France aims for another year of robust trade with UAE as economic ties deepen

Europe's second-largest economy aims to surpass $8bn in bilateral trade recorded last year, with growth in both oil and non-oil sectors, deputy minister for foreign trade says

Olivier Becht, France's deputy foreign trade minister, at the Alliance Francaise in Dubai. Pawan Singh / The National

France is aiming for a robust year of bilateral trade with the UAE in 2023, surpassing the $8 billion reached last year, as the two nations continue to deepen trade and investment ties.

The second-largest European economy expects both oil and non-oil trade with the UAE to expand this year, with the traditionally strong luxury goods and aviation sectors driving growth in 2023, Olivier Becht, France's deputy minister for foreign trade, attractiveness and French citizens abroad, told The National in an interview on Thursday.

Trade growth has remained robust over the past few years despite a rapidly changing world amid pandemic-driven economic uncertainty and the war in Ukraine.

The first-half trade number will become available later in the year and will reveal the real growth picture, he said.

“We are lucky because if we look at the numbers, we are … at more than the level we reached just before the Covid crisis, [and] we have foreign trade [with the UAE], which is more than €7 billion,” Mr Becht said.

“As minister of trade, I expect more, but the year is not finished yet, so I’m being careful [in estimates]” on trade growth targets amid continued headwinds for the global economy.

The value of bilateral trade between France and the UAE, the Arab world’s second-largest economy, surged by 16.8 per cent in 2022 to Dh29.44 billion ($8 billion), compared to the Dh25.2 billion recorded for the 12 months to the end of December 2021, state news agency Wam reported in May, citing Federal Competitiveness and Statistics Centre data.

Import value climbed to Dh25.2 billion last year, while exports and re-exports reached about Dh4.2 billion.

Trade between the two countries has risen sharply over the course of the pandemic-driven slowdown. The value of bilateral exchange of goods and services surged by 49 per cent over the past three years, rising from Dh19.7 billion in 2020 at the height of Covid-19 lockdowns that brought global trade to a grinding halt.

Jewellery and precious metal products topped the list of the five leading commodities imported from France in 2022, with a value of Dh2.96 billion, followed by jet engines valued at Dh2.58 billion, perfumes at Dh2.1 billion, medicines at Dh1.4 billion and luxury bags at Dh1.3 billion, according to the report.

In terms of re-exports, aircraft parts topped the list with a value of Dh1.1 billion, followed by jewellery and precious metal products worth Dh421 million, jet engines worth more than Dh200 million, cars worth Dh146 million and perfumes worth Dh128 million.

Hydrocarbons products accounted for a large portion of France's imports from the UAE last year and they are expected to continue rising, as Paris diversified its sources of energy supply following Russia's military assault on Ukraine, he said.

Though the non-oil exports from the UAE are also set to grow as the country continues to diversify its economy and broaden its industrial base, for the foreseeable future, Mr Becht expects UAE-French oil trade to flourish to allow production of fuels for its aviation sector and cars.

“We need to import oil, at least for over the next 20 years, to France”, until there are greener solutions for the aviation sector and combustion engine cars are replaced by electric vehicles, he said.

“Diversifying the economy is very huge here, so I’m sure we will import from the UAE, over the next decades, products other than oil.”

Last year, the UAE and France signed a comprehensive strategic energy partnership, which focuses on enhancing energy security, affordability and decarbonisation, Wam reported at the time.

Separately, TotalEnergies and Abu Dhabi’s Adnoc last year signed and agreement to secure hydrocarbons products from the UAE.

Trade and investment ties have deepened and mutual co-operation between the two sides has increased in recent years following French President Emmanuel Macron’s visit to the UAE in May last year and President Sheikh Mohamed’s visit to Paris the following July.

The two leaders oversaw the launch of the UAE-France Business Council, which is jointly led by Dr Al Sultan Al Jaber, President-Designate of Cop28, managing director and group chief executive of Adnoc and chairman of Masdar, and Patrick Pouyanne, chairman and chief executive of France’s TotalEnergies.

The council is made up of 18 chief executives selected for their interest in strengthening economic ties between the two countries.

It held its first plenary meeting in January in Abu Dhabi and set the framework for a comprehensive approach to boost economic ties by fast-tracking programmes with an initial focus on clean energy and climate action, transport and logistics, manufacturing, technology and bilateral investments.

French Finance and Economy Minister Bruno Le Maire in January led a delegation of chief executives of top French companies including TotalEnergies, Toulouse-based plane maker Airbus, lender BNP Paribas, Bpifrance and Societe Generale as well as 15 private equity companies and fund managers to the UAE.

Mr Le Maire said France is keen to further expand economic ties with the UAE and is pushing for more investments from the Emirates as it continues to pursue its €10 billion investment target.

“French and the Emirates’ investments are huge in each country [with] €6 billion the French investment into the UAE and €2 billion from the Emirates,” Mr Becht said.

These investments are set to grow as France is keen to explore more partnership between the UAE and French companies, especially in sectors such as green mobility, electric vehicles manufacturing and EV battery production, railways network and the sustainable aviation, he added.

Mr Becht, who has held meetings with his Emirati counterpart Dr Thani Al Zeyoudi, Minister of State for Foreign Trade, as well as Abdulla bin Touq, Minister of Economy, said there is interest in exploring co-investment options.

The UAE and France have a shared vision of decarbonising their economies, so sectors such as green mobility and sustainable aviation are logical choices to explore.

French companies are keen to help Dubai to expand its Green and Red metro lines, as well as connect the emirate to Abu Dhabi through a rail network.

“Expertise is what we can share and we can co-invest,” he said.

“There is willingness, political willingness to co-invest in the UAE, that’s for sure.”