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.
He's made some accusations he can't or won't back up.
Frankly, I'm not in favor of divesting foreign investment from this country.
With this statement, I am surprised that it was 64-2. I want to know the names of the two appeasers.
Yep, you've got that right, except that the Peanut President made damn sure that the Shah is overthrown, thus getting us in this mess with Iran.
Nice. You clearly don't know anyone from that region or you wouldn't say such a stupid thing. Like hell they should accept that. Why don't you come out and say it? Our troops and coalition troops are fighting dying for NOTHING, right?
Who has been good partners ? The Emir ? Because that is all the UAE is. Then again, its got lots of men in the street who hate us infidels but according to you that doesn't matter.
We had all this foolishness 30 years ago when we based our relationship with Iran on one man, ignoring what the man in the street thought. Right now Egypt is our 'ally' because our relationship is with one man. Again, ignoring what the man in the street thinks. Now, we are doing it again.
FReepers who have been to Dubai have testified that there are already Christian churches there.
I care nothing for Carter. He was a fool and an incompetent. But he could not have kept the Shah in power. What do you advocate ? Sending American troops to Teheran ?
Imperial Iran had on paper very, very considerable military resources. It had the most powerful military east of Israel. If they were not enough to keep the Shah in power what the hell do you think we could have done ? If all those Iranian boys were not willing to die for their Shah what do you think we could have done ?
Thanks for the info. But the questions remain;
What documents does Duncan supposedly have?
Who wrote the supposed documents?
Who are the supposed named U.S. government agents?
Who in the UAE government supposedly turned down the agents request?
Why doesn't Hunter release the supposed documents to the public?
The Republican Chairman of the Armed Services Committee makes a statement and you say he can not or will not back it up. The Republican President makes a statement and how DARE the ignorant masses question the infinite wisdom. Do I have this correct?
Understand that I have been kicking congress real hard for their weakness. I will give credit where it is due.
I'll just take him at his word. I guess there are just some things that need to be kept from the media if at all possible.
Why? Is it because of the seriousness of the charges?
The evidence hasn't been presented.
See my post #1810.
LOL Pathetic.
I was visiting with friends this afternoon, and we were watching Kudlow on CNBC, (while arguing about the deal). Kudlow was fabulous. And one of the very few pundits who "gets" this whole deal. I'm going to try to watch him more often.
Sorry; not me; if he's out there talking about them, he needs to offer up the proof.
But you will OVERLOOK the word of Gen Franks, Gen Pace, Gen Abizaid, President Bush, the U.S. Navy and Coast Guard. Ok.
Because of my own thoughts and beliefs, which I formed prior to hearing anything from or where Hunter stood on the subject.
FreeReign, Do you realize that you are calling the Chairman of the Armed Services Committee a liar, and blindly trusting the Emir of Dubai? The world is upside down.
Well, if you're grasping at straws, you sure do!
The Republican Chairman of the Armed Services Committee makes a statement and you say he can not or will not back it up.
Was my post unclear? That's exactly what I said. He made the accusation more than once and has yet to offer a shred of evidence to back it up.
The Republican President makes a statement and how DARE the ignorant masses question the infinite wisdom.
Stupid statement, trying to draw the parallels.
If Hunter has proof, let's see it.
You've got it!!
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.