Abstract
Foreign relations between the UAE and the EU incorporate one of the most successful unions in the history of the world. The introduction provides a snippet preview of foreign relations before the background gives the history of the economic relations of the EU and the UAE. In closing, this section is a description of the economic relations shared between the UAE and the EU since its establishment to date.
The subsequent section describes the development of relations between the UAE and the EU, mostly focusing on the period between 1988 and 2013. Importantly is the ability to discuss the challenges incurred in the union, the prospects, and the outcomes of the research before concluding. The outcomes discuss the benefits enjoyed by both the EU and the UAE in foreign relations while the prospects discuss the future of the union.
Introduction
The UAE and EU’s extensive engagements in international relations enable each entity to benefit from the other. The essence of foreign relations is to enable countries to concentrate on social, economic, political, and technological issues that affect them at a particular moment.
Foreign relations have different categories, including those that enable free trade, which enables states to minimize or remove regulations that deter smooth trade operations. The relationship shared between the UAE, and the EU is the customs union, which expands the free trade. According to the customs union, even non-member countries experience the privileges offered to member states. This explains why countries within the GCC can easily conduct free trade with the EU States.
Thirdly, there is the common market that enables member and non-member states to trade across different countries without regulations such as visas or work permits (Steers, Sánchez-Runde, & Nardon, 2010). Finally, the economic union, which also describes the position of the EU in Europe in which the member states implemented and adopted similar economic policies enabling them to abandon regulations that initially deterred them from conducting business in Europe. This paper intends to focus on the customs union and economic union shared between the UAE and the EU. This will include an extensive discourse of its background, present, and future.
Background
The economy of the UAE and development of the UAE
In December 1971, selected countries in the Middle East decided to form the United Arab Emirates. This followed an agreement that would see the countries engage in free trade while adhering to the principles of international trade. This meant that the UAE would actively participate in international meetings while avoiding interference with trade operations in non-member states within the continent. In addition, the UAE agreed to follow the policies of the United Nations Charter because disputes were likely to occur when the different countries bridged barriers to create a free trade business environment.
Besides the commitment to the member states, the UAE strives to build excellent foreign relations with other countries in different parts of the world. This explains sits involvement with the EU in the recent past. According to (Fulford 2011), since the establishment of the UAE, member States, and non-member states from the Middle East received over 15 billion USD as foreign assistance.
This incorporates the Muslim and Arab States. Today, the UAE is a member of the Arab League (AL), IMF, WHO, ILO, and the united nations (un) enabling the member states to maintain mutually beneficial relations with European, American, and Asian States including the US, Pakistan, China, and Russia among others.
The economy of Europe and the development of the EU
21 years before the establishment of the UAE, the EU began. This means that by 1950, European countries implemented an economic union that would ensure that they conducted business in a non-restrictive manner. One of the greatest inventions of the EU was to bridge economic barriers and to create a platform for the use of resources effectively.
The post-war period culminated by regional wars between European countries saw many states use their economic resources in a less productive manner, and this encouraged wastage, which the EU wanted to control. This occurred after the Nazi regime in which many Jews lost their lives and it was very difficult for other countries to show Germany goodwill. However, besides payment of reparations to countries affected during WWII, Germany still had to contribute towards the sustenance of the European Union together with other countries including France, Belgium, Italy, Luxembourg, and Netherlands (Gänzle, Grimm, & Makhan, 2012).
Seven years after its establishment, member states had to sign the Treaty of Rome that ensured the implementation of the European Economic Community (EEC) to reduce trade barriers between the six states. It was until 1993 that the EU acquired 14 members enabling it to change its identity from European Community (EC) (European Union free trade system and policy handbook, 2011).
The agreement that enabled the transformation of EC to EU was the Treaty of Maastricht that ensured that the member states had a common currency, which lasted six years. In addition, the treaty supported establishment of financial targets to ensure that the member states contributed equally towards the stability of the EU. According to the treaty, it would be impossible to develop financial and social agreements without focusing on the political platform. It became important for the member states to involve political discussions to help in the development of shared citizenship (Steers et al., 2010).
The UAE and EU
The Cooperation Council for the Arab States of the Gulf (CCASG) or the GCC creates a link between the UAE and the EU. GCC has six members including Kuwait, Bahrain, Saudi Arabia, Oman, the UAE, and Qatar. All these countries produce oil and natural gas explaining the overwhelming interest of the EU in the UAE.
Australia and the UAE have a strategic business partnership enabling the member states to participate in development of financial and investment services that would benefit both nations.
After the establishment of the GCC in 1981, the UAE developed interest in the union in 1988 providing five pillars in explaining the union (Proedrou, 2011). According to the UAE, it sought union with the GCC in order to establish strong political, social, scientific, technological, and economic relations with GCC member States. Besides, the UAE and the EU have trade interest in the GCC and in 2013, the member states recorded trade flows of up to €152 billion.
Development of economic relations between the UAE and the EU through various agreements
Cooperation Agreement
Each year, the EU and the UAE have conventions to discuss their progress within the GCC. Though the discussions are diverse including science, technology, politics, and trade, economics dominate between the different countries display interest in products offered by member states within the union.
Through this, the member states are able to discuss strategies of developing excellent infrastructure for transport and communication while ensuring that they carry out extensive research on what other unions do in order to succeed within the rivaled environment.
The cooperation agreement of 1988 is significant to the EU and the UAE because both of them have the ability to come up with strategies of improving their current positions economically. Through the cooperation agreement, France is able to supply the UAE with military material while the UAE supplies France with petroleum, natural gas and other products. On the other hand, German Business Park in Abu Dhabi is one of the most extensive business associations between different states. This enables an exchange of the Euros with the UAE currency through the German construction companies established within the UAE (Alcaro, 2013).
Foreign Direct Investment and free trade agreement
A significant development in relations between the UAE and the EU is the fact that the countries engage in global interactions enabling cross-cultural exchanges some of which result in marriages. Though not directly, the agreement boosts economic relations between the EU and the UAE because the citizens engaging in such exchanges are able to win the goodwill of their member states.
Through this, there is ease of getting work permits, visas, and identification cards in the UAE and the EU. Such relations create a sufficient space for foreign direct investment within the UAE and in other countries within the EU. The free trade agreement established under the cooperation agreement helped the UAE and EU to engage in different businesses since 1990 until 2002 in which the member states sought to review the policies (Fulford, 2011).
Embassies
Establishment of the Danish and the Albanian embassies within Abu Dhabi and the UAE respectively created strong economic relations between the involved parties. Other European embassies within the EU include Greece and Ireland whose diplomats play a significant role in maintaining mutually beneficial foreign relations between member states. In 2008, Kosovo displayed interest in taking a similar step and the reception from the UAE was excellent (Ouis, 2002). The United Kingdom equally shares excellent foreign relations with the UAE after Britain withdrew troops from the Gulf in the 19th century enabling the EU and the UAE to maintain close business relations.
Challenges
When the British invaded the Gulf in the early 19th century, oil was a dominant factor. Evidently, the same resource might be the future of conflicts between the UAE and the EU. The challenge remains the ability to maintain undisputedly close ties between the UAE and the EU for economic reasons. In the future, the agreements established in the late 20th century might fail to deliver (Watt, 2002).
Evidently, the populations of the member states are fast rising, and it will be important to change the policies especially the ones governing OPEC in order to ensure job security. Oil depletion occurs even though the population keeps rising meaning that the policies established in the 1990s might not apply to date. This explains the changes made in the free trade agreement that sought to create employment to thousands of Arabs, Muslims, and Europeans (Mina, 2008).
Another challenge remains creation of a balance between the member and non-member states. According to the agreement, even non-member states can participate and conflicts could arise in resource distribution. Sometimes the non-member states that are the greatest producers of resources required by partnering nations and conflicts could arise because the member states do not purchase from each other. Such aspects of trade diversion are of enormous concern to the EU and the UAE and they require further reevaluation (Lippman, 2012).
Finally, each state within the EU and the UAE has independence to protect; extensive relations over prolonged periods could result in loss of autonomy. As such, only a single member of each union might enjoy the power that they should distribute to member states. When other nations remain invisible, this interferes with free and fair trade operations that only seek to develop different economies within Europe and the Middle East (El-Shibiny, 2005).
Prospects
Many countries display interest in the union between the UAE and EU including India, Japan, Korea, and China. These incorporate some of the fastest growing economies in East Asia whose involvement will generate a great impact on the union.
With 27 member states of the EU, it will be possible for the UAE to make different choices of the products and services that add the greatest value to the countries. In the end, the involved countries will participate in ethical businesses that seek to protect nature while transforming the business environment to an efficient and aesthetic environment (Palmer, 1999). Both the EU and the UAE will grow politically, socially, economically, and technologically to achieve their objectives under the UN.
Results
The EU and the UAE complement each other and it takes the ability to exchange resources, mutual agreements, and political reinforcements to achieve these results. Initially, it was difficult for Arab and Muslim States to develop mutually beneficial relations with European States. However, the ardent need for resource and information exchange enables such unions to thrive. In the end, both the UAE and the EU have a reason to maintain close and long-term ties because the benefits they enjoy exceed the demerits of such unions.
Conclusion
In summary, foreign relations remain integral to countries especially when they have resources of value to share. The UAE and the EU have long-term relations because they have agreements based on mutual trust and they understand the benefits they require to reap from such unions.
References
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