US embassy cable - 03ABUDHABI1570

C O N F I D E N T I A L ABU DHABI 001570 
 
SIPDIS 
 
STATE FOR NEA/ARP, NEA/RA, EB AND EUR 
USEU FOR LITZENBERGER 
USDOC FOR 4530/ITA/MAC/ONE/DGUGLIELMI, 
4520/ITA/MAC/ONE/CLOUSTAUNAU, 
4500/ITA/MAC/DAS/WILLIAMSON, 3131/CS/OIO/ANESA, 
COMMERCE PASS USTR FOR BUNTIN 
 
E.O. 12958: DECL: 04/01/08 
TAGS: ECON, PREL, ETRD, KIPR, BEXP, EU, TC 
SUBJECT: UAE SAYS GCC-EU FTA DISCUSSIONS MAKING NO HEADWAY 
 
 
1. (U) CLASSIFIED BY DCM RICHARD A. ALBRIGHT - 
REASONS: 1.5 (D). 
 
2. (C)  The MFA's Deputy Director for GCC Affairs, Khalid 
Al-Ghaith, gave Econchief a readout April 1 of ongoing 
discussions between the European Union and the GCC towards 
concluding a Free Trade Agreement (FTA).  According to 
Al-Ghaith, it is clear that the EU is not serious about 
reaching such an agreement.  At each successive meeting to 
discuss the issue, the Europeans introduce new 
demands/requirements. 
  The recent gathering in Doha in early March had driven home 
this fact:  the EU had broadly hinted that an FTA would need 
to wait upon Saudi accession to the WTO.  This "suggestion" 
had then been followed by a formal demand that the GCC 
states become signatories to a large number of international 
conventions (seven or eight) dealing with Intellectual 
Property Rights.  The Emirati noted that the UAE had already 
signed on to a few of these, but most of the GCC had not; the 
measure appeared intended only to further delay an FTA. 
 
3.  (C)  Without wanting to overtly criticize the Saudis, 
Al-Ghaith made it plain that multilateral negotiations were 
being hindered by "our largest link, which is also the 
weakest."  He contrasted the difficulty in making progress on 
economic issues when dealing as a collective (be it via the 
EU-GCC discussions or the US-GCC meetings) as opposed to the 
quite positive results which can be achieved bilaterally. 
Here he noted the good effect that the U.S.-UAE Strategic 
Dialogue had had in raising the profile of bilateral economic 
issues.  Al-Ghaith observed that the UAE remains off the 
Special 301 Watchlist and that the UAE's FAA- equivalent body 
(the GCAA -- headed by his brother, Muhammad Al-Ghaith) had 
just been given top marks by U.S. authorities, clearing the 
way for Emirates Airlines to fly to the USA.  Now if only the 
issue of the frozen U.S. assets of the Arab Bank for 
International Finance and Trade (ARBIFT) could be resolved, 
and OPIC insurance coverage restored,we could say the 
bilateral economic agenda was in very good shape indeed. 
Econchief agreed, adding that partnership with the UAE in 
combating terrorist financing and money-laundering was 
another key area of continuing success. 
 
4.  (C)  Comment:  Al-Ghaith is one of the most capable of 
the UAE's diplomats when it comes to economic issues.  He 
regularly attends the US-GCC Economic Dialogue and previously 
served as the Emirati rep at the WTO.  Nonetheless, his sense 
that the EU's demands for securing an FTA are somehow 
unreasonable (they strike us as quite modest in comparison to 
what we would likely require in a similar negotiation) 
reflects an inexperience if not naivete which highlights the 
significant human resources shortfalls of the UAE when it 
comes to these sorts of deliberations.  It is precisely this 
general lack of understanding of how things work that impedes 
the UAE from playing a more effective role in the WTO -- one 
of the reasons that post very much hopes that MEPI funds will 
be made available for WTO training initiatives in the region. 
 
Wahba