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.
Nice ...it does not say that the UAE (as a government) did or did not...but the UAE did allow an environment that provided an opportunity for the chicanery to occur. Which should be of concern.
YIKES!
FABULOUS RESEARCH!
But Duncan said they did.
...but the UAE did allow an environment that provided an opportunity for the chicanery to occur. Which should be of concern.
Oh, like that doesn't happen HERE?
We can't let the facts get in the way of a good old rant, now, can we?
That's odd. The Saudis have ports in NYC. They were approved on Chuckies watch. No squawks about that from him.
Nope. Can't say I don't blame them.
"You've been here since 1998, lol."
And you haven't, LOL. And I already addressed this by saying they are all singing off of the same page. They have their marching orders. It' funny how the Coast Guard had grave concerns, but as soon as that info made it into the press, the Coast Guard suddenly began singing a different tune about how their concerns had all been addressed. Yeah, sure. Plus it is immaterial that the POTUS, US Navy, Coast Guard and Generals say otherwise. Generals, the Navy, and the POTUS have no part in port security. The Coast Guard does, so that's one out of the four you list. None of them could guarantee who might be hired that would have terrorist ties, by the Dubai port managers. None of them could guarantee what would be shipped where, when, and how, the port managers would do that. All it would take is a couple of rotten terrorist apples in the Dubai port managers' infrastructure, to do us harm. By the way, we weren't talking about my ability to express an opinion, which I do often and in rather thorough detail everytime I post. We were discussing a Congressman's opinion as vs. generals, POTUS, the U.S. Navy rep and the Coast Guard rep, all who answer to the POTUS, don't they. He's their boss. Funny how they all agree w/his opinion.
That is the most intelligent comment from you yet.
Are you drinking tonight?
Serious question.
That is Hunter's opinion and he has a a higher security clearance than I do. If you think he is a liar than maybe you should tell him so.
He doesn't have a higher security clearance than Tommy Franks and George W. Bush.
I also wasn't born yesterday. So, when General Franks and Abizaid gave updates on the WOT from CENTCOM, were you equally jaded? Just curious. Are these men liars who only worship at the altar of Bush?
This was no victory for Americans. As Jack Kemp said tonight this was "shameful". I have not expressed any concern about the economic foolishness of this action merely the disgusting picture of the US stabbing an ally in the back because of the LIES of a pack of LIERS. Almost everything said against it is a LIE.
Go riot with your anti-Globalists not that you even know enough about economics to know what that is.
Oh for heaven sake, what a conspiracy. Well certainly we must look with disrespect at the the Generals, and the Coast Guard because they work for the military. And we should certainly listen to demagogic congresscritters like P. King and Chuckie Schumer. As if they have no axe to grind.
As soon as this deal was put in the Treason Media the RAT spokesmen hit the airwaves on the Sunday talk shows.
Democrats and "being right" shouldn't be used in the same sentence by a Conservative.
So we should what make it even easier... solving one problem by creating another one isn't a grand strategy to me.
Schumer has fought every action which could strengthen our anti-terrorism effort unless he gets a piece of the action.
Don't make me laugh by pretending this whore cares about National Security.
Not that it matters, I'm just curious.
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