External trade plays a vital role in Qatar's economy. The revenue obtained from exporting national products is essential for meeting public expenditure and enhancing national development. On the other hand, importing is the only means for meeting the local demand for intermediary and capital goods.
The State of Qatar supports a free-market policy. In 1994, it became the 121st member of the General Agreement for Trade and Tariffs (GATT) known currently as World Trade Organization (WTO). It is an active member in the Gulf Co-operation Council (GCC), the Organization of Petroleum Exporting Countries (OPEC), the International Money Fund (IMF) and the Organization of Arab Petroleum Exporting Countries (OAPEC) in addition to the Arab League (AL) and the United Nations (UN).
Qatar enjoys excellent commercial relations with the developed countries and its internal policies are flexible and prudent and have been fruitful in developing external trade.
The main market for Qatari products is Asia, in particular, Japan, which buys most of the exported oil products, and India and China to a lesser degree.
At present, crude petroleum and natural gas make up the major commodity exported. Qatar Petrochemical Corporation (QAPCO) exports petrochemical products to GCC countries, India, Pakistan and Australia. Qatar Associated Fertilizers Corporation (QAFCO) exports its commodities to India and China mostly, whereas Qatar Steel and Iron Corporation sells its products to GCC countries.
Exports to Arab countries this year mounted to 631.8 million dollars as opposed to 594 million dollars in 1999, with an increase of 6.4%. The exports to the United Arab Emirates came in the first place with a percentage of 74.5%, followed by Saudi Arabia with 14.1%, Yemen 2.6%, Egypt 1.8%, Bahrain 1.3% and Kuwait 1.1%.
The top first exported products are petrol and metal fuel with a percentage of 93.3%, chemical substances with a percentage of 4.1% and manufactured commodities with a percentage of 1.2%.
Imported goods mounted to 3.3 billion dollars this year as opposed to 2.5 billion dollars in1999 with an increase of 32%. These goods came mainly from the USA, Britain, France and Italy. GCC countries are also important commercial partners of Qatar in external trade.
The imported goods are mostly related to liquefied gas industry. Other commodities include vehicles, electronic devices, foods, luxury items and other required goods to meet the natural population growth.
The State of Qatar has adopted a policy of exemption from customs duty on items related to the construction of infrastructure, foods and personal properties. It imposes a duty of 4% on other items, whereas the duty on items competing with locally produced goods reaches as high as 30% for urea and 20% for iron and steel as a way of protecting national industry. The custom duty on tobacco is 50% and on musical instruments 15%. Imported goods from the GCC countries are exempted from customs duty.
Initial estimates indicate a continuing surplus in the balance of current account for the second consecutive year, increasing by 45.4% over 1999. The main reason for the increase in the balance of current account surplus is the marked improvement in the balance of trade, which, in its turn, was attributed to the hike in crude oil prices in addition to increased international demand for Qatari natural gas exports.
The total of external debts has been estimated by 12.8 billion dollars as opposed to 11 billion dollars in 1999 with an increase of 16.4%. This increase is due to the governmental stocks loans of about one billion dollars and other loans of about 0.8 billion dollars. These loans, which are guaranteed by the projects they fund, are invested in new developmental projects in oil, gas, fertilizers and petrochemicals.
