C O N F I D E N T I A L ABU DHABI 001030

SIPDIS

STATE FOR NEA/ARP, NEA/RA AND EB/TPP/MTA/IPC
STATE PASS USTR - KALVAREZ AND JBUNTIN
USDOC FOR USPTO
USDOC FOR 4250/DOC/MAC/ONE/CLOUSTAUNAU
GENEVA PASS USTR

E.O. 12958: DECL: 03/02/08
TAGS: PREL KIPR ETRD TC
SUBJECT: UAEG TAKES TOUGH STANCE ON WTO SERVICES
NEGOTIATIONS



1. (U) Classified by DCM Richard Albright for
reasons 1.5 (b) and (d).

2.(C) In advance of the March 3-6 WTO services
negotiations in Geneva, UAE Ministry of Economy Director
of WTO Affairs Saeed Al-Nasibi publicly announced
on March 2 that the UAE does not intend to open its
banking, insurance, telecommunications and other services
sectors to foreign investors at this time -- despite
expected pressure from "industrialized nations," left
unnamed, later this week. Comment: While such a position
may be unhelpful, the UAE is under no obligation to open
up those sectors it specifically set aside under the terms
of its accession to the WTO in 1996; they are in fact
"unbound," and the UAE's exemptions are indefinite in
duration. End comment.


3. (C) According to Al-Nasibi, the UAE has little incentive
to license new foreign banks because it is the "most
over-banked country in the world, based on the number
of banks per capita" -- foreign banks outnumber national
banks, 26 to 21. He elaborated, however, that foreign banks
are permitted to open representative offices here. (Note:
This is a well-worn argument of the UAE Central Bank, which
since 1987 has largely enforced a ban on new foreign full-
service banking operations. End note.) Al-Nasibi also
stated that the UAEG would continue to give preference to
UAE nationals -- in effect denying national treatment to
foreign investors -- in the services sector to encourage
citizens to invest in their country.


4. (U) According to press reports, Al-Nasibi will chair
the UAE delegation to Geneva for the March 3-6 WTO services
negotiations. Representatives from the UAE Labor Ministry,
Central Bank, Etisalat (the UAE's monopoly telecom provider),
and the Federations of Chambers of Commerce will also attend.

Wahba