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.

[justshutupandtakeit]

LoL I wondered how long it would take for the One Note Wonders to chime in with their crap. Good Job.

[jpsb]

I don't like the I've been here longer then you argument. Total BS, I could have done that to her, it means nothing.

[Jhohanna]

I guess I'm in the "red-necked, hicksville, far right-wing, xenophobic" camp for opposing open borders.

Nah, you're not. You're just reasonable and intelligent! :P

[Do not dub me shapka broham]

That's funny, because our "friends" were the ones who plunged two fully-fueled commerical jets into Towers 1 and 2 of the WTC, one into the Pentagon, and attempted to fly another into Capitol Hill.

I'd hate to see what our "enemies" would do if given the chance.

[austinaero]

You have to admit the moniker "justshutupandtakeit" has a certain ring to it. I appreciate all sides of the debate, until the smear campaigns start.

[TigersEye]

From your Business Week article:

Lawmakers who have been trying to block the deal involving DP World said they were studying the company's announcement to see if it adequately addressed their concerns about an Arab government taking over major operations at six U.S. ports.

There it is. The motivation for it all. At least BW got that right.

[bwteim]

Don't put on a tinfoil hat too quick - Warner was reading a prepared statement from DP's Edward H. Bilkey according to the news.

Take it up with Ed if it is not right.

[austinaero]

Got any vacancies in your camp?

[TigersEye]

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.

Yes, I did miss that. Link please. Got a source for that assertion?

[Flux Capacitor]

----Okay - I and apparently many other people are stupid.----

The 'Bots would have us believe that the 81% of the American public that will not automatically bown down to King George are "stupid" for refusing to extend him a two-term lease on their own thought processes.

Cults of personality are not particularly forgiving to those who question the center of their devotion. The body of Free Republic really ought to ask itself if this is what it wants to be, or if it wants to maintain some level of credibility as a meaningful conservative forums.

----But we won anyway.----

That's what's so delicious.

-Dan

[.cnI redruM]

In what way has the UAE supported the Iranian nuclear program?

[TXBSAFH]

Yes, national security trumps all.

[jveritas]

I hope you are right PD. However I have my doubt that President Bush will veto this appropriation bill for the troops where the knee jerks in Congress (unfortunately lead our GOP congressmen) inserted this Dubai Ports deal blockage in it. Do you really think that the President will go on national TV to explain why he is vetoing the bill and expose the hysteria of Congress? I doubt it but I hope you are right. People who have “mis”underestimated President Bush and pronounced his political death so many times have been thrown into their own political grave. We shall see anyway.

[Jhohanna]

That's just real rich and mature, Howlin.

[TigersEye]

From the Business Week article:

"It would have to be an American company with no links to DP World, and that would be a tremendous victory and very gratifying," said King, chairman of the House Homeland Security Committee.

And if there is still no American company that wants it?

[Cold Heat]

This move had national security in mind when it was conceived.

Much of what we do on the war on terror is not so obvious nor public.

The administration could not go public with anything that would help removed public concerns without causing problems for the UAE.

The public, with our stupid ass ed congress critters at the helm have injected themselves into something that they should never have done and at our detriment.

They have now screwed the pooch, so to speak.

This never should have happened and it is the reason these things are done in private as congress had set up to keep it out of politics.

This is essentially a national security leak and very big screw up.

I'm done with this for now, but have made plenty of mental notes as to who does not need to be in congress any longer.

I will act accordingly, and I also publicly apologize to the UAE for the stupidity of our U.S. lawmakers.

[Courdeleon02]

The sources quoted in this article are anonymous. I doubt anyone in the media really knows the reaction of the Dubai royals. I am sure they expected some opposition. Sounds like speculation to me.

[mlc9852]

My philosophy is when you have to start name-calling, you have lost the debate.

[Flux Capacitor]

----That's just real rich and mature, Howlin.----

It should be. She's been here so much longer than so many of us. ;)

-Dan

[mlc9852]

"That's what's so delicious."

LOL - true!