US-UAE free trade deal in limbo

Gulf News (UAE)

08/Jan/2007

US-UAE free trade deal in limbo

By Ivan Gale, Staff Reporter

Dubai: A trade deal between the United States and the United Arab Emirates remains in limbo despite several recent talks between the two parties, according to experts.

"The UAE is trying to make up their mind whether they want to kill it or not," Bill Reinsch, president of the National Foreign Trade Council, said during a discussion with reporters.

"It’s been taking them a while. I think [lead US negotiator Shaun Donnelly] genuinely doesn’t know what they’re going to do," he added.

The US began talks with the UAE in March 2005, about the same time as it launched negotiations with Oman.

Talks have stalled over differences regarding the chapter on investments, according to David Bohigian, US assistant secretary of commerce for market access and compliance, who was in Dubai last November.

He told Gulf News that opening up infrastructure industries to foreign investment and allowing majority ownership in local businesses could be sticking points.

"We need to regain momentum in those talks immediately and be able to conclude those talks in a few months," he said.

The US and Oman signed a trade deal one year ago, but talks with the UAE lagged behind and were further damaged by a furore in early 2006 over DP World’s purchase of certain US port operations.

DP World sold off the port operations to soothe US congressional concerns, but the free trade talks remained on the back burner for most of 2006.

Omar Rana, managing director of Gulf Capital Group, said the UAE was right to take its time as free trade deals can often result in inequalities.

"The important thing is going to be ensuring there is some sort of equality in terms of the trading agreement," he said.

Gretchen Hamel, a spokeswoman for the US Trade Representative’s office, said US and UAE officials have met several times in the past two months to discuss the pact.

"Both sides are engaged at senior levels. Recently, [Assistant US Trade Representative] Donnelly was in the UAE for talks. We plan to hold subsequent discussions in February," she said. "I believe the American view is the ball is sort of in their court," said Reinsch, whose group has been a major supporter of the Bush administration’s effort to secure free trade agreements in the Middle East.

The Bush administration needs to wrap up a deal with the UAE by late March to get it through Congress before its "trade promotion authority" expires at the end of June.

With inputs from Reuters

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source: Gulf News