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.
I think you win the prize for the most absurd remark on this issue.
I am afraid that I do now, after a series of major gaffs by conservatives on the far right, which you seem to be.
It is a fact that we would have achieved nothing without a coalition between the various political stances, but that is all gone now.
I don't know how else to explain this to you because you refuse to see it.
So I ask you to revisit what I said after the 08 general and all will be quite clear.
So, I would say that most of this will go away now -- with this new "quid pro quo" that the Bush Administration has made with the UAE. It looks like Bush has done an "end run" around this whole thing, now.
What new quid pro quo?
I see you and Howlin are both playing the race card now. LOL getting desparate?
The appeasers here say to forget all about that stuff. They are such a staunch ally, that we must overlook their penchant for sexually abusing children. /heavy sarcasm
If you think we can prevail in the WOT, in the ME, by alienating those few Arabs that want to help that effort so be it. It's a valid opinion. You have every right to think it. And say it.
Yep.
And some on here are happy about that, too.
Join those who don't know the meaning of the term "blackmail" it seems to be common.
Stating the facts. Live with it.
Implying that those who have a problem with illegal immigration on our southern border are simply racists is nothing but willful ignorance.
"Florida was the "home" of many of the 911 terrorists. Florida had financial institutions which aided their ability to move funds within this country and to receive funds from their terror bosses abroad. Terrorists traveled at will within the United States. Bin Laden has relatives within the United States. So how exactly is the UAE different?"
I'm a nationalist. You're a Globalist. I take positions that I believe strengthens the integrity and perpetuity of the U.S. as the world leader. If other countries make decisions that help that end, so be it. It appears you take positions that strengthen what you perceive as either the global economy, or strengthening potential ties to other allies for...something. The potential of making a personal buck?
That is the difference.
I am not against capitalism. I am against stupid capitalism. As Jeff Goldblum said in Jurassic Park: "It's not whether we can do something. It's whether we should."
I just think people are building up UAE to be indispensible, and they're simply not. Regardless of our presence there, terrorists still ram rubber boats into tankers, Iran still gets its bomb, mosques will get blown up in Baghdad, and Saudi money will continue to bankroll wahabbism. If there's one good think about this situation, it's going to disprove the notion that we need countries like UAE more than they need us. Take a look at the hundreds of buildings being built in Dubai, and all those cranes will come down if they decided to end their business relationship with the U.S. and kick out the military.
We may need each other equally, but UAE can't walk away from whatever ties they have with us, regardless of the port deal.
Only when they ARE ignorant. Disagreements with those who know what they are talking about are welcomed as an opportunity to learn something.
No problemo"
Bush will veto. If the pubbies in COngress are stupid enough to override, the repercussions will be very real in economic terms, for starters.
And for all the geniuses on this forum, NO American companies bid on the deal, NOT ONE.
Saying they were going to be running a port is like saying an international airline would run an airport, when they would have only one terminal--same sort of thing.
See post #766
Then go forth and research.
Your are harassed by the Truth not Peace.
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