US embassy cable - 05ABUDHABI4306

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 004306 
 
SIPDIS 
 
STATE FOR NEA, NEA/ARPI 
STATE FOR EB/TPP/BTA 
STATE PASS USTR FOR SHAUN DONNELLY AND DOUG BELL 
 
E.O. 12958: DECL: 10/12/2015 
TAGS: ETRD, ECON, PREL, TC 
SUBJECT: SHEIKH HAMDAN DISTURBED BY LACK OF FTA PROGRESS IN 
LONDON 
 
 
Classified By: CDA Martin Quinn for reasons 1.4 (b & d). 
 
1. (C) Summary: On October 11, UAE Deputy Prime 
Minister/Minister of State for Foreign Affairs Sheikh Hamdan 
bin Zayed told Charge and Econ Counselor that he was 
disturbed by the performance of both sides during the high 
level FTA talks in London on October 7.  He stressed that FTA 
negotiations were not going well and that both sides needed 
to work toward compromise.  He said that if the negotiations 
continued the way they were going, they would not succeed in 
the time frame desired.  Sheikh Hamdan also said that the 
negotiations were too important to leave to "employees" 
(&muwathafiin8) and that he would be taking a much closer 
high level interest on the UAE side.  Although Sheikh Hamdan 
did not discuss detailed problem areas, areas of concern that 
we know about include: telecommunications liberalization, the 
jurisdiction of the agreement, and visas.  Charge stressed 
that we were partners in this endeavor, noting also that 
there were areas where legally we had little room to 
maneuver.  End Summary. 
 
2. (SBU) Deputy Prime Minister/Minister of State for Foreign 
Affairs Sheikh Hamdan bin Zayed (HbZ) convoked Charge on 
October 11 at 8 p.m. to discuss his concerns about ongoing 
FTA negotiations.  Hamdan was accompanied by MFA U/S Abdullah 
Rashid Al-Noaimi, A/US for International Cooperation Mohammed 
Abdul Jalil, UAE Ambassador to Washington Al Asri Al-Darer, 
and HbZ's translator Zaki Al-Nusaiba.  There were no 
representatives from either the Ministry of Finance or the 
Ministry of Economy (the co-leads on the FTA negotiations). 
 
London Talks Went Badly 
----------------------- 
 
3. (C) HbZ explained that he had been disturbed by reports 
about the October 7 meeting between lead FTA negotiators in 
London.  He said that he was not happy with what he had heard 
about the performance of either side, adding that he had 
gotten the impression that both sides were trying to "hector" 
or score points, rather than trying to achieve the common 
goal of an FTA.  Charge said that he understood the talks in 
London had been frank, but that some progress was made. 
Al-Noaimi interjected that the whole discussion had been 
one-sided: focusing on necessary UAE concessions.  When the 
UAE looked for concessions on the U.S. side, the answer was 
always "no."  HbZ said that it appeared that the new head of 
the U.S. delegation was trying to get the UAE to make more 
concessions than his predecessor had, and this "was not going 
to happen." 
 
It Can't Continue Like This 
--------------------------- 
 
4. (C) HbZ emphasized that, from the start of negotiations, 
the UAE had offered negotiation "concessions" without 
comparable movement on the U.S. side.  He stressed that the 
FTA should be "50-50" with neither side getting everything it 
wanted.  HbZ acknowledged that there would be areas on both 
sides that were not subject to negotiation because they were 
matters of sovereignty.  He noted, however, that he thought 
there was room to come to agreement on many issues.  Charge 
told HbZ that we welcomed the partnership we have with the 
UAE in many areas, and that we want the same type of 
partnership in our trade relations -- which will benefit both 
nations.  He said that we viewed the negotiations as a 
partnership, but stressed that there were areas where the USG 
had very little flexibility, because of U.S. law and the need 
to work with Congress to ratify any agreement. 
 
5. (C) HBZ said that the UAE also needed to work with its 
constituents in the public and private sector.  The UAE, he 
said was "determined to succeed" but if the U.S. presented 
unacceptable conditions, it would make it impossible for the 
UAEG to build consensus to support the agreement.  He added 
that the government was already feeling pressure from 
constituents due to concessions it had made.  HbZ said that 
if the negotiations continued the way they had gone, both 
sides would be "unable to achieve agreement" within the 
expected timeframe. 
 
High Level Push Needed 
---------------------- 
 
6. (C) HbZ also stressed that he thought the negotiations 
were too important to be left in the hands of the "working 
level employees" on either side.  The negotiating teams were 
representing the interests of their respective governments 
and needed to be "instructed" to work toward agreements "at 
the mid-point."  HbZ then explained that he would be paying 
attention to the negotiations at "a high level."  Subsequent 
to this meeting, Minister of Information Sheikh Abullah bin 
Zayed conveyed a similar message by phone to A/S Welch. 
 
Comment 
------- 
 
7. (C) The high level intervention by two influential 
Al-Nahyan brothers shows the seriousness with which they are 
taking the negotiations and their concern that things are not 
moving as quickly -- or as positively -- as hoped.  Both HbZ 
and Sheikh Abdullah have previously committed themselves to 
the success of the negotiations.  Although HbZ did not 
mention specifics during his conversation, there are several 
areas of concern for both sides.  These include: 
 
-- Visas: The UAE has asked to include provisions for 
temporary entry, citing FTAs with Singapore and Chile as 
precedent.  USTR has clearly said that we do not have the 
authority to include visas in an FTA. 
 
-- Federal-Emirate Jurisdiction:  The UAE has explained that 
an FTA can only bind the UAEG, not the individual emirates. 
The problem with this position is that the UAEG makes up a 
very small part of the overall UAE economy.  The Emirate of 
Abu Dhabi, for example, has more government procurement than 
the UAEG. 
 
-- Telecommunications: The UAE refuses to open up its 
telecommunications sector for 10 years, citing a need to let 
a second telecommunications company establish itself. 
 
-- Security of Assets: The Abu Dhabi Investment Authority has 
significant investments in the United States and wants a 
formal mechanism to review the potential freezing of UAEG or 
Abu Dhabi government assets under the Patriot Act or OFAC 
sanctions, etc. 
 
-- Agencies and Companies Laws: During the meeting with 
Charge, Al-Noaimi cited UAE movement on these laws, as an 
example of how the UAE has made a concession on an issue of 
U.S. concern. 
 
Comment (continued) 
------------------- 
 
8. (C) HbZ,s comments about the UAE,s being obliged to take 
a step that could have negative repercussions, could be an 
elliptical allusion to the Arab League Boycott of Israel. 
UAEG officials have previously told us that UAE policy is to 
not implement the secondary and tertiary boycotts, but that, 
as members of the Arab League, they are not prepared to move 
on the primary boycott.  We understand from USTR that Sheikha 
Lubna (Minister of Economy) and Dr. Mohammad Khirbash 
(Minister of State for Finance and Industry) became irate 
over discussion of the primary boycott issue in London.   End 
Comment. 
QUINN