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.
Comprehension does not take place when you have blinders on.
Ops4 God Bless America!
This won't work for political and logistical reasons. Using Israeli ports to support our forces in Iraq would not fly in Jordan or Iraq and it would cause us needless grief from the rest of the Middle East who view Israel in less than favorable terms. Some Arabs already view the US entry into Iraq as a proxy war for the Israelis. Using Israel as a logistics base and transhipment point would just fuel the flames. Logistically, Israel does not have the container facilities that approach Dubai's. Jordan would never allow the transhipment.
Or just skip Dubai and go directly to Basrah.
We already use Basra, but it does not have any where near the port facilities of Dubai nor is it as secure.
Or go to Kuwait or Bahrein, instead.
We have bases in both countries, but they don't have world class port facilities either. They are not major ports of call for the world's commercial ocean going trade.
Dubai doesn't have a monopoly here, so stop acting like it does.
Dubai is among the world's most modern sea ports, especially in handling containers. It is the transhipment point for the entire region. When accepting inbound cargo at the port of Dubai, shipments are then segregated and reshipped to other ports in the region. It has nothing to do with being a monopoly, but rather, being efficient, secure, and cost effective.
Dubai provides a modern, secure port of call for American warships. The UAE provides the US with airfields and bombing ranges to train our pilots before going to Iraq. Sure, we could work out some other less than optimum solutions if we want to write off Dubai, but we would still have to deal with other Arab governments to make up for the loss of these facilities.
Since when has Genocide won ANYTHING?
We aren't going to fuel-air bomb anyone and their country isn't that little in the first place.
And if we didn't want them to get nice with Iran, maybe we shouldn't have called them a country full of terrorists.
It's obvious to me that you probably couldn't have found the UAE on a map before this controversy. Maybe you should forget it even exists because you don't know CRAP about them.
"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."
This say a lot. Just WHO do they think they are, threatening us? Haven't they got the nerve. They don't own the U.S., and this IS a good reason to keep their creepy little fingers out of our cookie jar. Boy, oh boy, them folks can take a slow boat to China, too...
It would serve us right. We've got a bunch of real jerks in Congress these days -- on both sides of the aisle.
what friggin world are you living in?
We aren't going to FAB a friendly country over a business deal that WE screwed them on.
And you make the mistake of thinking that genocide is the only way to win.
An ally that we have to pay money to is not an ally. The UAE is not responding to the ports deal failure the way a real ally would.
In case some people aren't sure what an ally is, study the relationship between the US and the UK. The UAE does not fall into the category of "ally."
What would you know about that given your cluelessness wrt this issue. Blind is better than deaf, dumb and blind in any case.
What would you know about that given your cluelessness wrt this issue. Blind is better than deaf, dumb and blind in any case.
Typical stupid comment. Read this thread and learn somthing. The Antis are destroyed by facts.
If you want to be taken seriously, by me, or many others, I would suggest you drop the attitude and words that demean other people's comments. After all, I did not ASK for your opinion. And if you say anything else that's nasty, I WILL NEVER answer you again. SO THERE...
I know what I read, I posted it, it speaks for itself both posts I might add.
You are totally rude, and must have an agenda that does not fit the Freerepublic, a stance on understanding facts.
Or your agenda has not been to defend Our Great Republic, all along!
Whatever side you say your on is now suspect as far as I am concerned.
I have been a member here for over 5 years, and most know when I post, it is documented. You are just a lot of talk and insults, as your moniker cannot deny.
ZOT ALERT!!!!!!
OPS4
GOD BLESS AMERICA!
If they were such loyal friends, they wouldn't retaliate but they seem to lack understanding that majority rules and the American people overwhelmingly opposed the port deal that the president said he didn't know anything about but was going to veto it. Say again? The American people are tired of being played.
That's not going to go over too well.
There was no clear explanation and if the administration cannot market its ideas, it's not my problem.
You are a LIAR. Pure and simple. There is not a word of truth in that post wrt me or my ideas.
Fighting with Know Nothings helping the Party of Treason does little to improve my attitude.
The American people were lead down a merry path of deceit. Most have no ideas of the details of the situation, the business deal nor port security. Most don't know a terminal from a port. What was packaged as a security issue was actually a grievance from a company with a failed bid, the longshoremans union and the Democrats. And foolish republican congressmorons.
We will pay for this, fianancially for a very long time. I hope it's only financially and not with lost American military and civilian lives through loss of intel. Which we are now going to pay even more for.
Very true
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