Dubai threat to hit back (UAE Threatens Against Boeing and US Bases Support)

The Hill.com ^ | March 9, 2006 | Roxana Tiron

[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 World’s acquisition of Britain’s 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 Dubai’s royal family are furious at the hostility both Republicans and Democrats on Capitol Hill have shown toward the deal.

“They’re saying, ‘All we’ve done for you guys, all our purchases, we’ll stop it, we’ll 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 Dubai’s 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 Boeing’s 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 Boeing’s 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 Boeing’s Apache helicopters. Meanwhile, Boeing has been in talks with the emirates to try to sell its AWACS planes.

An industry official with knowledge of Boeing’s 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, Boeing’s 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. Boeing’s 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 don’t 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 I’d not care to quantify that, because I don’t 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.

[Do not dub me shapka broham]

The only people to blame for a Dem. tsunami are the Republicans.

However, I don't think that American voters are going to punish congressmen who actually stood up for this country.

If so, then it'll probably be because the Republican Party has become inescapably tied to-almost synonymous with, in some cases-the Bush administration over the past five years.

A huge mistake, in my opinion.

[TigersEye]

Well, news is coming out now that the UAE will sell its interests to an American entity.

Actually the UAE did not specify an American entity. They simply said the American portion of the deal would be divested to 'another party.' You may have read otherwise in an AP report or heard it on ABCNNCBS or somthing but it ain't true.

[Howlin]

Oh, geez, I'm sooooooooooooo worried about what you think.

[Flux Capacitor]

----Watching the GOP trying to out-Dim the Dims while shooting our strategic alliances in the foot is pretty sad. Though not my custom, I have to give Bush full credit here for trying to save a vital strategic and military interest over the congressional lynch mob.----

Imagine my surprise to find a poster named "George W. Bush" backing George W. Bush on this, and assuming all of the mindless intellectual contortions and outright attacks on the American people themselves that come with doing so. Almost as shocking as posters with "W Fan" in their usernames going to bat for him. ;)

So much for the conservative movement being one of ideas and not men.

-Dan

[justshutupandtakeit]

Stupidity and cowardice are not limited to the Party of Treason.

[Jhohanna]

They shut down the ring and better enforced their existing law against it. Apparently we were satisfied with the results. Yes, I do know what they do to camel jockeys.

Yah... right. K. Just like Iran wasn't doing nuclear enrichment down south. You expect me to believe these monsters? That rape for power? Uh, no.

And I'm sorry, but that is the mentality of the majority of Arab men. I happen to be married to someone who spent quite a bit of time over there, as well as call both an Iranian and Iraqi very close friends. They are happy their parents left when they were young, and were Christian. It's a LOT uglier over there than we will EVER disclose. Iraq is a cakewalk.

[Crawdad]

Don't go looking for something you're not going to be glad you found.

[ohioWfan]

It's actually the conservatives, as opposed to the "Bush always knows best"-types who raised the uproar over this.

You clearly weren't paying attention.

The Dems raised the ruckus first and the Republicans joined forces with them......or shall we say, tried to out-do them. The self-proclaimed 'grassroots' folks are always complaining, whining (and in this case shrieking) about everything. They have no power at all, in this, or in anything else.

[jpsb]

"You'll have to pardon me, as I have been here seven years longer than you have."

First the race card and now the newbe card LOL, you are on a roll. Got a real argument?

[ohioWfan]

Yikes. It IS kinda scary, isn't it? ;)

[FourtySeven]

The American interest will have a UAE interest? So the UAE will be selling to itself? That makes no sense.

Believe me, I'd like to believe you. I'd like to believe that despite all the hysterical maniacs both here and on Capital Hill, the deal will go through anyway and the UAE will get what it wants. I just don't see how that's going to happen. At least not today.

What I can't understand is, to this day, why people are so convinced that the UAE is some terrorist state? I just saw a program on the National Geographic Channel last night about how Dubai is building a huge artificial island, and it's purpose is to increase its beach size by 39%. It's a freaking tourist state that has no interest in being terrorist for goodness sake, or do people here think they're spending $2 BILLION on a ruse? (and note, construction of the island began BEFORE 9/11, so all these claims about Dubai "turning into a friendly state only after 9/11" are ludicrous.)

The terrorists in the ME may have a lot of money, but they don't have that much. $2 billion here, $6.8 billion there, it starts to add up after a while.

Before I log off for the day, after watching this thread for a while, I'd like to add this: I think the opposition to the port deal IS based in racism, and I'm in SUPPORT of the idea of a fence blocking our southern border!

Chew on that.

[bwteim]

"DP World has decided to transfer fully the U.S. operation of P&O Operations North America to a United States entity,"

http://www.businessweek.com/ap/financialnews/D8G88KUO2.htm?campaign_id=apn_home_down&chan=db

[justshutupandtakeit]

Yes and the insanity it released has only increased.

[teawithmisswilliams]

In case you missed it; it was the Dems (Schumer) who started this.

You missed the fact that it was the conservative grass-roots who started this. Schumer jumped on it when it became visible on the politcal radar screen.

[Peach]

Yup. They think they OWN the GOP now.

[Jhohanna]

Florida had financial institutions which aided their ability to move funds within this country and to receive funds from their terror bosses abroad.

The reason that they have these abilities is because of the large number of immigrants (legal and ILlegal) that transfer money back out of the US to their homelands. Be that the Middle East, Cuba, or Guatemala. California is the same way, but a lot more of that money is sent also to India, China, and Pakistan (H1B workers). That's why taxing and changing the international financial transaction biz is going to be so difficult, because it will affect both the illegals and LEGAL immigrants, and that's not an option.

[justshutupandtakeit]

One has to be deluded to take a Clown like that seriously.
But cults are not to be ignored.

[Jhohanna]

Yeah... isn't the race card kinda becoming like the Hitler argument?

[Star Traveler]

You said -- "I just think people are building up UAE to be indispensible, and they're simply not."

Well, maybe not indispensible -- but important.

When you design a plan that you want to carry out, and something throws a monkey-wrench into it, then it's troublesome. And many times it takes much more effort, time and money to compensate for the change in plans.

I would look at it that way. We might be able to get along without the UAE, but then it's going to be troublesome, take more effort, time and money -- to compensate for their loss in the grand plan or scheme (as it pertains to this "war on terror").

Sometimes it's a lot better to give on some smaller things in the beginning, than to go far down the wrong path and try and dig your way out -- later on.

That's how I would see it.

In any case, I think this port deal political hot potato is going to die off slowly now -- with the UAE saying that they're going to sell to an American interest. That's diffused everything, almost immediately.

Regards,
Star Traveler