US embassy cable - 04ABUDHABI3386

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Identifier:	04ABUDHABI3386
Wikileaks:	View 04ABUDHABI3386 at Wikileaks.org
Origin:	Embassy Abu Dhabi
Created:	2004-09-28 05:43:00
Classification:	UNCLASSIFIED//FOR OFFICIAL USE ONLY
Tags:	ETAD ECON EFIN TC
Redacted:	This cable was not redacted by Wikileaks.

UNCLAS ABU DHABI 003386 
 
SIPDIS 
 
STATE FOR NEA/ARP 
AMCONSUL DUBAI FOR MCARVER 
STATE PASS USTR 
 
SENSITIVE 
 
E.O. 12958: DECL: N/A 
TAGS: ETAD, ECON, EFIN, TC 
SUBJECT: UAE HESITANT TO ENTER INTO GCC/UE FTA 
 
 
1.  (SBU) Summary: Gulf News reported recently that a 
GCC/EU free trade accord would likely be signed within the 
next few months.  Officials from the UAE Ministry of 
Economy and Commerce are not enthusiastic about the 
potential FTA, and are skeptical that it will come to 
fruition in the near future. End summary. 
 
2.  (U) A 13 September Gulf News article reported that the 
GCC and the EU recently accelerated their efforts to 
conclude negotiations and were working to remove the final 
hurdles to signing an FTA.  The article stated that Saudi 
Arabia decided to remove double pricing on gas, and in 
return the GCC will ask the EU to lift taxes on 
petrochemicals and aluminum products.  Anonymous GCC 
sources stated in the article that if the EU agrees to lift 
the taxes, the FTA might be signed in the coming months. 
 
3.  (SBU) UAE officials are not optimistic about the 
potential for an FTA and do not believe that it will be 
enacted before the end of the year.  In a recent meeting 
with the Ministry of Economy and Commerce, a Ministry 
official noted that a GCC/EU FTA would be very difficult to 
enact, particularly because the UAE is not ready to open 
some sectors that Saudi Arabia has already opened.  He 
noted that Saudi Arabia and other GCC countries are in 
agreement regarding WTO provisions relating to goods, but 
that Saudi Arabia is more forward leaning than the UAE and 
other GCC countries regarding policies relating to 
services.  In a separate meeting with another Ministry 
official, the official noted that the problem areas 
regarding the FTA are due to the GCC countries being unable 
to agree to equally liberalize certain sectors, 
particularly insurance and investment. 
 
4. (SBU) During a meeting this summer in Riyadh to discuss 
the negotiations, the UAE advocated moving slowly and 
waiting for the EU to offer concessions that would advance 
negotiations. 
 
Sison