US embassy cable - 05ABUDHABI883

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 000883 
 
SIPDIS 
 
STATE FOR NEA, NEA/ARPI, NEA/PI 
STATE FOR EB, EB/TPP/BTA 
STATE PASS USTR FOR DOUG BELL 
GENEVA FOR LABOR ATTACH 
COMMERCE FOR BIS/NWEANT 
 
E.O. 12958: DECL: 02/23/2015 
TAGS: ETRD, ECON, ELAB, KBCT, TC 
SUBJECT: EMIRATI PREPARATIONS FOR FTA TALKS CONTINUE 
 
REF: ABU DHABI 711 
 
Classified By: Ambassador Michele J. Sison for reasons 1.4 (b and D) 
 
1. (C) Summary: On February 19 Minister of Economy Sheikha 
Lubna Al-Qasimi told Ambassador that she understood that 
labor was a potential "show stopper" for the USG on the FTA, 
and that the UAE Minister of Information had stressed to the 
UAE cabinet that the UAEG needed to push forward with labor 
reforms rapidly.  She also said that MinState for Finance 
Khirbash would have the lead in the negotiations, despite her 
co-chair status.  Ras Al Khaima Crown Prince and businessman 
Sheikh Saud Al-Qasimi complained that the UAEG was not doing 
enough to keep businesses informed about the negotiations. 
Ambassador passed Sheikha Lubna a list of the 11 Arab League 
boycott cases that had been received over the last quarter. 
End Summary. 
 
Labor 
----- 
 
2. (C) On February 19, Ambassador met with Minister of 
Economy Sheikha Lubna Al-Qasimi to discus the upcoming FTA 
talks.  Ambassador highlighted labor issues -- and the lack 
of an ILO compliant labor law -- as continuing issues of 
serious concern for the USG.  Sheikha Lubna said that she, 
and other UAE cabinet members, understood that labor rights 
could be an FTA "show stopper" for the USG.  She added that 
UAE Information Minster Sheikh Abdullah bin Zayed Al-Nahyan, 
who had recently visited Washington and met with Ambassador 
Zoellick on the FTA, had taken over 15 minutes of the weekly 
cabinet meeting to emphasize that the UAEG needed to push 
forward rapidly with labor reforms. She also suggested that 
the Ambassador "gently" underscore the labor issue with Abu 
Dhabi Crown Prince Sheikh Mohammed bin Zayed Al-Nahyan and 
Dubai Crown Prince Sheikh Mohammed bin Rashid Al-Maktoum. 
MinFin A/US Khalid Al-Bustani subsequently told EconChief 
that the labor chapter of the draft UAE FTA text was much 
"tougher" than that in the other agreements he had reviewed. 
EconChief reiterated our concerns that the UAE labor law be 
ILO compliant. 
 
FTA Teams 
--------- 
 
3. (C) In response to Ambassador's question about the 
division of labor between her and Dr. Khirbash, she said that 
she saw Dr. Khirbash as playing the leading role.  She also 
explained that Assistant Undersecretary for Economic Affairs 
and International Cooperation Abdulla Al-Saleh would be the 
Ministry of Economy's main senior working level coordinator 
for the areas for which the Ministry of Economy was 
responsible.  Ambassador stressed our hope that both sides 
would be able to move quickly through non-controversial 
topics and then focus on resolving any areas of disagreement. 
 In a subsequent conversation with EconChief, MinFin A/US 
Khalid Al-Bustani expressed his hope that some of the teams 
would be able to "close out" their chapters quickly and would 
be able to give AUSTR Novelli and MinState Finance Khirbash 
an agreed product by the end of the negotiating round.  He 
noted, however, that the UAEG had only "just" received the 
draft negotiating text and was still reviewing it.  He added 
that the lack of an Arabic text complicated their efforts, 
and noted that he had looked for Arabic copies of the FTA's 
with Bahrain and Morocco, but without success. 
 
Arab League Boycott 
------------------- 
 
4. (SBU) Ambassador passed Sheikha Lubna a list of the 11 
Arab League boycott cases that had been received over the 
last quarter, noting that EconChief had previously passed 
them to MinEcon staff; but that she wanted to follow-up to be 
sure the issues were resolved expeditiously.  Sheikha Lubna 
instructed her staff to contact the institutions involved and 
inform them that the UAE did not/not apply the secondary and 
tertiary boycott.  MinEcon A/US Abdulla Al-Saleh confirmed 
that he was already working on these cases. 
 
UAE Business Concerns 
--------------------- 
 
5. (C) On February 20, Ambassador met with Ras Al Khaimah 
Crown Prince Sheikh Saud bin Sukkur Al Qasimi and with UAE 
Finance Minister Sheikh Hamdan bin Rashid Al-Maktoum and 
discussed the upcoming FTA.  Sheikh Saud, who has interests 
in the UAE's largest pharmaceutical, cement, and ceramics 
plants, complained that the UAEG was not consulting the Dubai 
business community enough, although he understood that the 
U.S. side was actively seeking input from the American 
business community.  Sheikh Hamdan said that he was looking 
forward to the upcoming FTA negotiations and to AUSTR 
Novelli's interest in meeting with the Dubai business 
community. 
 
6. (C) Comment:  We have heard other private sector Emiratis 
complain about the lack of consultation.  Based on our 
conversations with UAEG officials, however, the UAEG appears 
very conversant with the concerns expressed by the private 
sector, including the impact of the FTA on their agency 
relationships.  We know that Dr. Khirbash has met with 
prominent merchant family members and understand that the 
Central Bank either has or will send out a questionnaire to 
all banks soliciting their input on their concerns.  The UAEG 
is, however, taking confidentiality seriously.  The UAEG has 
encrypted the texts and is requiring every recipient to sign 
for his or her copy.  According to Al-Bustani, the 
negotiating committee has also prohibited the negotiators 
from commenting to the press in advance of the negotiations. 
End Comment 
SISON