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’Change in labour law must for UAE-US FTA’

Khaleej Times | 15 October 2004

‘Change in labour law must for UAE-US FTA’


DUBAI - UAE will have to change its labour code to meet international labour laws, revise the agency law and investment / sponsorship rules in order to sign a Free Trade Agreement (FTA) with the US, according to US Trade Representative Robert Zoellick.

Official negotiations to sign the FTA between the two countries will likely to start early next year, while the agreement could be signed in 2006, the US Trade Representative said on Wednesday.

Zoellick, who visited the UAE on October 13 to discuss with the local authorities the challenges and opportunities involved in negotiating a comprehensive FTA with the US, told newsmen that the outcome of his current discussions with the UAE authorities in Abu Dhabi and Dubai will be reported to the President and the Congress of the US and discussed with the members of his Cabinet. "After that we will have a 90-day period before starting official negotiations and during these 90 days we can continue with some paperwork," he said.

Asked how long it will take to sign the agreement, he said that it depends on issues discussed and on how prepared the country is to sign a FTA. He said that in case of Bahrain it took only four-five months, but normally it takes a year. "The UAE is a very positive partner for us and it made a number of good commitments. We discussed among others labour issues, agency laws and investment rules," he said, adding that the outlook for the negotiations was very positive and encouraging. "I hope in 2005 we will start negotiations," he said.

The US recently concluded a FTA with Bahrain and signed Trade and Investment Framework Agreements (TIFA) with both UAE and Oman. The TIFAs provide a forum for the US to examine ways to expand bilateral trade and investment and can be used as a forum to launch negotiations for an FTA.

"Last year, President Bush outlined a country by country plan to achieve a Middle East Free Trade Area. With the hand of US economic partnership, the United States will embrace and encourage reformers across the region.

“The 9/11 Commission urged the United States to expand trade with the Middle East and highlighted the recently concluded FTA with Bahrain, as well as our recently passed FTA with Morocco as examples of positive steps in this direction," Zoellick said.

The President’s Middle East Free Trade Agreement (MEFTA) initiative seeks to promote free trade throughout the region and between the region and the US.

The US recognises the differing levels of development across the region and is taking a graduated step-by-step approach to creating a free trade area with countries interested and willing to open their economies and liberalise their trade regimes. US exports to the UAE last year amounted to $3.5 billion, including machinery, aircraft, vehicles, electrical machinery and optic and medical instruments. Agricultural exports totalled $259 million.

US goods imports from the UAE last year were $1.1 billion, including mineral fuel, woven apparel, repaired products, precious stones and knit apparel.

 source: Khaleej Times