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.
Not quite.
The president is the CIC in the WOT. You left that part out.
You list Hunters credentials in this manner but you don't mention the president's credentials.
Are you trying to be objective?
Two dissenting votes:
Jim Kolbe (R) AZ
Jim Moran (D) VA
I hope nobody is counting on upsetting Chuckie Schmucky's apple cart. When asked about Halliburton taking this deal he said, and I quote; "I have no problem with that." He's learned some triangulation of his own. The Dems have duped the GOP into committing sepaku.
Then, again, why does he not demand that any and all U.S. assets be removed from the UAE?
Why is Duncan worried about safety at OUR posts, where the U.S. Customs is in charge, and NOT worried about the UAE ports?
The presidents words contradict Hunter's words.
But you'll take Hunter's word for it.
Yes I do. I am afraid that you do not, however.
I actually heard that today; I had an out of body experience just for a second.
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.
Son, it doesn't logically follow that one is calling somebody a liar, when they ask them for evidence. (Only a nonobjective person or a dope would think such).
But using your false logic I will now point out to you that you are calling the CIC in the WOT a liar.
You're upside down.
Or dates. Also, on another occasion, he phrased it as "could be used for nuclear triggers." Also, the heavy water he cites, by his own say-so, went to India. They already have nuke-everything. Why should I give a rats heiney if India gets some heavy water?
Bingo!
The last that I heard from the President was that he did not know too much about the transaction.
But you'll take Hunter's word for it.
I'll put it this way. Hunter and I are in agreeance on this.
Like...try not to further destabilize the region...
Thats yet to be seen.
Because this whole thing is not an "all or nothing" proposition. The UAE does it risk-benefit analysis, we do ours. Nobody got gut-checked, and the divestiture is not going to close port operations and lead to global chaos. It was business hardball and some congresscritters expended political capital. President Bush actually comes out pretty well, and HClinton has not said "Boo" today.
You're right; and thanks for taking the time to contact your legislator about this.
Be specific. What are you talking about ?
LOL
They have management of a fair amount of our assets in this country and it's never been a problem until a few democrats tried to play games, again, and stupid Republicans fell for it.
What is NOT yet to be seen is that you are taking Duncan Hunter's "word" over that of those on the ground and in charge.
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