SHEIKHA LUBNA ON FTA NEGOTIATIONS

1. (SBU) Summary: On June 14, Minister of Economy Sheikha
Lubna Al-Qasimi told Ambassador and Econchief that she was
facing increasing local opposition to the FTA. She stressed
the importance of continuing with discussions/negotiations on
the investment chapter of the FTA as "a critical path" to
concluding an agreement successfully. She also said that she
wanted to re-energize the other negotiating groups to move
forward simultaneously with the investment group. She
reiterated the UAEG's commitment to eliminate application of
the Arab League's secondary and tertiary boycott and
expressed frustration that UAE companies and agencies were
still using old language that did not reflect UAEG policy.
She said that she would be visiting Washington from June 19
to 23 to conduct Congressional outreach and also hoped to
meet with USTR Schwab. She planned to meet with
Representative Sue Kelly (R-NY) to respond to her concerns
about UAE efforts to counter terror finance and
proliferation. End Summary.

UAEG Facing Increasing Local Opposition to FTA


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3. (SBU) Sheikha Lubna said that she faced increasing local
sentiment opposed to the FTA, and that it was now broader
than just the Dubai merchant families. She explained that
UAE public opinion was being shaped negatively by the strong
U.S. public opposition to DP World's investment in U.S. port
operations and this week's press mention of Rep. Kelly's
recent letter to the UAEG expressing concerns that the UAE
needed to do more to reduce its vulnerability to exploitation
by terrorist organizations and nuclear proliferators. She
said that her upcoming trip to Washington would focus on
public outreach in order to promote the FTA and the bilateral
economic relationship.

Both Investment and Non-Investment Negotiations Important


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4. (SBU) Sheikha Lubna said that the FTA investment group and
natural resources represented a "critical path" for the
success of the FTA negotiations. She added, however, that
the discussions were not going as quickly as either side had
hoped, stressing that the issue of natural resources in the
UAE came under the authority of individual emirates rather
than the federal government, requiring a great deal of
internal consultation. She urged that the U.S. and the UAE
continue the discussion on natural resources in July, and
added that she had discussed with MinFin A/US Khalid
Al-Bustani the need to re-energize discussion among the other
negotiating groups.

Boycott: Commitment to Resolve


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5. (SBU) Sheikha Lubna raised econchief's June 12 meeting
with MinEcon U/S Al-Saleh about the Arab League Boycott
(reftel). She reiterated the UAE's commitment to resolve the
remaining applications of secondary and tertiary boycott
language and expressed her frustration with both the number
of remaining cases and the fact that the same companies and
government entities kept appearing. She said "we've told
them" that they needed to change language to reflect UAEG
policy. She added that she might instruct Al-Saleh to call
the companies/agencies into a joint meeting to try and push
forward cooperation.

Visiting the U.S. to promote FTA and Respond to Concerns


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6. (SBU) Sheikha Lubna will be in the United States from June
19 to June 23 to meet with members of Congress to promote the
FTA. She also plans to meet with Representative Sue Kelly to
provide an initial response to her stated concerns --
although she stressed that the MFA was responsible for
coordinating a formal written response. She said that the
UAE shared the international community's concerns about Iran,
but stressed that geographic proximity meant that the UAE had
to engage with the country. Absent international (UN)
sanctions, she said, the UAE could not cut trade or financial
ties with its neighbor.
SISON