trade, and customs privileges and to maintain
restrictive grain export quotas.

United Arab Emirates
The UAE has an open economy with a high per
capita income and a sizable annual trade surplus. Its wealth is
based on oil and gas output (about 30% of GDP), and the fortunes of
the economy fluctuate with the prices of those commodities. Since
the discovery of oil in the UAE more than 30 years ago, the UAE has
undergone a profound transformation from an impoverished region of
small desert principalities to a modern state with a high standard
of living. The government has increased spending on job creation and
infrastructure expansion and is opening up its utilities to greater
private sector involvement. In April 2004, the UAE signed a Trade
and Investment Framework Agreement (TIFA) with Washington and in
November 2004 agreed to undertake negotiations toward a Free Trade
Agreement (FTA) with the US. Higher oil revenue, strong liquidity,
and cheap credit in 2005-06 led to a surge in asset prices (shares
and real estate) and consumer inflation. Rising prices are
increasing the operating costs for businesses in the UAE and
degrading the UAE's allure to foreign investors. Dependence on a
large expatriate workforce and oil are significant long-term
challenges to the UAE's economy.

United Kingdom
The UK, a leading trading power and financial center,
is one of the quintet of trillion dollar economies of Western
Europe. Over the past two decades, the government has greatly
reduced public ownership and contained the growth of social welfare
programs. Agriculture is intensive, highly mechanized, and efficient
by European standards, producing about 60% of food needs with less
than 2% of the labor force. The UK has large coal, natural gas, and
oil reserves; primary energy production accounts for 10% of GDP, one
of the highest shares of any industrial nation. Services,
particularly banking, insurance, and business services, account by
far for the largest proportion of GDP while industry continues to
decline in importance. GDP growth slipped in 2001-03 as the global
downturn, the high value of the pound, and the bursting of the "new
economy" bubble hurt manufacturing and exports. Output recovered in
2004, to 3.2% growth, then slowed to 1.7% in 2005 and 2.6% in 2006.
The economy is one of the strongest in Europe; inflation, interest
rates, and unemployment rema