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.
The largest banking center and most westernized country in the MidEast who has been extremely helpful, more so that most European countries in opening their records to track terrorists versus one of the countries harboring and encouraging al Queda in Iraq.
I'm not against racial profiling at airports...at all. However, I am against painting anyone with darker skin as an immediate terrorist. Moreover, I am deeply offended that EVERYONE is hopping on the bandwagon that says this is bad for US Security when it is so far from the reality of the situation.
Britain, and our own United States did little to stop terrorists before 2001. We allowed them to live, operate and plan in our country. Yet, we regard the UAE differently only because of their location and their looks.
Ah, word to you: you made the claim; now back up it up, or stand down from your little tirade.
but this is from memory: The ports and ties to Bin Laden Construction
I will say right now that that is a lie: I've never mentioned bin Laden in conjunction with this deal.
Now, since you are so sure you're right: find it or retract it.
Oh yes, nuke em. That's brilliant.
Typical. don't have any real reason to beat em with facts...just beat em.
You know better than this. Or you should. It was establised beyond any doubt that DPW was in management, seven levels removed from any onsite position. The longshoremen that are there now would have, and will be, the same men.
Almost every word used by the opponents to this deal is a complete LIE. There was never any "takeover" of ports. Never any compromise of security. The only thing that made this different from the dozensof other operations owned by companies of other nations was that it was Arabs involved.
Believe me you will find none here more disgusted by Islam than I but these people are the exception which proves the rule and, at great danger to themselves, have been invaluable in our military efforts. This hysterical overreaction will cause us enormous difficulties now. Since the world can see that we treat our friends and allies as though they were enemies. It is a pathetic thing which has happened.
You haven't heard recently the latest gay agenda push? They claim old Abe was gay and he slept with his boyfriend in the same bed. LOL
Talk about revisionist history!
LOL, I've discover lots of tings about my family posting on the internet that mom and dad never told me. It all part of the fun. Do not let the little people get you down.
"I do desire open discussion, and propose divested interest of US port facility operations."
sounds good to me.
I have heard that also. Just makes me sick to my stomach. How dare they do that to Abe? The left will probably try to say the same thing about Pres. Bush or a future president in about 200 years. Sickening....
It was a VACUUOUS argument. Deal with it.
Now, since you can't seem to stay on topic, you may continue to pat yourself on the back for changing the subject, failing in your lame diversionary tactic, and thus losing the debate.
There IS racism involved, and it IS dangerous, and should not be ignored. That is the bottom line.........all your zigzagging and insulting me personally (when I had opened a civil debate) changes nothing in the substance of what I said.
btw, I just saw your very 'argument' on another thread. Can't you fellows come up with something original?
(Silly question.........you run in herds).
And they have an evil yet strong tourism industry. Imagine what "allowing" an attack through DPW at one of our ports would do for tourism! Why, the masses of Westerners would flock there twofold from what they do now. Sheesh. I'm going to Dubai next month, and am not looking forward to the correct comments that we are idiots on this issue, but at least Bush wasn't a shortsighted fool. I'm not one to take criticism of the U.S. lightly while visiting foreign nations, but on this one I'm not going to be able to offer a reasonable explanation.
That is totally false. This was RAT lead from the beginning and only after the GOP got scared did they join the hysteria. It has NOTHING to do with II. Nor was it the spontaneous reaction of the "grassroots" in fact the ones supporting the President are the grassroots not a bunch of knownothings being lead by the nose by the Party of Treason/Treason Media coaltion. Once again.
Ohio.. AMEN!
One certainly can't blame them...especially the way our politicians have bashed them.
Tell it to the Founding Fathers.
(no sarcasm, and disbelief)
PS: It's really hard to have an honest debate with everyone feeling so defensive because people attack them as you have me. People don't put forth what they really want to share for fear of reprisal. And that does NOT facilitate debate.
It's the same folks who whined when Honda started selling cars in the US and beating the crap out of American car makers...the same folks who would have essentially shut down LEGAL immigration in 1914-1917 because they were convinced the damn for-en-ers were takin' their jobs. It's the same folks who are now whining because India has call centers.
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