The American “Bloomberg” agency revealed new details about the Saudi-Emirati dispute, referring to the crisis of trucks stuck on the border between the two countries, which are queuing for long hours.
The agency stated that some international manufacturers find their goods stuck in a growing economic competition that has increased the cost of conducting economic activities and complicated growth plans, due to conditions imposed by Riyadh.
According to a report by the US Agency, Saudi Arabia, the fifth largest trading partner of the UAE, has imposed new rules that exclude goods made in free zones from preferential tariff arrangements aimed at facilitating the free flow of goods among the six member states of the Gulf Cooperation Council.
The Saudi-Emirati truck crisis and great confusion
The biggest impact of these measures is on some companies operating out of the free zones in the UAE, which includes the business hub of the Middle East Dubai, and is already affecting bilateral trade relations worth $15.26 billion last year.
In this context, the head of a regional carrier and a manager at an international shipping company says confusion over the rules has been delaying trucks getting clearances at the border since the rules came into effect on July 9, and some shipments have already been turned back.
Read also: A secret Emirati report reveals the Saudi-Emirati dispute and details of messages to “Bin Zayed” about “Bin Salman” and Khashoggi
The same spokesman confirmed that the volume of shipments from the UAE to Saudi Arabia decreased significantly as a result.
He also stressed that the Saudi authorities are looking into the products of the free zones for products that have the “Made in the Emirates” stamp, but do not carry an added production value for the Emirates.
He stressed that companies must meet requirements, including that the workforce include 10-25% of citizens in order to avoid fees.
He pointed out that this is something that is very difficult for any company to achieve in the UAE, where expatriates represent 90% of the population.
Saudi pressure on Abu Dhabi
While the two Gulf neighbors have, for the time being, succeeded in ending the oil-policy stalemate that has roiled energy markets in recent weeks, frictions in trade suggest that their broader rivalry has not yet subsided.
In addition to the recent measures, Saudi Arabia has increased pressure on international companies to move their regional headquarters to the Kingdom, in direct defiance of Dubai and the companies it has chosen as its headquarters to serve the broader region, where conducting economic activities can be more complicated.
Read also: A new commercial partnership between Muscat and Riyadh in conjunction with the Saudi-Emirati dispute
Saudi Finance Minister Mohammed al-Jadaan said earlier this month that Saudi trade rules, which were planned long before the latest spat with the UAE over oil production, are meant to support local manufacturing in the Gulf.
Free zones are areas where companies are allowed to operate under a different set of regulations than the rest of the country, and have been a special pillar of economic growth in the UAE.
The change comes at a time when Saudi Arabia intends to establish its own network of free zones in order to diversify its economy and attract foreign investment.
In a sign of how serious the competition has become, the de facto ruler of the Saudi Emirates visited yesterday, Monday, July 19.
The official Saudi Press Agency said that he discussed with his Saudi counterpart ways to enhance bilateral cooperation and confront regional challenges.
Made in UAE
For companies such as Turkey’s Yasar Holding, which owns the Pinar dairy brand and is manufactured in the UAE by a local company, the cost of shipping to Saudi Arabia has increased. A person with direct knowledge of the matter said the new policies were affecting Yasar’s activities and plans in the region.
In 2019, the company chose the UAE as a place to manufacture its “labneh” product, and set its sights on exporting to Saudi Arabia, which is a much larger market.
It made the change because a separate Saudi-UAE dispute with Qatar, which ended earlier this year, made it difficult to sell its product in Saudi Arabia.
The person said the company’s business now collides once again with regional rivalries.
Other Gulf states have not yet taken any public actions in response to the Saudi changes, although many of them have free zones and are expected to be damaged.
In the UAE, a free trade and logistics zone in Jebel Ali Port has helped transform Dubai into a global trading hub.
According to the free zone’s website, more than 8,000 companies, including multinational companies, have established operations in Jebel Ali since the establishment of the free zone in the 1980s.
An executive at a Gulf-based food and beverage company said it took two days to resolve problems at the border when Saudi customs authorities stopped the company’s trucks due to the new rules.
The company was asked to pay an additional 10% for the import, which was refunded once the company demonstrated that it met the new requirements.
counterfeit goods boycott
Earlier, Saudi activists launched a campaign to boycott products imported from the UAE, coinciding with the UAE’s rejection of a plan being negotiated to set global oil production quotas as “unfair”.
Activists launched a campaign bearing the label (Jebel Ali), calling on the authorities of their country to boycott those goods that are being imported from the UAE, on the grounds that these goods are of poor quality, corrupt and adulterated.
Saudi activists rejected Riyadh’s continued dependence on Emirati goods, which are considered among the worst.
Jebel Ali is an area 30 km from the center of Dubai towards the west towards the capital, Abu Dhabi. This area has been designated to build one of the world’s largest ports, Jebel Ali Port.
It has one of the largest aluminum factories in the Middle East, known as DUBAL, and has a free industrial zone and an injection and satellite reception station belonging to the Emirates Etisalat Company.
It has a five-star hotel named after the Jebel Ali Hotel.
This area expanded to connect with the city of Dubai and began to include important residential areas such as Green Ranches and a huge commercial center called Ibn Battuta, and it was decided to build a large airport in it called Al Maktoum International Airport.
Jebel Ali port
With regard to the port, it is among the ten largest ports in the world, and Jebel Ali Port is connected to more than 180 shipping lines, and is linked to 140 ports around the world.
Container terminals in Jebel Ali Port have 23 berths and 78 cranes to meet the needs of the largest container ships in the world, where the facility can receive all ships of any size currently in service or on demand.
Jebel Ali Port is the largest seaport in the Middle East, and the leading facility in DP World’s portfolio of more than 65 ports and marine terminals spread over six continents.
Jebel Ali Port is also a hub for more than 90 weekly shipping services, and has been ranked as the ninth largest container port in the world.
Jebel Ali Port has been voted as the best seaport in the Middle East for twenty consecutive years, and Jebel Ali Port includes the largest man-made basin in the world.
The Jebel Ali Free Zone includes more than 5,000 international companies. The Jebel Ali Industrial Zone is characterized by no restrictions on currency, corporate taxes, personal income tax and minimum capital requirements.
Follow our YouTube channel to see all the new
Click here and hit the subscribe button