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Wednesday, August 1, 2007

Gulf state paying billions for surge in U.S. military imports

ABU DHABI — The United Arab Emirates has been preparing for a major spike in defense exports from the United States.

Over the last three years, the UAE has imported nearly $15 billion in U.S. products. They included 80 F-16 Block 60 multi-role fighters from Lockheed Martin in a deal reported at $6.8 billion.

"We're charting new territory in America's trade relations with the Arab world," David Hamod, president of the National U.S.-Arab Chamber of Commerce, said. "The 2006 numbers are unprecedented, and the outlook for 2007 looks even brighter."

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Analysts said U.S. defense exports would comprise a major portion of the increase in trade with Washington over the next three years, Middle East Newsline reported. They said defense and security systems have made the UAE the largest trading partner of the United States in the Arab world since 2004.

The UAE has also sought advanced air munitions, upgrades, radars and surface vessels from the United States. Analysts said this could mark a procurement of nearly $5 billion over the next three years.

"Cyclical demand for big ticket items is on the upswing, including civilian aircraft, military systems and border security systems," the chamber said in a report.

In 2007, the report said, the United States would sell $1.24 billion in military aircraft to the UAE. Abu Dhabi has received virtually all 80 F-16s, and UAE pilots were undergoing training in the United States.

The UAE has represented a 32 percent share of U.S. exports to the Arab world, analysts said. U.S. exports to the Middle East, not including Israel and Turkey, have reached $45 billion.

The chamber report said the United States has sought to increase the sale of civilian aircraft to the UAE. The report said civilian aircraft sales, totaling $2.88 billion, would comprise the largest element of U.S. exports to the UAE in 2007.

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