U.S., United Arab Emirates Postpone Free-Trade Negotiations

USTR describes delay, following flap over ports sale, as "not unusual"

The United States and the United Arab Emirates (U.A.E.) have postponed free-trade agreement (FTA) negotiations but have not indicated whether the delay is related to the decision by a Dubai-owned company to sell its U.S. port holdings.

"The U.S. and UAE are strongly committed to making progress on our FTA negotiations," Neena Moorjani, spokeswoman for the Office of the U.S. Trade Representative (USTR), said in a March 9 statement.

She said the two countries continue to work on negotiating issues but need more time to prepare for the next round of negotiations, which began a year ago. (See related article.)

"This is not unusual," Moorjani said. "Just in the past few months, we've postponed rounds with Ecuador three times, Panama twice and Colombia once."

The postponement of negotiations scheduled for the week of March 12 was announced just after Dubai Ports World (DP World) said it would transfer its operations at a number of U.S. ports to a U.S. entity not yet identified.

The deal under which DP World bought those operations from a United Kingdom company was defended vigorously by the Bush administration but faced overwhelming opposition in the U.S. Congress.

"The decision by the company is a way to move forward, and it does resolve this matter so that we can continue focusing on other important priorities," White House press secretary Scott McClellan said March 10.

He said the U.A.E.'s decision reflects that country's understanding of the importance of the broader bilateral relationship.

"They have been a good partner in the war on terrorism," McClellan said, "and I think that it was clear that Congress is very much opposed to this transaction moving forward."

According to published reports, the U.S.-U.A.E. FTA negotiations have resolved most of the market access issues but still must grapple with U.A.E. restrictions on investment and financial services.

The United States and U.A.E. neighbor Oman already has concluded an FTA, which Congress is expected to consider in coming months. (See related article.)

Source: U.S. Department of State

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