RESTRICTED 61 0.1. No.707 (1141762) Commercial Secretariat, British Embassy, P.0. Box 300, Kuwait. June 20, 1962. When I was in Abu Dhabi early in May, we discussed at some length the question of local agents. The difficulties were: - a) We want to stop a flood of foreign merchants setting up shop on their own in Abu Dhabi, cornering the bulk of the trade in their own hands, and taking advantage of the lack of local experienced merchants to avoid sharing their trade with local nationals; b) There are only about five Abu Dhabi merchants, nationals of the State (and one or two Indian establishments which have been there some twenty or thirty years who virtually belongi), who have the means and experience to run a small business and take on foreign agencies; c) The Shaikh of Abu Dhabi, Shaikh Shakhbut, has been accustomed to charge a high percentage fee to local merchants who hold foreign agencies and partnerships. This has been a deterrent to local enterprise and has eaten up meagre profits; a) Because of the foregoing local merchants have been unable to take advantage or the advent of British and other firms and of the substantial local purchase placed by the oil companies; e) Similarly, British (and other) companies and trading houses have not been able to get local merchants as their agents and partners. 3. I met Shaikh Shakhbut on May 3, together with the Political Agent and the Arab Commercial Assistant. I explained firstly that it was our commercial policy to encourage and co-operate with local commercial enterprise as far as possible so that the business and commercial association on both sides would grow and expand concurrently to their mutual benefit. We definitely did not want a situation where the foreign trader established himself independently and deprived the national Abu Dhabi merchant of business in his own country and of the means of gaining experience. I then referred to the difficulties in paragraph 2 above and said that it was necessary that foreign (i.e. British, but the same principle should apply to others) merchants should be free to appoint local merchants as their agents or form partnerships or associations with them and also that no special fees should be /levied G. L. Hobbs, Esq., Commercial Relations & Exports Department, Board of Trade, Horse Guards Avenue, LONDON, S.W.1. RESTRICTED
