AUSTRALIANS GENERALLY SATISFIED WITH FTA

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 002543

SIPDIS

STATE FOR NEA/ARPI, NEA/PI, EB/TPP,BTA, EAP/ANP

E.O. 12958: DECL: 06/08/2015
TAGS: ETRD ECON PREL AS TC FTA
SUBJECT: AUSTRALIANS GENERALLY SATISFIED WITH FTA
NEGOTIATIONS WITH THE UAE

Classified by Ambassador Michele Sison for reasons 1.4 (b and
d)


1. (C) Summary: On June 7, lead Australian negotiator Stephan
Deady told Ambassador that he was "quite pleased" with the
results of the second round of FTA negotiations, although the
talks are still in a very preliminary stage. The Australians
plan to move the agreement forward, but are not going to try
and push for a quick resolution. According to Deady, the
Australians are concerned with how the UAEG proposes to
resolve its federal-state jurisdictional issue. He noted that
the Emiratis were also feeling Saudi pressure for negotiating
another bilateral FTA. Deady explained that the Australians
and the Emiratis had divided the job of writing text, and it
was clear, from the UAEG's text, that the Emiratis had
absorbed lessons from their negotiations with the U.S. End
Summary.


2. (C) On June 7, Australian Ambassador Noel Campbell,
Stephan Deady (First A/S Trade Development Division,
Department of Foreign Affairs and Trade) and Mark Pierce (A/S
Market Development, Business Liaison & Regional Trade Policy
Branch). met with Ambassador and EconChief to discuss the
results of Australia's second round of FTA negotiations with
the UAE. Deady noted that Australia was only negotiating an
FTA with the UAE and did not currently intend to negotiate
FTAs with the rest of the Gulf Cooperation Council. Deady
emphasized that he was "quite pleased" with the progress made
and that the next round would tentatively be in Australia in
November.

Issues and Concerns
--------------


3. (C) Although Deady said he was pleased with the progress
of the round, he was concerned about the federal-emirate
jurisdictional issue. He said that the Abu Dhabi Investment
Authority representatives had explained that the Federal
Government could not commit to some matters (such as control
of natural resources) that were the responsibilities of the
individual emirates. Deady explained that he would not be
able to "sell" an agreement back in Australia with only five
percent of the UAE economy. He was waiting to see how much
the UAE would be willing or able to bind its emirates, but
was optimistic the problem would be resolved.


4. (C) Deady stated that the Emiratis were facing Saudi
pressure about their decision to negotiate an FTA with
Australia. He noted the press reports stating that the GCC
had come to terms with its members negotiating bilateral FTAs
with the U.S., but not other countries. He emphasized,
however, that Minister of Economy Sheikha Lubna Al-Qasimi,
had told him that the UAEG was committed to negotiating with
Australia. He noted, however, that the parties did not hold
a press conference on the conclusion of the round, and his
sense was that this was due to UAEG sensitivity to the Saudi
opposition.


5. (C) Deady also mentioned that the UAE negotiators had
problems with transparency issues such as "prior comment,"
asking "why" the UAEG should subject its laws and regulations
to comment in the drafting stage. Although the Australians
do not have a labor chapter, they did notice that the UAE was
sensitive about its large expatriate population. Australian
proposed text states that the benefits of the agreement would
apply to citizens and permanent residents of each country.
The UAE negotiators sharply responded that "there were no
permanent residents" in the UAE. Deady stated that the sides
had not discussed issues such as the Agencies law or the
Commercial Companies law in detail during this round.

Round Two - Big Picture and Exchange of Text
--------------


6. (C) Deady explained that this was the first real
negotiating round. During the first round, in Australia,
both parties discussed concepts and agreed to share the job
of drafting text. Australia drafted the Services, Financial
Services, Dispute Settlement, Customs cooperation, and
science based standards texts. The UAE drafted the
E-Commerce, telecoms, technical barriers to trade, and IP
chapters. Australia will draft the procurement and rules of
origin chapters. According to Deady, the UAE's texts
appeared to reflect its negotiations with the U.S. He said
that he recognized some of the concepts from the U.S. -
Australia FTA.


7. (C) Deady said that the negotiators were not yet going
through the document "line-by-line" but were still getting to
know each other. This approach suited the Australians, he
emphasized, since they were still consulting with industry
about specific goals and objectives for the FTA. He admitted
that this was one FTA where the Australians had agreed to
negotiate, before finishing all of their internal
consultations. Deady told Ambassador that he thought the
UAEG negotiators were very dedicated to the FTA negotiations,
but that they were still very inexperienced. He had the
sense that they had not quite realized the detailed nature of
the U.S. and Australian FTAs when they agreed to negotiate.

Comment
--------------


8. (C) It is apparent that the UAE is learning from its U.S.
FTA negotiations and that the Australians are facing some of
the same issues that we are. A key issue will be how the
UAEG proposes to resolve its federal-state jurisdictional
issue and bring the individual emirates on board. We believe
that the UAEG leadership remains committed to an FTA with the
U.S. It is clear, however, that the Emiratis did not realize
just how much they were "biting off." The UAE negotiators
are working hard, but are facing a steep learning curve and
are stretched by several commitments, including the U.S. and
Australian FTAs, the GCC FTA and other commitments, such as
the annual ILO meetings in Geneva. End Comment.
SISON