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.
Oh, I see; airport terminals are fine, just not terminals?
Remind me, did the 9-11 hijackers sail ships into the WTC?
Duncan Hunter gets better intel than the President? Hmmmmm.
http://varifrank.com/archives/2006/02/thank_you_for_f_1.php
So, let me get this straight - While the entire US political-wonk class is frothing out the mouth over the sale of "port dock concessions to the United Arab Emirates" in a fashion I havent seen since the great "Flouride Wars of the 1950's", it turns out that "Emirates Air" and its subsidiary "Emirates Sky Cargo" has Passenger and Cargo Terminal Space at JFK.
Precisely.
The relationship of the Emir is business. Not alliance. Business. Then again, for many of his people it is hatred. And that is the problem.
It is a symbiosis of their corrupt elites with our corrupt elites. Every now and then, the man in the street breaks through and upsets the elite deals.
"I have no problem with a well-regulated guest worker program."
I agree. Guess who is flocking to New Orleans to do the rebuilding? The people that left? Uhhh...no.
If you can't make a point without putting words in my mouth don't bother. You might post something of substance to back up your claims too. Plenty has been posted about the friendlyness the UAE extends to our servicemen/women. Some of them FReepers.
Are you going to answer my #1804?
I knew there was something there that I liked ; )
And my answer to your question is no- I agree with you.
Thank you. If you're overcome by the urge to bitch slap him, blame it on me.
So you are admitting that it was never about national security. Just hardball business. Further, the security of our troops doesn't even register on the radar!?
Churchill said that the Arab was "either at your throat or at your feet", maybe we need to add "or in your pocketbook"...
Fear and despair is what changes the political culture of a society. Humiliation is what destroys militarism. Not port deals.
Al Qaeda is, quite simply, true Islam. It is Islam at its purest and most dedicated and most willing to die. This only changes when the proud, the brave, the dedicated are all dead or broken. The Wars of Religion in Europe only ended after the bloodbath of the 30 Years War when an exhausted Europe said enough. If you want to win the WOT you must rewrite Islam and that means the Muslim world will have to suffer an equivalent of the 30 years War.
Give those people citizenship and send the people of NO to Mexico. Never saw so many useless whiners in my life.
For the Emir, yes, it was about hardball business. But for lots of his people it might well have been about paradise.
Blah blah blah. Blah Blah Blah.
If you switched gears anymore you'd be an old-fashioned lawnmower.
At the risk of getting another ridiculous answer from you, ignoring my point, how did the UAE thumb its nose at US?
You ask inane questions that show an utter ignorance about the Mideast. Like all that stupidness about 'allies'. Someone who does not understand that there are only temporary convergences of interest, never 'allies' as you do understands less than nothing.
I hope I've been able to teach you some basics about the Middle East. Feel free to print my posts and reread them until you understand them.
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