UAE imports drop 33% in July, official data shows

New UAE - The value of Saudi Arabia's imports from the United Arab Emirates UAE fell 33% month on month in July, official data revealed on Wednesday after the kingdom imposed new rules for imports from other Gulf countries in July.

Imports from the neighboring UAE fell to 3.1 billion riyals in July from 4.6 billion riyals in June, according to data from the General Authority for Statistics. On an annual basis, the UAE imports declined by about 6%.

In July, Saudi Arabia amended its rules on imports from other GCC countries to exclude goods originating in free zones or using Arab input from preferential tariff concessions, a move seen as a challenge to UAE's status as the region's trade and business hub.

Despite being close allies, Saudi Arabia and the UAE are competing to attract investors and business.

On Wednesday, electronic signers celebrated UAE-Saudi friendship ahead of the Gulf Day on Thursday, but the two national interests have increasingly diverged, including in their relations with Israel and Turkey.

Saudi Arabia's new trade rules excluded from the GCC tariff agreement by companies with a workforce made of less than 25% of local people - a problem for a country like the UAE where the population is mostly made up of foreigners.

It also said all goods made in free zones within the region would not be considered local made - a blow to the UAE where free zones are a major driver of the economy.

The monthly drop in UAE import value was by far the sharpest decline of this year, according to statistics authority data.

The UAE slipped into the second-largest importation country in July after China and the United States, while it was third in June.

The July data might have been particularly volatile with regards to creating the required paperwork The upcoming months could provide a clearer indication of new UAE regulations on Saudi exports, said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

The value of Saudi Arabia's overall exports increased 79.6% compared to July 2020 when global trade was hit by the COVID 19 pandemic.

The increase was mainly because of higher oil exports which rose 112.1% year-on-year, the authority said.