce (NUSACC) indicates that total market demand in the Arab world is expected to exceed one trillion dollars by 2013. The U.S. share of that growing import market is expected to reach $117 billion – an unprecedented level of U.S. exports that bodes well for job creation in the United States. This is an increase in the U.S. share of total market demand from 8.9 percent in 2009 to 11.2 percent by 2013.
“For the first time, more than one million direct and indirect American jobs will be created or sustained by U.S. exports to the Arab world,” says David Hamod, President & CEO of the National U. S.-Arab Chamber of Commerce. “The MENA region is positioned to play a key role in America’s efforts to generate employment here at home through exports.”
President Barack Obama’s National Export Initiative (NEI), launched in March 2010, calls for doubling American exports to $3.14 trillion by 2015 in order to create an additional two million jobs. Applying NEI metrics, U.S. goods and services to the Arab world are on track to sustain 340,000 direct and 683,000 indirect American jobs by 2013.
International Monetary Fund (IMF) forecasts indicate that approximately 87 percent of global economic growth will take place outside the United States during the next five years. The IMF’s 2010 World Economic Outlook maintains that GDP growth in the MENA region will increase from 4.1 percent in 2010 to 5.1 percent in 2011, with higher levels to follow. This sustained growth bodes well for the United States, one of the most trusted trading partners of the Arab world.
NUSACC research confirms that there will be significant U.S. export potential throughout the MENA region in established and emerging sectors alike. Four regional demand factors are the core drivers for U.S. exports: infrastructure build-out, upstream energy development and downstream petrochemical projects, consumer spending, and enhanced investments in defense.
Infrastructure build-out continues to be the most significant driver behind foreign direct investment (FDI) and U.S. exports, along with upstream and downstream energy projects. This is especially true for the six Gulf Cooperation Council (GCC) nations in the Arabian Gulf, whose markets are responsible for more than 70 percent of U.S. exports to the Arab world. FDI will be critical for megaprojects in power generation, water and wastewater, roads and railways, ports and airports, housing, hospitals, and schools. U.S. cross-border service providers in transportation, construction and engineering, education, health, training, and security face heavy demand.
Trade and investment missions led by NUSACC to North Africa and the Levant in 2010 highlighted a wide variety of new opportunities in greenfield markets, including such sectors as information and communications technologies (ICT), education, healthcare, banking, research and development, renewable energy, construction, security, and consumer goods.
“More than half the population of the Arab world borders the Mediterranean, representing some of the most dynamic societies in the MENA region,” notes NUSACC President & CEO Hamod. “Like their counterparts in the Arabian Gulf, these nations are laying groundwork for projects worth hundreds of billions of dollars.”
“Ninety-five percent of the world’s customers and the world’s fastest-growing markets are beyond our borders,” emphasized President Obama when he launched the National Export Initiative last year in Washington, DC. “We need to compete for those customers because other nations are competing for them.”
Nowhere in the world, perhaps, is this competition more fierce than in the MENA nations. For the past four years, China has replaced the United States as the top exporter to the region, and a year ago, India’s IT exports to the MENA region soared 154 percent to $2.5 billion dollars. Other nations are eating into America’s market share, and U.S. companies cannot afford to be complacent.
“Our Chamber is doing its part to ensure that U.S. companies win a substantial amount of this new business,” says NUSACC’s David Hamod. “But our companies will need to compete more aggressively – with strong support from the U.S. Government – if American firms want to continue securing major projects in the Arab world and retaining the U.S.-based jobs that go with them.”
U.S.-Arab Trade Outlook: 2013