Posted on 03/09/2006 9:02:17 AM PST by prairiebreeze
Dubai is threatening retaliation against American strategic and commercial interests if Washington blocks its $6.8 billion takeover of operations at several U.S. ports.
As the House Appropriations Committee yesterday marked up legislation to kill Dubai Ports Worlds acquisition of Britains Peninsular and Oriental Steam Navigation (P&O), the emirate let it be known that it is preparing to hit back hard if necessary.
A source close to the deal said members of Dubais royal family are furious at the hostility both Republicans and Democrats on Capitol Hill have shown toward the deal.
Theyre saying, All weve done for you guys, all our purchases, well stop it, well just yank it, the source said.
Retaliation from the emirate could come against lucrative deals with aircraft maker Boeing and by curtailing the docking of hundreds of American ships, including U.S. Navy ships, each year at its port in the United Arab Emirates (UAE), the source added.
It is not clear how much of Dubais behind-the-scenes anger would be followed up by action, but Boeing has been made aware of the threat and is already reportedly lobbying to save the ports deal.
The Emirates Group airline will decide later this year whether it will buy Boeings new 787 Dreamliner or its competitor, Airbus A350. The airline last fall placed an order worth $9.7 billion for 42 Boeing 777 aircraft, making Dubai Boeings largest 777 customer.
Dubai in mid-February also established the Dubai Aerospace Enterprise, a $15 billion investment to create a company that will lease planes, develop airports and make aircraft parts to tap into growing demand for air travel in the Middle East and Asia.
The family-ruled sheikhdom may buy as many as 50 wide-body aircraft from Boeing and Airbus during the next four years, according to Aerospace Enterprise officials.
The UAE military also bought Boeings Apache helicopters. Meanwhile, Boeing has been in talks with the emirates to try to sell its AWACS planes.
An industry official with knowledge of Boeings contracts with Dubai said that the company has been involved in the emirate and that it would take a lot to knock those relationships.
Nothing about the [ports] controversy diminishes our commitment to the region, said John Dern, Boeings corporate spokesman. He added that at this point the company has no indication that there is or will be an impact on the company.
Any repercussion to Boeing could put House Speaker Dennis Hastert (R-Ill.) in a delicate position. Boeings decision to move its headquarters to Chicago has been seen as calculated to facilitate a close relationship with Hastert. He is against the ports deal, and his office did not return calls by press time.
Several businesses have expressed concern that the controversy over the $6.8 billion ports deal could damage trade with the UAE. Dubai is one of the seven emirates. The United States and the UAE are meeting next week for a fourth round of talks to sign a free-trade agreement. The American Business Group of Abu Dhabi, which has no affiliation with the U.S. government, said that Arabs may hesitate to invest into the United States, according to a report by Reuters.
A Republican trade lobbyist said that because the ports deal is a national-security issue blocking it would not be in violation of World Trade Agreement rules.
In terms of them retaliating legally against the U.S. I dont think there are many options there, the lobbyist said.
But when it comes to the emirates cooperation in the war on terrorism and in intelligence gathering, there is concern that some help may be pulled.
If we reject the company in terms of doing the [ports] work, they are going to lose a lot of face. In the Arab culture, losing face is a big deal, a former government official said. We risk losing that help. It is not an empty threat.
Dubai is a critical logistics hub for the U.S. Navy and a popular relaxation destination for troops fighting in the Middle East. On many occasions since the ports story erupted, the Pentagon has stressed the importance of the U.S-UAE relationship.
Last year, the U.S. Navy docked 590 supply vessels in Dubai, plus 56 warships, Gordon England, deputy secretary of defense, said in a Senate hearing last month. About 77,000 military personnel went on leave in the UAE last year, he added.
During the hearing, he warned about the implications of a negative decision on the ports deal: So obviously it would have some effect on us, and Id not care to quantify that, because I dont have the facts to quantify it. It would certainly have an effect on us.
Although owned by the Dubai government, the company at the heart of this controversy, Dubai Ports World, is trying to distance itself from any kinds of threats, said a lobbyist closely tracking the deal.
Another lobbyist monitoring the controversy said K Street still believes there will be a compromise that allows the Dubai deal to go through while meeting congressional security concerns, even though a bill aimed at that result, put forward by House Homeland Security Committee Chairman Peter King (R-N.Y.), was widely repudiated amongst lawmakers Tuesday.
Senate leaders have indicated that they would wait to take action until the new 45-day Committee on Foreign Investment in the United States (CFIUS) review is completed.
Meanwhile, in London, DP World cleared the last hurdle for its take over of P&O. The Court of Appeal in London refused Miami-based Eller & Co., which opposed the deal, permission to appeal against clearances for the legal and financial measures necessary to implement the takeover.
P&O said it expects to file the requisite court orders, making the takeover terms binding on DP World, according to the Financial Times.
Elana Schor contributed to this report.
You asked -- "What new quid pro quo?"
Well, news is coming out now that the UAE will sell its interests to an American entity.
So, the way it's gone was -- at first Bush tried the 45-day delay deal. He convinced the UAE to present that on its own side. They did. But, that only gave time for the crazy Democrats to gather forces and hollar louder. And now they want to shut it totally down (by a bill in Congress).
Bush's next move was to get the UAE to say that they would sell their interests (as far as I gather now) to an American interest. I'll bet the "American interest" has a "UAE" portion too.
Thus, this is the new "quid pro quo" to preserve all the previous ones. Who knows what was promised behind the scenes. I guess we'll find out in a few months or few years.
In any case, the deal will go through now.
Regards,
Star Traveler
I have to correct myself. They weren't forced to play the race card, but once it came out they took to it like fish to water.
The UAE would have just implemented their sanctions for the US backing out of supporting an essentially 'done deal' and the willingness of the Congress to squelch it without the normal 45 day review period.
Bush will veto the measure, to save our relationship with the UAE, and to give some of the dipsh!ts on the Hill time for their staffers to find a map.
Otherwise, I expect I can buy a new Van, 'cause the next few years are going to see some really high oil prices when Iran makes its move, and I'll be assured steady work right here at home.
That is a complete misrepresentation of what has happened.
It's not my fault your own posts make you easy to spot.
Perhaps you are right. But, we have warships visiting there, we have UAE Special Forces working with us in Afghanistan. They are trying to transform their country, sounds like me. Our military seems to trust them. Why shouldn't we work with them?
I mean, we can just say screw them all forever, and I understand that. But what if we could really help one of them to change?
I try. Sometimes I just have too damn much in my head to make sense of it. :P
You can try to paint it what ever color you like, but in the end the isolationist ideals wreak havoc to any country that employs these policies.
now lets exchange the word "isolationist" to "nationalist"
Let's just all go so global that the USA is owned by every country in the world. Agenda 21 anyone?
I guess you haven't heard: The Democrats are DEMANDING an up or down vote, no matter what.
Anything to shut down the dialogue and maintain their power. After reading these threads for the last couple of weeks, I guess I'm in the "red-necked, hicksville, far right-wing, xenophobic" camp for opposing open borders. Who would have known such accusations would come from so-called conservatives?
That seems to be the mantra of the unwavering Bush acolytes.
Because the public doesn't want it.
Got any sources to back that up? Or do you really mean that big business and the corrupt Mexican elite don't want it?
In case you missed it; it was the Dems (Schumer) who started this.
They don't need any incentive from us to continue to help them.
I do oppose illegal immigration; and I do think this ports deal was a tremendously stupid idea, though people did stand to make money off of it.
And you calling me a racist for those opinions reveals far more about you than it does me.
Well they need a few laughs to brighten up their dismal life. Unfortunately the chances of a GOP disaster in the fall has escalated tremendously because of this craven cowardice.
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