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US trade deal close to stalemate

posted on 15/01/2007: 2250 views

The free trade negotiations between the UAE and the US are at risk of a stalemate if an agreement is not reached within a month, according to a senior government official. "Democrats are now in charge of the US Congress, and such change is adding to the odds facing the agreement," Younes Esmail Khoury, the recently-appointed undersecretary of the Ministry of Finance and Industry, told Gulf News yesterday.

"First there was the issue of rejecting DP World's acquisition of P&O's US-based assets, and the subsequent repercussions, a matter that seriously affected the course of the negotiations, and at this point there are two problematic chapters in the agreement that need to be resolved before its too late, investment and energy."

Each emirate has a different policy on granting concessions for oil exploration since their crude and gas reserves vary. So a unified agreement, tackling the issue at the national level, is almost impossible, according to Al Khoury.

Second, foreign investments are also received through varying processes, and accordingly a collective agreement can be as difficult. "A solution can be achieved detailing these chapters to include a different arrangement with every emirate. Nevertheless, the agreement seems to be on a collision course with the UAE's confederation system, a case that was not present when the US negotiated agreements with Bahrain or Oman," he said.

Meanwhile, Abdullah Al Saleh, the undersecretary in the Ministry of Economy, explained that the issue is being handled completely by the Ministry of Finance and Industry, and that the embassies and diplomatic channels are not aware of the details, which are being handled by the specialised teams from both sides.

Last week, Reuters reported that the conclusion of the agreement is still possible, quoting American sources.

"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 they're going to do."

"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 pacts in the Middle East. (Gulf News-With inputs from Reuters)


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