UAE TALKS FTA WITH A/S WAYNE

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 000072 SIPDIS DEPT FOR NEA, NEA/ARPI DEPT FOR EB/TPP/BTA STATE PASS USTR FOR AMBASSADOR DONNELLY AND DOUG BELL E.O. 12958: DECL: 01/07/2016 TAGS: ETRD ECON EFIN AE FTA SUBJECT: UAE TALKS FTA WITH A/S WAYNE REF: 05 ABU DHABI 4573 Classified By: Ambassador Michele J. Sison, reasons 1.4 (b and d). ¶1. (C) Summary: Assistant Secretary for Economic and Business Affairs Tony Wayne, Treasury DAS Ahmed Saeed, and Ambassador Sison met Sheikh Abdullah bin Zayed al Nahyan, Minister of Information and Abu Dhabi ruling family member in Dubai January 6. They discussed the Free Trade Agreement negotiations, as well the Strategic Investment Initiative and terror finance cooperation (latter two subjects reported septels). A/S Wayne indicated that at some point soon, the U.S. Administration would have to prioritize those FTA negotiations likely to result in an agreement and thus urged that UAE negotiators move ahead in upcoming talks on investment issues. Sheikh Abdullah stressed the importance the UAE overall leadership puts on signing an FTA with the U.S. to further advance the bilateral relationship. He asserted, however, that its terms should more closely resemble FTAs with countries with "more similar" economies, such as Singapore and Malaysia (sic),rather than resembling the FTAs with Bahrain and Oman. End Summary. ¶2. (C) Despite the UAE government shut-down to mark the death of late Dubai Ruler and UAE Prime Minister and Vice President Sheikh Maktoum, Sheikh Abdullah bin Zayed al Nahyan, Minister of Information and brother of UAE,s president, kept his appointment with visiting Assistant Secretary for Economic and Business Affairs Tony Wayne, Treasury DAS Ahmed Saeed, and Ambassador Sison. They met January 6 in Dubai after the day,s condolence calls and discussed the status of Free Trade Agreement (FTA) talks, as well as the strategic investment initiative and terrorism financing (reported septel). Also present were EB/IFD/ODF Financial Economist Roland de Marcellus, NEA/ARPI Deputy Director Steve Walker, and Acting Consul General Jillian Burns (notetaker). BOTH SIDES WANT AN FTA -------------- ¶3. (C) Both sides reassured each other of the importance they put in achieving an FTA. A/S Wayne stressed how both countries would benefit and how committed the U.S. is to achieving an agreement. Sheikh Abdullah said the UAE was very interested in having an FTA, not just for the sake of having it, but also as a way to enhance the overall relationship. He also said no other agreement with any other country has consumed the time in UAE cabinet meetings that this agreement has. The UAE's political leaders support the agreement in principle, but there remained considerable concern over the details. CHALLENGES REMAIN -------------- ¶4. (C) A/S Wayne brought up the apparent deadlock over the investment segment of the FTA, to be addressed in a January 16 meeting in Washington between UAE Ministry of Finance officials and USTR's investment negotiators. He urged that the UAE negotiators be given greater flexibility. From the USG perspective, this meeting will be critical as the Administration will soon have to decide which FTA negotiations to prioritize, to focus on those most doable in the timeframe needed for congressional approval, he underscored. ¶5. (C) Sheikh Abdullah replied that from a UAEG perspective, the Bahrain FTA set a "bad precedent" for what terms a country should accept. To be blunt, he said, the terms in the Bahrain FTA are "unacceptable" for the UAE. The UAE economy is more comparable to Singapore and Malaysia (sic) than Bahrain and Oman, and therefore, the FTA terms should resemble more our FTAs with those countries. ¶6. (C) A/S Wayne explained that the U.S. has signed a range of FTAs reflecting the situations of the partner countries but that all contain a number of USG bedrock principles that are not negotiable. At the same time, he said, the U.S. realizes the need to address the UAE's core issues. ¶7. (C) Sheikh Abdullah reviewed key UAE FTA concerns: -- Natural Resources/Petroleum: "dead end" without progress; -- Labor, Telecommunication, Investment: key issues but in his view, doable; -- Agriculture: tricky because dates were the UAE's only product and the chairman of the (House) committee is from a date-growing state, California. ¶8. (C) Abdullah said the UAE has moved a long way on many of these issues, for instance, almost a 180 degree turnaround on IPR. He added that he and other UAE leaders viewed the FTA as a "healthy exercise" to reexamine the country,s legislation. However, he implied doubt that the U.S. was making sufficient effort. A/S Wayne acknowledged the difficulty of some of the things the USG is asking. Nonetheless, he said, the U.S. will have soon have to assess which of our various FTA negotiations are closest to fruition and focus our energies on them. ¶9. (U) A/S Wayne has cleared this message. Dubai cable being sent out from Abu Dhabi due to the Eid holiday. SISON