WASHINGTON (Reuters) – The United States and the United Arab Emirates still hope to reach a free trade agreement and plan to resume talks whenever the White House wins new “fast-track” trade negotiating authority, officials from both countries said on Monday.
“We are committed on both sides” to concluding a deal, UAE Economy Minister Sheikha Lubna Al-Qassimi said in a speech at the U.S. Chamber of Commerce. “I do believe it’s solvable,” she added, referring to a disagreement over investment provisions that has held up the pact.
Sheikha Lubna spoke to the business group just one day after U.S. oil services firm Halliburton Co. announced it was moving its headquarters and chief executive to Dubai, one of the seven emirates that comprise the UAE.
She told reporters after the speech the UAE did not have a specific strategy of wooing oil services firms but was eager for all forms of foreign investment to generate growth. Last year, the country attracted between $12 billion to $16 billion worth of foreign direct investment, she said.
Halliburton’s decision to relocate its headquarters to Dubai comes one year after state-owned Dubai Ports World’s purchase of some U.S. port operations triggered a political firestorm in the United States. DPW later agreed to sell the port operations to soothe U.S. congressional concerns.
The United States began free trade talks with the UAE two years ago, about the same time it began negotiations with another Gulf Arab country, Oman, that has already led to a deal that has been approved by Congress.
“This remains a very important priority for both governments,” Shaun Donnelly, assistant U.S. trade representative for Europe and Middle East, told the same business group. “We sort of ran out of time, as you know, under our trade promotion authority.”
That legislation, also known as fast-track, requires Congress to approve or reject free trade agreements negotiated by the White House without making any changes. It expires at the end of the June, but the White House has to notify Congress of deals it plans to sign by the end of March.
The Bush administration has asked Congress to renew trade promotion authority, but it’s not clear how quickly that will happen and what changes lawmakers will make to the law.
One difficulty in the free trade talks is the UAE has “obviously had great success” in attracting foreign investment without a U.S. free trade pact, Donnelly said.
But from the U.S. point of view, there are caps on foreign investment in certain sectors that it wants to have removed as part of any deal, Donnelly said.
“I don’t think this is an unsolvable problem, but it is one we weren’t able to close on,” he said.
The United States shipped $11.9 billion of goods to the UAE in 2006, making it the number one U.S. export destination in the Middle East. Leading products include aircraft, drilling equipment, industrial engines and farm goods.