FM SHEIKH ABDULLAH ON FTA, DUBAI PORTS, ASSISTANCE

C O N F I D E N T I A L SECTION 01 OF 03 ABU DHABI 000578 SIPDIS STATE FOR NEA, NEA/ARPI, EB/TTT/BTA, IO/UNP, WHA/PPC STATE PASS USTR FOR SHAUN DONNELLY, DOUG BELL COMMERCE FOR BIS MARY O'BRIEN MANAMA FOR OFAC ATTACHE TREASURY FOR U/S LEVEY ADN OFAC DIRECTOR WERNER E.O. 12958: DECL: 02/15/2016 TAGS: ETRD EINV EAID AE SUBJECT: FM SHEIKH ABDULLAH ON FTA, DUBAI PORTS, ASSISTANCE REF: A. ABU DHABI 423 ¶B. STATE 24468 ¶C. STATE 22896 ¶D. STATE 21256 ¶E. NODIS ABU DHABI 377 ¶F. NODIS STATE 18652 ¶G. STATE 20173 ¶H. ABU DHABI 73 Classified By: Ambassador Michele J. Sison for reasons 1.4 (b and d). ¶1. (U) This is an action request. Please see para 10. ¶2. (C) Summary: Ambassador met with new UAE Foreign Minister Sheikh Abdullah bin Zayed Al-Nahyan (AbZ) on February 15. ABZ raised strong concerns about negative U.S. press related to the Dubai Ports World's purchase of container operations in several U.S. ports and asked that the Department issue a "positive statement" about U.S. - UAE cooperation to defuse the issue. Ambassador told AbZ that the London FTA round had been successful, but that challenges remained. She invited the UAE to send appropriate experts to the U.S. to discuss its concerns about "natural resources" stressing that this would not be a "negotiation session." AbZ replied that the Abu Dhabi Investment Authority had been tasked to come up with "creative ideas" to resolve the issue. He queried whether having a pre-meeting might make that task more difficult. The Ambassador raised concerns that the UAE's government procurement offer would not cover a significant percentage of the country's procurement (i.e., emirate level procurement). AbZ said that he thought the FTA negotiators had agreed on language resolving procurement issues. Ambassador and AbZ also discussed UAE assistance efforts to Iraq, Afghanistan, and the Palestinians. AbZ identified Minister of Economy Sheikha Lubna Al-Qasimi as the probable UAEG interlocutor on Strategic Investment Initiative issues. Ambassador informed AbZ that Venezuela was competing for a non-permanent seat on the UNSC and urged him to consider the potentially negative consequences of that possible membership. Ambassador also informed AbZ that the USG had discovered that Irbis Air Company (listed under UNSCR 1532 and 1521) was operating flights out of the Sharjah International Airport and that the UNSCRs required the UAE to take immediate action against it. AbZ turned to his assistant and said "this should be stopped immediately." End Summary. Bad Press on Dubai Ports World Purchase of P & O -------------- --- ¶3. (C) On February 15, Ambassador held her first meeting with Sheikh Abdullah bin Zayed Al-Nahyan (AbZ) as Foreign Minister (he took office four days ago). AbZ had just returned from accompanying UAE President Sheikh Khalifa on his visit to Turkmenistan. AbZ said that he wanted to discuss recent negative U.S. press about Dubai Ports World's acquisition of the Peninsular and Oriental Steam Navigation Company and its port operations in the United States. AbZ said that he was concerned about the allegations raised that the UAE was a country with close ties to the 9/11 hijackers. He told Ambassador that he thought a State Department statement at the noon press briefing was needed to "say something positive" about the relationship. Yousef Al-Otaiba, the Director of International Affairs for Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed, also asked that the Department spokesman say something during the daily press briefing. Both expressed their view that prompt action was needed to keep the issue from escalating. FTA --- ¶4. (C) Ambassador told AbZ that the recent January 30-February 1 London FTA round had successfully built on progress made in the November round, adding that it had provided greater clarity on the challenging issues remaining. She explained that we wanted to move ahead on our shared goal of completing the negotiations soon and that -- for the U.S. -- negotiations after April/May would become more difficult. She said that we understood that investment issues were tied closely to the UAE's concerns over the treatment of natural resources. Ambassador suggested that the appropriate experts needed to have an open and detailed discussion of how the UAE regulated the sector and invited the UAE to send the appropriate representatives to Washington to discuss the issue before the March 14 negotiation round in Abu Dhabi. She stressed that this would not mean that the team was negotiating on the issue, but that it would allow both sides to determine the scope of the challenge. AbZ said that the reason the UAE had asked for a delay in discussing this issue was because the Abu Dhabi Investment Agency (ADIA) had been asked to come up with "creative ideas" to bring to the "leadership" (i.e., Abu Dhabi's ruling family) on resolving this issue. He expressed concern that a pre-meeting might make it more difficult for ADIA and the Abu Dhabi National Oil Company (ADNOC) to come up with "clever solutions." He committed to checking on that issue. ¶5. (C) Ambassador also said that the UAE's services offer needed to be liberalized in regard to U.S. suppliers. She noted that the UAE's current offer does not meet the standards of U.S. FTAs, nor did it meet the standards of recent WTO accession agreements. She noted that the UAE faced a similar choice on investments. Ambassador also raised concerns about the UAE's offer on government procurement. AbZ said that he thought that the negotiators had resolved that issue by agreeing on language that the UAEG would encourage the individual governments to open up their procurement markets. Ambassador replied that the concern was that the UAEG federal procurement was so small compared to the total procurement in the UAE. Assistance - SII, Palestinians, Iraq, Afghanistan -------------- -------------- ¶6. (C) Ambassador also delivered a message on Palestinian assistance explaining that the USG could not provide assistance to a new Palestinian Authority government that has not committed to non-violence, recognized Israel's right to exist, and accepted past agreements and obligations between the parties. She noted that we were working with the international community, including with the Quartet's special envoy, Jim Wolfenson, to ensure the fiscal stability of the current caretaker government (ref d). She noted that she had met with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed (MbZ) on February 6 and that Special Envoy Wolfenson had met with him on February 13. She asked whether AbZ had any additional thoughts to share on UAE aid to the Palestinians. AbZ replied that he didn't have anything to say in addition to what his brother had said. (ref e). Ambassador also briefly discussed possible UAE donations to Iraqi and Afghan security forces (ref a). AbZ took the information on board. ¶7. (C) Ambassador reminded AbZ that EB Assistant Secretary Tony Wayne had briefed him on the Strategic Investment Initiative (SII) in January, and asked if the UAE could identify an appropriate interlocutor for the initiative (ref h). AbZ said that he thought that Minister of Economy Sheikha Lubna Al-Qasimi would be the appropriate interlocutor on SII, adding that the UAE might suggest a different interlocutor "later." Defeating Venezuela in Election for UNSC Non-Permanent Seat -------------- -------------- ¶8. (C) Ambassador informed AbZ that Venezuela was competing for a non permanent seat on the UNSC. She stressed that Venezuela has shown that it is more concerned with disrupting international events than in working constructively to achieve common goals, and urged AbZ to consider the potentially negative consequences of Venezuela's membership on the UNSC and to consider an alternate candidate. AbZ took the information on board, but made no commitment. (ref g) UN Designated Company in UAE -------------- ¶9. (C) Ambassador told AbZ that the USG recently discovered that Irbis Air Company, listed under UNSCR 1532 and 1521, was operating flights out of the Sharjah International Airport. Ambassador noted that Irbis was a front company for Viktor Bout, an international arms dealer, and noted that the UNSCRs required the UAE to take immediate action. AbZ said that he was familiar with Viktor Bout and asked whether the Embassy had raised this with others in the UAEG. Ambassador replied that Embassy DHS/Customs attach had raised it with the Ministry of Interior the previous day. AbZ turned to his assistant and said "this should be stopped immediately." Action Request -------------- ¶10. (U) Following on PAO's email today to EB/PD and NEA/PPD, post proposes the following key points be added to a modified press statement on the DP World Purchase of P&O and its operations in the U.S. -- The UAE is a key partner of the United States in the War on Terror and a close ally as we work together to create a stable economic, political and security environment in the Middle East. -- Dubai was the first Middle Eastern entity to join the Container Security Initiative when the declaration of principles was signed in Dubai on December 12, 2004. A CBP deployment team works closely with Dubai Customs to target high-risk cargo containers destined for the United States. -- In May of 2005, The United States and the Government of Dubai signed an agreement which is part of the U.S. Department of Energy's National Nuclear Security Administration Megaports Initiative, a program aimed at stopping illicit shipments of nuclear and other radioactive material. SISON