US embassy cable - 04ABUDHABI4719

C O N F I D E N T I A L ABU DHABI 004719 
 
SIPDIS 
 
PASS TO USTR DOUG BELL 
 
E.O. 12958: DECL: 12/21/2009 
TAGS: PREL, ECON, ETRD, GCC, TC 
SUBJECT: UAE PERSPECTIVE ON GCC SUMMIT 
 
REF: ABU DHABI 4655 
 
(U) Classified by Richard A. Albright, reasons 1.4 (b) and 
(d). 
 
1. (C) Summary: New UAE President Sheikh Khalifa bin Zayed 
Al-Nahyan closed the GCC summit, named after his late father 
Sheikh Zayed, by inviting his fellow leaders to Abu Dhabi for 
the 26th GCC Summit in December 2005.  According to local 
press and UAEG officials, the GCC dodged the contentious 
issue of the Bahrain - U.S. FTA by "kicking it back to 
(ministerial) committee."  UAEG officials told us that they 
had disagreed with the Saudi decision to raise the issue to a 
political level rather than solving it as a technical 
problem.  The UAE and Qatar also announced their agreement to 
build a causeway linking Abu Dhabi with Qatar and the GCC 
reiterated its support for UAE sovereignty over the three 
islands occupied by Iran.  End Summary. 
 
2. (C) Ministry of Economy Assistant Under Secretary for 
International Cooperation Abdullah Al Saleh, who had attended 
the summit, told EconChief that there had been absolutely no 
progress on resolving the issue of member-states' bilateral 
FTAs with the U.S.  He stressed that no one in the UAEG had 
wanted the leaders to discuss an issue that had not been 
worked out in advance.  He noted, however, that GCC leaders 
ultimately did discuss the FTA issue in an executive session 
and decided to pass it back to ministers for action.   He 
noted those ministers had not been able to find a technical 
solution and had passed the problem to their superiors.  He 
added, however, that he saw a number of relatively easy 
technical solutions to the problem.  One possible solution, 
he suggested, would be to insert a clause into a bilateral 
FTA asserting that goods brought into a country duty free 
under the FTA would not be eligible for duty free shipment to 
other members of the GCC Customs Union. 
 
3. (C) Khalid Al Bustani, Assistant Under Secretary for 
Revenue and Budget at the Ministry of Finance, who had not 
attended the summit, told EconChief that he thought every 
state but Saudi Arabia backed Bahrain's decision to sign a 
bilateral FTA with the U.S.  He referred to the press reports 
that the summit had sent the FTA issue back to the ministers 
to discuss.  Repeating a common theme here, he added that the 
subject should never have been raised to a political level in 
the first place, and that Saudi Arabia's concerns over 
customs revenue could be solved as a technical matter.  Both 
Al Bustani and Al Saleh underscored that their ministries are 
busily preparing for the upcoming FTA negotiations with the 
U.S. 
 
4. (C) Yousef Al Otaiba, special advisor to Abu Dhabi Crown 
Prince Sheikh Mohammed bin Zayed, commented to Charge 
December 21 that everyone in the GCC understood perfectly 
well that it would be a long time before Saudi Arabia was 
ready for an FTA.  He likened Saudi behavior on the issue to 
that of a child excluded from a game who was trying to ruin 
it for everyone else.  He shrugged, saying, "The Saudis are 
just like that sometimes." 
 
5. (C) The "Zayed Summit" concluded with leaders reaffirming 
their support for the UAE in the dispute with Iran over three 
islands, occupied by Iran.  Papers quoted the summit final 
statement saying "the islands are an inseparable part of the 
UAE."  Additionally, the GCC general secretariat announced a 
decision to build a causeway linking Abu Dhabi in Qatar to 
facilitate road travel between the two states.  (Note: This 
is the first we have heard of this project.  End note) 
 
6. (U) Next year,s GCC summit will be held in Abu Dhabi. 
The 2004 GCC Summit was to have been held in Abu Dhabi.  The 
official story is that Bahrain asked the UAEG to host the 
summit, but our understanding is that the opposite occured. 
Then President Sheikh Zayed,s failing health and significant 
delays in completing the Conference Palace Hotel and related 
infrastructure had made it inconvenient for Abu Dhabi to host 
this year. 
ALBRIGHT