US embassy cable - 04ABUDHABI4655

C O N F I D E N T I A L ABU DHABI 004655 
 
SIPDIS 
 
STATE PASS USTR FOR NOVELLI AND BELL 
 
E.O. 12958: DECL: 12/12/2029 
TAGS: ETRD, ECON, PREL, PINR, GCC, TC 
SUBJECT: UAEG WILL PURSUE FTA WITH THE USG: DISAGREES WITH 
SAUDIS' POLITICIZING THE ISSUE (C-NE4-01168) 
 
REF: A. STATE 267492 
     B. ABU DHABI 4504 
 
(U) Classified by charge d'affaires a.i. richard albright for 
reasons 1.4 (b, d, and c) 
 
1. (C) On December 18, Charge and MFA Undersecretary Abdullah 
Rashid Al-Noaimi discussed Saudi pressure on Bahrain to back 
away from its FTA with the U.S. and the possible impact on 
the GCC summit.  Al-Noaimi reiterated UAE commitment to 
negotiating an FTA with the U.S.  He said that he did not 
understand why the Saudis were putting such strong pressure 
on the Bahrainis, adding, "they (the Saudis) signed their own 
TIFA, then they flipped." 
 
2. (C) Al-Noaimi acknowledged the need to address legitimate 
Saudi concerns about the impact of an FTA on the GCC customs 
union.   He added, however, that the UAE viewed this as a 
technical issue that called for a technical solution.  The 
UAE did not agree, he said, with the Saudis on two major 
points: one, elevating the problem from a technical to a 
political level; and two, tying the FTA issue to other GCC 
issues.  He noted that differences inevitably arise in a 
regional bloc, but that these differences shouldn't affect 
other areas of cooperation.  He emphasized that the Saudis 
shouldn't try to "strangle" Bahrain in the area of goods 
exports or oil.  He added that the UAE was pushing to keep 
this issue off the agenda of the heads of state meeting. 
(Note:  Based on press reporting, it is not clear how 
successful the UAE will be.) 
 
3. (C) Al-Noaimi briefly discussed the recent visit of UAE 
President Sheikh Khalifa bin Zayed to Saudi Arabia.  He said 
that the UAE had sought Saudi concurrence to host the next 
GCC summit in the UAE.  (Note:  The UAE had agreed with 
Bahrain that Bahrain would host the 2004 GCC summit.  It was 
not clear, whether the UAE had given up its turn or switched 
with the Bahrainis.)  He said that the issue of the FTA did 
not come up in discussion during Sheikh Khalifa's visit. 
 
4. (C) Finally, Al-Noaimi stated that the UAEG had held a 
meeting, on December 15 with all of the relevant ministers, 
to formulate a UAEG position on the FTA in advance of the GCC 
summit.  The ministers reiterated that the UAEG would proceed 
with its bilateral negotiations with the U.S. and would seek 
technical solutions to address Saudi concerns.  He added that 
the UAE, Qatar, and Oman were all backing Bahrain's decision 
to stand firm against Saudi pressure, and asked what steps 
the USG was taking to convince the Saudis to "cool it." 
 
5. (C) Comment: The Emiratis are clearly irritated about what 
they see as "heavy handed" Saudi tactics.  That said, they 
don't intend to let Saudi opposition prevent them from taking 
actions that they see are in their own national interest, 
namely negotiating an FTA with the U.S. 
ALBRIGHT