VZCZCXRO9294
OO RUEHDE
DE RUEHAD #0849/01 0651350
ZNY CCCCC ZZH
O 061350Z MAR 06
FM AMEMBASSY ABU DHABI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3811
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 000849 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR NEA, NEA/ARPI, EB/TPP/BTA, NEA/RA 
STATE PASS USTR FOR AUSTR DONNELLY 
COMMERCE FOR U/S MCCORMICK 
 
E.O. 12958: DECL: 03/06/2016 
TAGS: KBCT KMPI ETRD IS AE
SUBJECT: SHEIKHA LUBNA ON PRIMARY BOYCOT AND FTA ISSUES 
 
REF: ABU DHABI 730 
 
Classified By: Ambassador Michele J. Sison for reasons 1.4 (b and d). 
 
 
¶1. (U) This is an action request.  Please see para 8. 
 
¶2. (C) Summary: On March 5, in response to a question from 
CNN's Wolf Blitzer, Minister of Economy Sheikha Lubna 
Al-Qasimi agreed that the UAE would lift its Arab League 
primary boycott of Israel if the UAE had an FTA with the 
U.S..  It is unclear whether she exceeded her "talking 
points."  In fact, this statement would be a significant 
advance on what she told USDOC U/S McCormick and Ambassador 
in a earlier joint Foreign Minister/Economic Minister meeting 
with BIS U/S McCormick, where she only committed to resolving 
remaining problems with the secondary and tertiary aspects of 
the boycott.  Also on March 6, Ministry of Economy A/US for 
International Cooperation sent DoC/BIS draft boycott language 
in an effort to comply with U.S. anti-boycott regulations. 
Sheikha Lubna explained that the current DP World controversy 
only reinforced the UAE's concerns about dispute settlement 
provisions in the FTA, the need to receive assurances about 
security of assets, and the need to protect natural 
resources.  End summary. 
 
¶3. (U)  During a March 5 CNN news "Late Edition" interview 
with MinEcon Sheikha Lubna Al-Qasimi on DP World's purchase 
of P&O's U.S. operation, Wolf Blitzer asked about the UAE's 
adherence 4QQD boycott, which affect U.S. companies, and 
noted that the UAE does not implement this aspect of the 
boycott.  In regard to the primary boycott (i.e., trade with 
Israel) she added "in the framework of the FTA at the moment, 
basically part of the process is actually lifting the ban." 
Blitzer asked whether the UAE would eliminate the boycott of 
Israel if it had an FTA with the U.S.  Sheikha Lubna replied 
"Absolutely, yes." 
 
¶4. (U) Blitzer recounted his interview with DP World CEO 
Mohamed Sharaf, who stated that DP World was dealing with 
Israeli companies and that ZIM, the largest Israeli shipping 
company, called at Dubai and other DP World managed ports. 
Blitzer asked, therefore, why the UAE didn't lift the boycott 
immediately, since DP World was already trading with Israel. 
Sheikha Lubna responded that lifting the boycott was a 
"process" the UAE needed to go through. 
 
¶5. (SBU) Earlier that day, in response to BIS Under Secretary 
David McCormick's urging to eliminate remaining secondary and 
tertiary boycott requests, Sheikha Lubna said that the UAE's 
goal was to resolve these remaining problems.  MinEcon A/US 
for International Cooperation Abdullah Al-Saleh said that 
after the February 18 DOC/State anti-boycott visit, the 
Ministry had prepared draft language that it believed would 
meet both U.S. and UAE regulations, and he was preparing to 
send this language to the USG for comment.  U/S McCormick 
offered continued technical assistance to assist the UAE in 
complying with the U.S. anti-boycott regulations. (Note: 
Later that day, Al-Saleh sent a copy of the UAEG's proposed 
draft language to DoC/BIS, Econchief, and NEA/RA, with a 
request that the language be reviewed.  If the language 
complies with U.S. regulations, the UAEG will begin 
implementing it immediately.  Econchief has forwarded the 
e-mail to Desk and USTR.  End Note.) 
 
¶6. (C) After UAE Foreign Minister Sheikh Abdullah bin Zayed 
Al-Nahyan (AbZ) joined the meeting with U/S McCormick, 
Sheikha Lubna explained that, in response to the DP World/P&O 
controversy, the UAE private sector was questioning the UAE's 
decision to negotiate an FTA with the United States.  She 
claimed they are questioning why the UAE should open up its 
markets, since the UAE's investments in the U.S. may be 
blocked.  She noted that a U.S. company (Eller and Company) 
had already filed suit to block DP World's purchase of P&O 
and noted that the DP World controversy only reinforced the 
UAE's concerns about "dispute settlement" provisions in the 
FTA and desire for a "comfort letter" on security of assets. 
She stated that the UAE was waiting for USTR to present it 
with a "promised" OFAC comfort letter on security of assets 
and needed to receive the letter before the March 13 start of 
the 5th round.  Lubna also said that the UAE was not getting 
"the right message" from USTR, especially on the UAE's 
critical concern about natural resources.  She said that she 
understood the U.S. Congressional argument about protecting a 
sensitive national security asset (ports), because it was the 
 
ABU DHABI 00000849  002 OF 002 
 
 
same argument that the UAE was using to protect natural 
resources.  She worried, however, that proposed legislation 
restricting investment could discourage foreign direct 
investment in the U.S. by raising barriers to entry. 
 
¶7. (C) Comment:  Sheikha Lubna's statement to CNN--that 
appears to commit to eliminate the primary boycott of Israel 
in the context of a U.S.-UAE FTA--represents a significant 
step forward from previous UAE commitments.  Her comments 
were in response to Blitzer's question, and it is unclear 
whether she exceeded her mandate or has the approval of the 
UAE's leadership to lift the primary boycott (if there is an 
FTA).  Her ministry's efforts to ensure that the UAEG's 
boycott language (on the secondary and tertiary boycott) 
comply with U.S. regulations does reflect UAEG policy.  The 
Commerce/State team met with Al-Saleh on February 18 to 
discuss language that the legal requirements of both the UAE 
and the U.S. (reftel). The DP World controversy has 
strengthened the UAEG's concerns about security of assets, 
protecting oil/gas, and dispute settlement provisions.  End 
Comment. 
 
¶8. (SBU) Action Request.  Post has contacted USTR to try and 
facilitate getting the OFAC comfort letter to the UAE before 
the March 13 start of the next round of negotiations.  Please 
follow up with USTR and -- if necessary -- OFAC on this 
issue.  End Action request. 
SISON