17 July 2003 | Robin Parker
The US has lost $31 billion in exports to the Middle East in the past five years because of political boycotts and an improved local supply base in the region.
Demand has shrunk for civilian aircraft, agriculture, transportation, telecommunications and industrial equipment as America's reputation in Arab markets hits a new low, according to a US think tank, the Institute for Research: Middle Eastern Policy (IRMEP).
The US share of world merchandise exports to the region fell from 18 per cent in 1997 to 13 per cent in 2001, despite import demand in Arab countries growing by 1 per cent a year over the same period.
One unnamed Arab industrial buyer told the IRMEP that Asian suppliers were becoming more popular because they now compete with the US on price and quality.
"Before, there was always a subtle psychological premium to buying American. Now that premium has been blown away," the IRMEP said.
In March, US drinks giant Coca-Cola closed its Middle East headquarters in Bahrain and relocated to Greece because of growing Arab demand for non-US branded cola.
A spokesperson for the Department of Trade and Industry said it was too early to tell if British exports to Arab countries have been affected by the UK's support for the war in Iraq.