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 Worlds acquisition of Britains 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 Dubais royal family are furious at the hostility both Republicans and Democrats on Capitol Hill have shown toward the deal.
Theyre saying, All weve done for you guys, all our purchases, well stop it, well 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 Dubais 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 Boeings 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 Boeings 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 Boeings Apache helicopters. Meanwhile, Boeing has been in talks with the emirates to try to sell its AWACS planes.
An industry official with knowledge of Boeings 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, Boeings 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. Boeings 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 dont 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 Id not care to quantify that, because I dont 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.
GOP House Panel Votes to Block Ports Deal and comments
There is a comment there from someone actually involved in international shipping.
The deal is dead. The president has been told by both the house and senate that any veto would be overridden.
But is anyone really surprised that the Dubai royal family would resort to threats and blackmail?
No, you misunderstand, and perhaps I was not specific enough. Some areas will westernize over time. The UAE is a major example of that. Iraq is heading that way strongly, though the insurgency is slowing it down a bit. Iran had a chance until the population let themselves be too cowed by the Mullahs.
That's where the spectrum goes from westernizing to full-out war.
Some of the Islamic world will respond to the miracle that is western culture, some will have to be removed. We are in danger of poisoning the well with UAE, making it harder to implement our removal process.
I have no reason to trust Arabs. I hope the deal does not go through. Let Bush veto it. That'll help the Republicans up for re-election.
So pissing on the head of a vital ally is ok with you?
He needs Dubai to do Iran.
It isn't anything like that. Put down the hookah.
ROFL!
I've asked for facts and back up and of course, he has none. Zip.
How about just avoiding my posts and not posting to me? That is what I do with yours. (I figure it is okay to ask you not to post to me since I have seen others do it).
It's racial profiling. Where's the outrage over Communist Red China controlling the West Coast?
They can. America is not the only game in town. Fortress America: raise the drawbridge, ready the boiling oil, and prepare for the siege!
If they kick out the US military their neighbors will have their way with them and the emirs will be bloated corpses.
"And DP World's specific involvement in that event was:"
DUBAI's THE COUNTRY WHICH OWNS DP WORLD's involvement (even though this has been beat to death)
* money laundering for terrorists
* initial safe harbor for terrorists
* travel mechanism for terrorists
* bin laden connections with terrorists
I sorely do not want to do a cut and paste. So don't tempt me. The sides have been drawn. Problem is the American people don't have to be elected, so that is why in general, 3/4 of everyone is against it. Explain that my fellow conservative friend. The infamous "MSM"? Puleeeez. There is enough info out their for everyone to discern what is going on, and initial concerns.
Judging from the goateed child I see on your profile page and your earnest use of a term such as "STFU", I don't believe you're in a position to be calling anybody "son".
And I don't care if you've been to the frigging moon. :)
-Dan
Old adage: Politics makes strange bedfellows.
On this issue, which bed do you want to get in -- the one with the fleas or the one with the bedbugs.
Please don't misapply Marshall's remark. He was not speaking of American Know Nothings pissing on the head of a vital ally.
This isn't blackmail. This is how business operates. Sheesh.
Do you have any clue how many countries use the UAE to manage their ports?
True friends of America support Israel; they don't prohibit goods going to or from Israel from entering or being shipped through the ports they control. Somehow I do not think that America's Jewish population wants people that hate their guts controling American ports.
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