UAE WANTS BILATERAL FTA WITH U.S., CONCERNED GCC

UNCLAS ABU DHABI 000136 SIPDIS SENSITIVE STATE FOR NEA/ARP, NEA/RA AND EB/TPP/MTA/IPC STATE PASS USTR - KALVAREZ AND JBUNTIN USDOC FOR 4250/DOC/MAC/ONE/CLOUSTAUNAU E.O. 12958: DECL: NA TAGS: ETRD ECON EFIN USTR TC SUBJECT: UAE WANTS BILATERAL FTA WITH U.S., CONCERNED GCC PROPOSAL MAY DELAY PROGRESS REF: RIYADH 153 ¶1. (SBU) Ministry of Foreign Affairs Assistant Under Secretary for Political Affairs Abdullah Rashid Al-Nuami SIPDIS confided to the Ambassador on January 11 that the UAEG prefers to negotiate a bilateral Free Trade Agreement (FTA) with the United States, instead of working toward a multilateral agreement within the GCC. Al-Nuami stated that the UAE does not want its agreement with the United States held up by complications that might be posed by a process which includes Saudi Arabia. He noted that the UAEG is generally supportive of the GCC initiative to conclude a regional FTA with Washington (reftel),but views the proposal as a Saudi effort to "not be left behind" the other Gulf countries currently negotiating bilateral trade agreements. ¶2. (SBU) In a separate conversation with Econ Chief, Ministry of Finance Assistant Under Secretary for Revenue and Budget Khalid Al-Bustani suggested that negotiating an FTA among the GCC members would be logistically impossible, and suggested that the GCC proposal might be an effort by "certain less-developed Gulf States" to retard the progress of other countries currently negotiating trade agreements with the United States. ¶3. (SBU) Comment: Both of our Emirati interlocutors were clear that the signing of a Trade and Investment Framework Agreement (TIFA) and an eventual bilateral FTA with the United States remain top priorities for the UAEG. Although supportive of the GCC proposal, they hoped that it would not jeopardize or delay in any way Washington's momentum to conclude bilateral trade agreements with Abu Dhabi. UAEG officials no doubt are cognizant of Saudi Arabia's problems acceding to the WTO and probably perceive that FTA negotiations undertaken by the GCC (and likely spearheaded by the Saudis) would be lengthy and arduous. Indeed, the GCC has been unsuccessful in completing a similar agreement with the European Union, despite several years of negotiations. End comment. Wahba