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