The Trade Connection
The highlights of the US--Gulf states trade relationship in recent years can be described as follows. First, from the market value standpoint, the United States has always been a more important trade partner for the GCC countries than the GCC countries have been for the United States. The United States plays a substantial role in meeting GCC import needs from advanced industrial economies, and this role has become increasingly important since the 1970s. Secondly, the GCC states as a group have accounted for a very tiny portion (generally under 5 percent) of US total trade, and within the GCC group, there has been very wide variation in the value of US trade with individual GCC countries. Thirdly, although the share of the GCC bloc in US global trade has remained quite small, this Gulf bloc has continued to dominate US trade with the Middle East. Fourthly, the pattern of trade between the two sides paralleled closely with the pattern of investment of the United States in the region. This means that (1) in value terms, petroleum has played a dominant role in the overall trade relationship, and (2) before oil in the Gulf was exploited in commercial quantities, that is, before 1945, there was little trade between the two sides.
With the intensification of American oil companies' efforts on the Arabia peninsula after World War II, some of the GCC countries have become principal suppliers of crude oil to the United States. It is important to note, however, that there has been a wide variation in the degree to which this country depends on crude petroleum from the Gulf region. There were times when nearly one-half of the US total imports of crude oil came from the Arab Gulf states and at other times, only five percent. Fifthly, trade between the United States and the GCC states has undergone significant changes, both in absolute and relative terms.