C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 002016

SIPDIS

SIPDIS

STATE PLEASE PASS TO USTR FOR SDONNELLY AND DBELL

E.O. 12958: DECL: 05/15/2016
TAGS: ETRD ECPS ECIN ECON AE
SUBJECT: UAE FTA: UAEG OFFICIALS RAISE CONCERNS< BUT
REITERATE COMMITMENT

REF: ABU DHABI 01772

Classified By: AMBASSADOR MICHELE J.SISON FOR REASONS 1.4 (b&d).


1. (SBU) Summary. On May 14, during the UAE-Korean
Information and Communications Technology (ICT) Forum held in
Abu Dhabi, Sultan bin Saeed Al Mansouri, Minister of
Governmental Sector Development and the head of the UAE
Telecommunications Supreme Committee, told the English
language daily Gulf News that "the American side is pressing
hard towards the liberalization of the UAE telecom sector
with immediate effect, despite the fact that there is a
timeframe that extends to 2015 according to the World trade
Organization (WTO)... The UAE is suggesting to advance the
date to 2010, as a compromise from our side, given that we
get something in exchange," said Al Mansouri. He also said,
the UAE would not consider any compromise unless it is met
with a fair exchange. "This is our policy and our
negotiating strategy," in all subjects covered by the talks,
not only in the telecom sector. In contrast to the concerns
raised by Al Mansouri, Minister of Economy Sheikha Lubna Al
Qasimi told reporters on May 13 she expects the fifth round
of FTA negotiations to start before the end of summer and the
deal to be signed before the end of the year. Sheikha Lubna
also expressed her commitment to an FTA during a May 13
meeting with Ambassador and a U.S. delegation from the
National Defense University. End summary.


2. (U) On May 14, Sultan bin Saeed Al Mansouri, Minister of
Governmental Sector Development, told reporters from the
English daily Gulf News and the Arabic daily Al Ittihad that
the U.S. is pushing the UAE to open its telecom sector
immediately, despite a WTO deadline of 2015 to liberalize the
sector. He added that in exchange for the U.S. opening its
telecom sector to UAE investors the UAE would consider
opening its telecom market by 2010 as a "compromise." The

Minister said, "These are bilateral trade negotiations and
the UAE will not consider any compromise unless it is met
with a fair exchange." He added, "This is our negotiating
policy not only in the telecom sector, but in all sectors
covered in the (FTA) talks." Gulf News reported that,
Mohammad Al Ghanem, Director General of the UAE Telecom
Regulatory Authority (TRA) and the UAE's lead telecom
negotiator, said he is not willing even to consider opening
up the telecom market before 2015. "The UAE is sticking to
the (WTO) 2015 deadline and there are no other options on the
table, and this should be clear to everyone," said Ghanem.


3. (SBU) Econchief spoke to Khalid Al Bustani, Assistant U/S
at the Ministry of Finance, about the article. Al Bustani
said he didn't know why Al Mansouri had made his remarks. Al
Bustani admitted that the UAEG has issues to deal with in
regard to the FTA negotiations. He remarked that both sides
should work together to move the negotiations forward. He
also said that Econchief should consider the ownership of
Gulf News when contemplating why the remarks were carried in
that paper. (Note: The owner of the Gulf News is Obeid Al
Tayer, Chairman of the Dubai Chamber of Commerce and
Industry; many Dubai merchant families, including the Al
Tayer family, are fretful that an FTA would undercut their
position -- and profits -- by allowing U.S. companies to
operate without a local partner. End note.)


4. (SBU) Minister of Economy Sheikha Lubna Al Qasimi
expressed her commitment to an FTA during a May 13 meeting at
the Ministry of Commerce with Ambassador and a U.S.
delegation from the National Defense University. Lubna said,
"The UAE has always been the number one supporter of the U.S.
in the Gulf,8 and further noted that &the UAE would never
do anything to undermine its bilateral relationship with the
U.S." The UAE continues to be concerned about the investment
and labor sectors. She stated that the UAE's greatest
challenge now is getting Congress to understand the unique
nature of labor in the UAE. She said that Congress must
understand that since 80% of the UAE's population are not
Emirati citizens, trade unions are potentially a "national
security" concern. In defense of UAE labor practices, Lubna
noted the UAE has signed some International Labor
Organization Conventions that even the U.S. has not signed.
On May 13, Minister of Economy Sheikha Lubna Al Qasimi told
reporters she expects the fifth round of FTA negotiations to
start before the end of summer and the deal to be signed
before the end of the year. She declined to comment on
reports that the U.S. is pressing the UAE to open its telecom
market before 2015.


5. (C) Comment: Al Mansouri's comments may represent
internal dissent in the UAEG about provisions of the
agreement. Given the UAEG's concerns about many of the

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details of the FTA negotiations in particular, natural
resources and labor provisions, Al Mansouri's comments may
also represent an early effort to prepare Emiratis for the
fact that the negotiations might not succeed and to
demonstrate that the UAEG is "sticking to its guns" on issues
of importance in the face of U.S. pressure. Indeed Abu Dhabi
Crown Prince Mohammed bin Zayed al Nahyan told Ambassador on
May 9 that he remained very concerned about the FTA's focus
on labor/foreign worker issues given the UAE's "national
security" concerns. End comment.
SISON