U.S. trade officials said on Friday they would not finish free trade talks with the United Arab Emirates by a deadline at the end of this month, but would continue to pursue closer economic ties.
“Negotiations [on the free trade agreement] will resume at a later date,” Gretchen Hamel, a spokeswoman for the U.S. Trade Representative’s office, said, without providing any indication when that would be.
A second U.S. trade official, speaking on condition he not be identified, said the two countries had decided after extensive consultations that they would not be able to finish the free trade talks in time.
“Both sides remain committed to completing the FTA and we do expect to resume those negotiations at a later time,” the trade official said.
Negotiations over the past year have focused on a few remaining core areas of the proposed free trade agreement, particularly relating to the investment chapter.
“We’ve been working very hard to resolve those issues, but we have not been able to achieve any significant breakthroughs,” the official said.
As recently as January, the U.S. Trade Representative’s office had said there was still some hope for a deal by March 31, even though negotiations were damaged last year by a political furor over state-owned Dubai Ports World’s purchase of U.S. port operations.
Dubai is one of the seven emirates that make up the UAE in a loose federation.
DPW agreed to sell the port operations to soothe U.S. congressional concerns, but the free trade talks remained on the back burner for most of 2006.
The White House’s trade promotion authority expires at the end of June. That legislation requires Congress to vote ‘yes’ or ‘no’ on trade deals negotiated by the White House without making any changes.
The law also requires the White House to give Congress 90 days notice before signing any agreement, making early April the effective deadline for the United States to strike a deal with the UAE under current authority.
U.S. and UAE officials will meet in coming months to build on progress they have made in areas such as intellectual property rights protection, e-commerce and customs, without formally restarting negotiations.
The U.S. trade official said it was an “open question” whether the sides would resume negotiations if Congress does not renew trade promotion authority when it expires.
The United States began talks with the Gulf Arab state in March 2005, about the same time as it launched more successful negotiations with UAE’s neighbor, Oman.
Congress approved the pact with Oman last year.
Trade between the United States and UAE amounted to $12.3 billion in 2006, making it the third-largest U.S. trading partner in the Middle East behind Israel and Saudi Arabia.
The United States imports relatively little from the UAE, but major items include crude oil, chemicals, aluminum and clothing. Leading U.S. exports to the UAE include aircraft, drilling equipment, industrial engines and farm goods.
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