Trade

Export of crude oil accounts for around 90% of Yemen's total export. Yemen’s non-oil exports are primarily agricultural products, mainly fish and fish products, vegetables, fruits, coffee and honey. Oil exports are foreseen to decrease in the coming decades due to depleting resources in the different oil blocks. There is no certain estimation on proven oil reserves in Yemen. The turbulent security situation furthermore hinders investments aimed at discovering new sites for the exploitation of petroleum. Therefore, Yemen is in urgent need to diversify its production and exports portfolio. Yemen is a net importer of all major categories of products except fuels. Main imports include machinery and transport equipment, but Yemen also imports a significant portion of food, livestock and processed materials. Yemen imports more than 75 percent of its main dietary staple, wheat.

The EU's bilateral trade and economic relations with Yemen have been growing over the years, making the EU one of the main commercial partners of Yemen. The EU is Yemen's third major trade partner, with a total value of €129 ml (8.7% share in its total external trade). The EU is the third largest importer to Yemen, and the seventh major export market for Yemeni products. Major EU export products to Yemen are: machinery and transport equipment (31.9%), food and live animals (26.9%), and chemical and related products (14.6%). Major Yemeni export products to the EU are mostly mineral fuels and crude materials (93.7%) (Data from

The EU is an important partner in Yemen's economic development, providing amongst other things direct assistance to speed up Yemen's accession to the World Trade Organization (WTO) and its integration into the world economy, which is likely to result in more intensive trade and investment relations. Moreover, Yemen also benefits from the EU's "Everything but Arms" (EBA) initiative under the Generalized System of Preferences (GSP). A trade arrangement through which the EU provides developing countries with preferential access to the EU market in the form of reduced tariffs on goods.

Foreign Direct Investments (FDI) are limited by the unstable political and economic situation limited to the telecommunications and energy sectors. The major foreign investment in the energy sector, the Liquefied Natural Gas (LNG), is led by European investors. With €3.3 billion, the Yemen LNG project is the most important investment ever made in Yemen. With an increasingly growing population, Yemen offers several investment opportunities in different sectors including agriculture and irrigation, fisheries, mining, electricity and water, free economic zone, oil and metal, public health, housing, tourism and transportation.

DG Trade 2012).