UAE/US free trade discussions limp on

Arabian Business

UAE/US free trade discussions limp on

by Rob Corder on Monday, 12 February 2007

Stop-start free trade talks between the UAE and the United States are making progress, according to the UAE Ministry of Finance and Industry, particularly in the areas of standards, environment, e-commerce, penetration to markets and copyrights.

According to a statement issued today by a Ministry official, the two sides are working hard to overcome outstanding issues, but did not comment on reports that the UAE’s record on human rights, and the banning of labour unions are obstacles.

UAE and US officials met in London last week to review the progress by the various negotiation teams. At the end of the meeting, the two sides restated their committment to expedite the talks with the view of ultimately reaching a free trade agreement.

On 23rd January, Dr Mohammad Khalfan Bin Kharbash, UAE Minister of State for Financial and Industrial Affairs, said the two sides were still discussing labour, market access, investment protection, and issues related to the services and communications sectors. "Some of the chapters are closed. We are currently working on four chapters," he said during an economic conference in Dubai.

"We have a meeting in February with our counterparts to evaluate [the progress]. But let me assure you it has been positive," he said.

Diplomats close to the negotiations, which started in early 2005, said the US wanted the UAE to allow the establishment of workers’ unions and take more measures to improve its human rights record, according to a report in Lebanese political magazine, Monday Morning.

"These are political demands but there were other conditions as well", one Western diplomat said, requesting anonymity.

"They include further measures to protect intellectual property, the opening up of the UAE oil sector to US companies on production sharing basis, tearing down all barriers to US products and permitting American firms to have 100-percent ownership in UAE projects".

The US made similar demands before it finalized FTAs with the UAE’s Gulf partners Bahrain and Oman.

Relations between the UAE and the US have been strained since the collapse of Dubai Ports World’s purchase of some US port operations in 2006. The acquisition was opposed by the US Congress.

But the country remains committed to brokering an agreement because it recognises the economic benefits of being able to trade freely with the lucrative US market.