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National Press Club Briefing:
The Importance of the Arab Market to US Exporters

Press Club BriefingAs a technical advisor to the data analysis and forecasting, I'd be happy to answer any questions about methodology we used to examine US export data and how we came up with this forecast.

There are two things we now know with a high degree of certainty. US exports to a number of petroleum exporting countries are at a very high level through mid year 2005. As David Hamod, president of the National US Arab Chamber of Commerce mentioned, UAE, Mauritania, Oman, and Qatar had almost reached their entire year 2004 import levels by mid 2005.

The year 2004 was truly a turning point for exports growth the region. 2002 US exports grew -2 percent and -4 percent in 2003, followed by a burst of positive 19% in 2004.

If the price for a primary export commodity of the region, petroleum, stays as high as analysts expect, it, along with other factors, will maintain regional purchasing power and demand for US goods and services.

Industrial, capital goods exports of machinery are the first or second most important export category for many of the more developed countries, and the number one export from the US to the region.

The high percentage of capital goods, particularly machinery exports, at 23% of the total, give credence to the five year development plans of many countries to increase their productive capacity while also diversifying their economies. This diversification is being helped along by US manufacturers.

An honest look at exports to the region reveals that higher energy prices are not a zero sum game. US auto manufacturers, struggling to sell product in the US, find a ready market for automobiles in the region. Vehicle exports from the key producing states have grown, on average, 22.8% per year over the last half decade and now account for almost 17 % of total US exports to the region.

Often described as a moribund market, the actual data says otherwise. Is real 16% annual growth in US exports to UAE over the past four years moribund? 15.9% to Algeria, 19% to Kuwait?

I believe that this executive summary, and the more detailed 2006 Arab Market Outlook reveal a number of trends and opportunities that US businesses and entrepreneurs will find useful for breaking through myths and misinformation about the region, with real facts and data.

The full report is available at
Exerpt of the remarks of Grant Smith, Director of Research from a 9/16/2005 briefing

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