US embassy cable - 05ABUDHABI2543

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 002543 
 
SIPDIS 
 
STATE FOR NEA/ARPI, NEA/PI, EB/TPP,BTA, EAP/ANP 
 
E.O. 12958: DECL: 06/08/2015 
TAGS: ETRD, ECON, PREL, AS, TC, FTA 
SUBJECT: AUSTRALIANS GENERALLY SATISFIED WITH FTA 
NEGOTIATIONS WITH THE UAE 
 
Classified by Ambassador Michele Sison for reasons 1.4 (b and 
d) 
 
1. (C) Summary: On June 7, lead Australian negotiator Stephan 
Deady told Ambassador that he was "quite pleased" with the 
results of the second round of FTA negotiations, although the 
talks are still in a very preliminary stage.  The Australians 
plan to move the agreement forward, but are not going to try 
and push for a quick resolution.  According to Deady, the 
Australians are concerned with how the UAEG proposes to 
resolve its federal-state jurisdictional issue. He noted that 
the Emiratis were also feeling Saudi pressure for negotiating 
another bilateral FTA.  Deady explained that the Australians 
and the Emiratis had divided the job of writing text, and it 
was clear, from the UAEG's text, that the Emiratis had 
absorbed lessons from their negotiations with the U.S.  End 
Summary. 
 
2. (C) On June 7, Australian Ambassador Noel Campbell, 
Stephan Deady (First A/S Trade Development Division, 
Department of Foreign Affairs and Trade) and Mark Pierce (A/S 
Market Development, Business Liaison & Regional Trade Policy 
Branch).  met with Ambassador and EconChief to discuss the 
results of Australia's second round of FTA negotiations with 
the UAE.  Deady noted that Australia was only negotiating an 
FTA with the UAE and did not currently intend to negotiate 
FTAs with the rest of the Gulf Cooperation Council.  Deady 
emphasized that he was "quite pleased" with the progress made 
and that the next round would tentatively be in Australia in 
November. 
 
Issues and Concerns 
------------------- 
 
3. (C) Although Deady said he was pleased with the progress 
of the round, he was concerned about the federal-emirate 
jurisdictional issue.  He said that the Abu Dhabi Investment 
Authority representatives had explained that the Federal 
Government could not commit to some matters (such as control 
of natural resources) that were the responsibilities of the 
individual emirates.   Deady explained that he would not be 
able to "sell" an agreement back in Australia with only five 
percent of the UAE economy.  He was waiting to see how much 
the UAE would be willing or able to bind its emirates, but 
was optimistic the problem would be resolved. 
 
4. (C) Deady stated that the Emiratis were facing Saudi 
pressure about their decision to negotiate an FTA with 
Australia.  He noted the press reports stating that the GCC 
had come to terms with its members negotiating bilateral FTAs 
with the U.S., but not other countries.  He emphasized, 
however, that Minister of Economy Sheikha Lubna Al-Qasimi, 
had told him that the UAEG was committed to negotiating with 
Australia.  He noted, however, that the parties did not hold 
a press conference on the conclusion of the round, and his 
sense was that this was due to UAEG sensitivity to the Saudi 
opposition. 
 
5. (C) Deady also mentioned that the UAE negotiators had 
problems with transparency issues such as "prior comment," 
asking "why" the UAEG should subject its laws and regulations 
to comment in the drafting stage.  Although the Australians 
do not have a labor chapter, they did notice that the UAE was 
sensitive about its large expatriate population.  Australian 
proposed text states that the benefits of the agreement would 
apply to citizens and permanent residents of each country. 
The UAE negotiators sharply responded that "there were no 
permanent residents" in the UAE.  Deady stated that the sides 
had not discussed issues such as the Agencies law or the 
Commercial Companies law in detail during this round. 
 
Round Two - Big Picture and Exchange of Text 
-------------------------------------------- 
 
6. (C) Deady explained that this was the first real 
negotiating round.  During the first round, in Australia, 
both parties discussed concepts and agreed to share the job 
of drafting text.  Australia drafted the Services, Financial 
Services, Dispute Settlement, Customs cooperation, and 
science based standards texts.  The UAE drafted the 
E-Commerce, telecoms, technical barriers to trade, and IP 
chapters.  Australia will draft the procurement and rules of 
origin chapters.  According to Deady, the UAE's texts 
appeared to reflect its negotiations with the U.S.  He said 
that he recognized some of the concepts from the U.S. - 
Australia FTA. 
 
7. (C) Deady said that the negotiators were not yet going 
through the document "line-by-line" but were still getting to 
know each other.  This approach suited the Australians, he 
emphasized, since they were still consulting with industry 
about specific goals and objectives for the FTA.  He admitted 
that this was one FTA where the Australians had agreed to 
negotiate, before finishing all of their internal 
consultations.   Deady told Ambassador that he thought the 
UAEG negotiators were very dedicated to the FTA negotiations, 
but that they were still very inexperienced.  He had the 
sense that they had not quite realized the detailed nature of 
the U.S. and Australian FTAs when they agreed to negotiate. 
 
Comment 
------- 
 
8. (C) It is apparent that the UAE is learning from its U.S. 
FTA negotiations and that the Australians are facing some of 
the same issues that we are.  A key issue will be how the 
UAEG proposes to resolve its federal-state jurisdictional 
issue and bring the individual emirates on board.  We believe 
that the UAEG leadership remains committed to an FTA with the 
U.S.  It is clear, however, that the Emiratis did not realize 
just how much they were "biting off."  The UAE negotiators 
are working hard, but are facing a steep learning curve and 
are stretched by several commitments, including the U.S. and 
Australian FTAs, the GCC FTA and other commitments, such as 
the annual ILO meetings in Geneva.  End Comment. 
SISON