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 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.
I misspoke; that is not acceptable to the anti-immigration crowd on FR.
Thank you, thank you. Oh I don't know who to thank! There were just so many people who had to play along and/or get fooled to make this happen. I guess I would like to thank IGNORANCE first and foremost. Because without ignorance, this would have never been possible. Thank you ignorance!
*applause*
Why? Well, I will tell you why. This was a political loser for the left, and had it gone through the 45 day investigatory process, you, me, and everyone else paying attention to this port deal story would have learned of the TRUTH and the FACTS, and it would not have been seen through the prism of alarmist hysteria.
The Democrats and their unions were panicking.
Iraq and Afghanistan are not 'allies'.
The Kurds need us because they are surrounded by enemies and we can keep the Turks off their backs. The Shiites find us temporarily useful. The Sunnis now think they can get us to protect them if there is an Iraqi Civil War.
And as for Afghanistan the Pashtuns were the Talibans key supporters but the others support Karzai to a point to keep the Pashtuns from taking over again.
Where you fail and fail foolishly is to misunderstand that every Muslim country is an ethnic balancing act among several groups. When we intervene in a Muslim country we disrupt the ethnic pecking order and find ourselves sucked into the civil war that follows. Like in Lebanon where we found ourselves against the Druse and Shiites supporting a Maronite government. Or in Afghanistan where its the Haziris and Dari against the Pashtuns. And alliances shift around easily. The Maronites discarded us and made peace with Syria. And al-Sadr, the emerging Shiite leader, is hardly an ally of America. We are a new card in an old game of intrigue and imagining that any ethnic group is our 'ally' is the height of idiocy.
No kidding! I wonder also how many union people were calling Republicans to kill this deal.
Answer this question, which I've already posed to you:
Would the WOT (and therefore the U.S.) be better served by A) an alliance with the UAE or B)not having the UAE as an ally. A or B?
ROFLMAO! Well done!
I'm sure they had a hotline to that bozo Jerry Lewis. (R-CA).
"We have ample reason to fear the muslims. However, that being said unless we are prepared to commit genocide and kill every single muslim in the world we are going to need a way to bring them out of the dark ages. I can't think of a better way than doing business with them and bringing them the benefits of modernity. Eventually a society that enjoys the benefits of a civilized, modern society will become peaceful."
I would like to go on record that I don't 'fear' Muslims. I don't have a deep resevoir of trust in them, that's certain, and I would not turn my back on them, but I don't fear them.
I thought the rest of the post, on the surface, presented a somewhat condescending or patronizing view-
I don't think that's how you meant to portray yourself, however, and I wonder if I am correct in that assumption.
And as I have said, there is no alliance. There never was. Nor could there ever be. It is just a deal with the Emir of Dubai for his own financial purposes. Not an alliance with a nation.
We have no more 'alliance' with UAE than we had with Imperial Iran. Will you ever learn anything about that part of the world or will you always be this simpleminded ?
Yes, it's an interesting blog. I read his comments on Iran with interest. And uneasiness...
The Democrats are still pushing this issue even after Dubai agreed to sell the contracts to a US company. They are now the part of port security....give me a break!
No thanks, that's something you professional knee padders do best, why would I involve myself in your personal affairs? Blackbird.
Like I said, it's a polticial issue, and the Democrats are going to milk it like a holstein.
Sam, is that open for vote? Blackbird.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.