IV. POLITICAL ENVIRONMENT

A. Nature of Bilateral Relationship with the United States

Relations between the U.A.E. and the United States are friendly and strong.
The two countries have similar viewpoints on most issues of international
concern.  The U.A.E. supports the Arab-Israeli peace process and joined US in
sending peacekeeping troops to Somalia in 1993.  The U.A.E. is firm on
upholding U.N. Security Council sanctions against Iraq.  The U.S. has made a
number of military sales to the U.A.E., and U.S. naval vessels call at ports
in the U.A.E. more frequently than in any other country in the world.







B. Major Political Issues affecting Business Climate

The U.A.E., especially Dubai, has considerable trade with Iran.  At the same
time, there is an ongoing dispute between the U.A.E. and Iran over three
islands in the Gulf (Abu Musa and the Greater and Lesser Tumbs).  The U.A.E.,
as a member of the Arab League, still maintains some aspects of the Arab
Boycott of Israel.


C. Brief Synopsis of Political System, Schedule for Elections
    and Orientation of Major Political Parties

The U.A.E. is a federation of seven emirates.  Each emirate retains a high
degree of autonomy within the federal system.  The President of the U.A.E. is
chosen by the Supreme Council, which is composed of the rulers of the seven
emirates.  Abu Dhabi Ruler, Shaykh Zayed Bin Sultan Al Nahyan has been
President of the U.A.E. since the country's foundation in 1971.  In addition
to the Supreme Council, the federal structure includes a Council of Ministers,
a Federal Judiciary, and the Federal National Council (FNC), which consists of
40 members representing the seven emirates proportionally.  The FNC does not
have the power to legislate, but it can summon ministers and it performs an
oversight function.  There are no political parties or elections in the
U.A.E..