UAE SAYS GCC-EU FTA DISCUSSIONS MAKING NO HEADWAY

C O N F I D E N T I A L ABU DHABI 001570

SIPDIS

STATE FOR NEA/ARP, NEA/RA, EB AND EUR
USEU FOR LITZENBERGER
USDOC FOR 4530/ITA/MAC/ONE/DGUGLIELMI,
4520/ITA/MAC/ONE/CLOUSTAUNAU,
4500/ITA/MAC/DAS/WILLIAMSON, 3131/CS/OIO/ANESA,
COMMERCE PASS USTR FOR BUNTIN

E.O. 12958: DECL: 04/01/08
TAGS: ECON PREL ETRD KIPR BEXP EU TC
SUBJECT: UAE SAYS GCC-EU FTA DISCUSSIONS MAKING NO HEADWAY



1. (U) CLASSIFIED BY DCM RICHARD A. ALBRIGHT -
REASONS: 1.5 (D).


2. (C) The MFA's Deputy Director for GCC Affairs, Khalid
Al-Ghaith, gave Econchief a readout April 1 of ongoing
discussions between the European Union and the GCC towards
concluding a Free Trade Agreement (FTA). According to
Al-Ghaith, it is clear that the EU is not serious about
reaching such an agreement. At each successive meeting to
discuss the issue, the Europeans introduce new
demands/requirements.
The recent gathering in Doha in early March had driven home
this fact: the EU had broadly hinted that an FTA would need
to wait upon Saudi accession to the WTO. This "suggestion"
had then been followed by a formal demand that the GCC
states become signatories to a large number of international
conventions (seven or eight) dealing with Intellectual
Property Rights. The Emirati noted that the UAE had already
signed on to a few of these, but most of the GCC had not; the
measure appeared intended only to further delay an FTA.


3. (C) Without wanting to overtly criticize the Saudis,
Al-Ghaith made it plain that multilateral negotiations were
being hindered by "our largest link, which is also the
weakest." He contrasted the difficulty in making progress on
economic issues when dealing as a collective (be it via the
EU-GCC discussions or the US-GCC meetings) as opposed to the
quite positive results which can be achieved bilaterally.
Here he noted the good effect that the U.S.-UAE Strategic
Dialogue had had in raising the profile of bilateral economic
issues. Al-Ghaith observed that the UAE remains off the
Special 301 Watchlist and that the UAE's FAA- equivalent body
(the GCAA -- headed by his brother, Muhammad Al-Ghaith) had
just been given top marks by U.S. authorities, clearing the
way for Emirates Airlines to fly to the USA. Now if only the
issue of the frozen U.S. assets of the Arab Bank for
International Finance and Trade (ARBIFT) could be resolved,
and OPIC insurance coverage restored,we could say the
bilateral economic agenda was in very good shape indeed.
Econchief agreed, adding that partnership with the UAE in
combating terrorist financing and money-laundering was
another key area of continuing success.


4. (C) Comment: Al-Ghaith is one of the most capable of
the UAE's diplomats when it comes to economic issues. He
regularly attends the US-GCC Economic Dialogue and previously
served as the Emirati rep at the WTO. Nonetheless, his sense
that the EU's demands for securing an FTA are somehow
unreasonable (they strike us as quite modest in comparison to
what we would likely require in a similar negotiation)
reflects an inexperience if not naivete which highlights the
significant human resources shortfalls of the UAE when it
comes to these sorts of deliberations. It is precisely this
general lack of understanding of how things work that impedes
the UAE from playing a more effective role in the WTO -- one
of the reasons that post very much hopes that MEPI funds will
be made available for WTO training initiatives in the region.

Wahba