Saudi Arabia is considered to be UAE's most important neighbor. It is the largest neighbor in terms of economy, geographical size and population. KSA's gross domestic product (GDP) in 2007 was $ 376 billion while UAE's GDP was $193 billion [1]. Both UAE and KSA are oil-producing countries, which implies that the exports and imports commodities are not crude oil. However, UAE imports refined petrochemicals and plastics, which are considered to be the downstream product of crude oil. Other commodities the UAE imports are steel, cement, fertilizers and foodstuff. On the other hand, UAE exports to Saudi Arabia are re-exports goods such as cars and electrical commodities. In fact, UAE is the third most important re-export center in the world after Hong Kong and Singapore [2]. UAE imports Figure.1 UAE imports from KSA in million dirham Vs. years As it's shown in figure.1, UAE imports from Saudi Arabia were growing slowly from the years 1984 to 1989. At this period, the imported goods were mainly foodstuff and medicine and there was no heavy industry commodities imported. From year......

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