KUWAITI FM ON BAHRAIN FTA AND THE GCC SUMMIT

C O N F I D E N T I A L KUWAIT 004411

SIPDIS

E.O. 12958: DECL: 12/18/2014
TAGS: PREL ECON KU SA BA
SUBJECT: KUWAITI FM ON BAHRAIN FTA AND THE GCC SUMMIT


Classified By: Ambassador Richard LeBaron for reasons 1.4 (B) and (D)


1. (C) During a December 18 meeting on another topic, Kuwaiti
Foreign Minister Shaykh Dr. Mohammed Sabah Al-Salem Al-Sabah
updated Ambassador LeBaron and British Ambassador Christopher
Wilton on the GCC ministerial gathering earlier this month.
As reported by others, Saudi FM Saud Al-Faisal's objections
to Bahrain's free trade agreement (FTA) with the U.S. brought
an abrupt end to the meeting. According to Dr. Mohammed, the
Saudi FM reportedly contended that an FTA with only one GCC
member would puncture a hole in the customs union, allowing
U.S. products to enter into the rest of the GCC countries
without proper tariffs. According to Dr. Mohammed, the Saudi
FM proposed three alternatives: Bahraini nullification of its
FTA with the U.S., Bahraini delay of FTA implementation until
other GCC members catch up, or GCC abandonment of internal
economic cooperation completely. The British Ambassador added
that the European Union (EU) would like the GCC to develop a
cohesive customs union before progressing with EU-GCC FTA
discussions; therefore, pursuing the third Saudi option would
derail EU-GCC cooperation.


2. (C) According to FM Dr. Mohammed, the GCC Finance
Ministers, meeting December 18 in Bahrain, would try to work
out problems between the Saudis and the rest of the bloc. FM
Dr. Mohammed said Saudi Crown Prince Abdullah has agreed to
attend the GCC Summit, which he viewed as an indicator that
the Saudis were not going to sabotage the summit over the FTA
issue.

********************************************* ***
Visit Embassy Kuwait's Classified Website:
http://www.state.sgov.gov/p/nea/kuwait

You can also access this site through the
State Department's Classified SIPRNET website
********************************************* ***

LEBARON