MANAMA, 6 February 2007 — Talks on free trade agreement (FTA) between the UAE and US are at a intense, difficult, and complex stage, according to US Commerce Deputy Secretary David A. Sampson.
“An FTA agreement with the US represents a gold standard of free trade agreements and it is not uncommon there to be very intense, often very difficult, very complex negotiations and that is the stage where we are with the UAE,” Sampson said during a press conference here yesterday.
Sampson downplayed the impact of last year’s failed deal to have the UAE-based company Dubai Ports World run some key US seaports, after Congress and some New York legislators opposed it.
He pointed out that the case was influenced by several factors involving port security issues, the fact that it was an elections year, and lapses in communication about the transaction before it reached the concerned bodies.
US President George Bush had defended the deal and threatened to veto any bill to hold up the agreement. He even asked the lawmakers who blocked the deal for an explanation why a Middle Eastern company is held under a different standard.
“The Dubai Ports World transaction was an anomaly and does not reflect how open the US is to direct foreign investment,” Sampson said. “The US remains the most open economy in the world to direct investment,” he pointed out.
UAE-US FTA talks over the past two years had been delayed by US political demands for the opening of the oil sector, lifting barriers to US products and allowing 100 percent ownership for US companies in UAE-based businesses.
The UAE had in the past said that that it would not make any political concessions to sign an FTA with Washington.
Bahrain was the first Gulf state to sign an FTA agreement with the US while the Omani government is expected to finalize its compliance process this year after the agreement was approved by both sides.
“We are here to encourage Bahrain to take advantage of the FTA very early on,” he said. “What we have seen with the previous FTA agreements is that not only does trade increase between the US and the partner with whom we sign, but the partner country typically sees a significant increase in their trade relations with other countries as well.”
Sampson noted that US-Bahrain total annual trade through November 2006 surpassed $1 billion, marking the first time where trade between the two countries tops that amount. Textiles and aluminum make the bulk of Bahraini exports to the US.
Sampson also said that Bahrain was becoming a gateway for US companies to the region that already established a presence here, underlining the new multimillion dollar Kraft Foods plant which will export products to the region, as an example.
According to recent US Commerce Department data, Bahraini exports to the US rose 46 percent through November 2006, reaching nearly $600 million while US exports to Bahrain rose 42 percent to nearly $500 million.
Sampson added that the FTA agreements, in addition to their economic benefits, continue to lead US efforts to bring peace and stability to the region.
“The real long lasting answer to building peace and stability in this region is through creating a more hopeful future economically where parents have real optimism that there children will have a better future than they have,” Sampson said. “To achieve that, we need to build a growing economy. The average unemployment rate in the region is 14 or 15 percent and most projections suggest that over the next 20 years there will be a significant increase in the available workforce in the region.”