UAE OPEN TO COMPROMISE ON GCC CUSTOMS UNION WTO

UNCLAS ABU DHABI 000234 SENSITIVE SIPDIS STATE FOR NEA/ARP (MASILKO) AND NEA/RA (SCOVITCH) STATE PLEASE PASS USTR (BUNTIN, MORROW) GENEVA FOR SHUB E.O. 12958: N/A TAGS: ETRD PREL USTR AE SUBJECT: UAE OPEN TO COMPROMISE ON GCC CUSTOMS UNION WTO NOTIFICATION REF: STATE 19377 ¶1. (U) This cable contains an action request in para 3. ¶2. (SBU) On March 10, EconOff discussed reftel concerns about the WTO notification of the GCC Customs Union under the Enabling Clause with Ministry of Foreign Trade Director of Trade Negotiations and WTO Department Juma al Kait. Al Kait argued that it was the right of any developing country to use the Enabling Clause, rather than GATT Article XXIV. While agreeing that Saudi Arabia was in violation of its WTO accession commitments, al Kait said it was the UAE's "right" as a developing country to notify under the Enabling Clause. ¶3. (SBU) Al Kait argued that the GCC common external tariff was not contrary to GATT Article II, as GCC tariff rates do not exceed the UAE's WTO tariff bindings. He explained that the UAE's tariff bindings were initially 15 percent, and declined to approximately 6.5 percent in 2006. Conceding that he could be mistaken, he asked for further information about how the USG believes the GCC Customs Union violates the UAE's WTO tariff bindings. ACTION REQUEST: Post asks that USTR provide additional details on this matter before March 12 (see below). ¶4. (SBU) However, al Kait concluded by saying that the UAE did not "have a problem" with switching the notification to Article XXIV. He said that GCC officials would have a coordination meeting on the subject on March 12 and that he was willing to find a compromise solution. Al Kait suggested US and GCC officials plan to meet to discuss US concerns in advance of the March 13 CTR meeting, perhaps the afternoon of March 12. (Note: Al Kait said that such a meeting could be arranged through Obaid Al Kindi at the UAE Mission in Geneva. End Note.) Al Kait added that he would also review the Mercosur notification, as it might be relevant to the GCC situation. OLSON