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.
Howlin, it's not that I've been all that great, it's just I was concerned about this deal and wasn't sure what I thought about it. Instead of going with my first inclination I decided to wait until more information came out. I also decided to do some research about how DPW operated because I thought this issue was important.
Y'know, we say muslim's need to be dragged into the 21st century and they need to quit operating with a 7th century mentality. Yet when they operate on the free market in the same manner as other western countries, they get shot down because they're mooooooslims. It sure shows up quite a number of FReepers as being hypocritical. These FReepers can't have it both ways.
I've read all this cr@p about how an American business ought to have bid and bought BPO but these same people haven't gotten around to thinking maybe no American company wanted the headache of dealing with the unions. None of them wanted to spend the capital to make the improvements to the facilities.
All I know to do is to shake my head in puzzlement over the shortsightedness of the anti's. Why didn't they do their own research? Why did they go with their emotions instead of seeing whether this might be a good business deal for the US in the long run?
snip it
We oppose all forms of liberalism, socialism, fascism, pacifism, totalitarianism, anarchism, government enforced atheism, abortionism, feminism, homosexualism, racism, wacko environmentalism, judicial activism, etc.
The Antis have not "stood up for the country" in any sense they have merely shown themselves to be craven cowards with no regard for important geo-political realities.
By joining the RAT instigated and led Mob they have elevated the RATS to creditable spokesmen for America. And weakened the GOP immensely.
Most of you like that since you have been opposed to almost everything Bush has done.
What the f*** have you been smoking? 85% of Americans oppose the deal because it would allow an Arab kingdom to operate U.S. national security interests!
"How does selling our port operations to a foreign entity bolster our sovereignty and security?"
Well, for one thing, we gain insight on shipping data on both ends of the transport process, per agreement. I guess we'll just continue to assume the inbound bill of lading is still truthful.
The depths of which are utterly stunning.
And if you refuse to call a rose by it's name, it's still a rose.
I have an idea... let's allow private companies to invest in the U.S., not companies wholly controlled and owned by non-democratic nations.
I have an idea. How 'bout you stop spewing BS?
Oh and things happened in the UAE because of past traditions and institutional needs but that is no excuse for THEM. Pathetic hypocrisy joined to ignorance is a mess.
And I suppose you believe that before the last decade or so II problems came about there were NO transfers of fund or foreigners using American banks.
Hilarious stuff.
That's exactly what I said.
Now pay attention: the people on this forum think "meaningful" immigration legislation includes sending them all back.
That's not going to happen because most people in this country -- not on this forum -- are not in favor of that.
There is not going to be legislation that sends them back. Period.
Color you clueless.
Nope I never call people stupid who disagree with me unless they are indeed STUPID. Those who have looked deeper than the headlines and RAT talking points have no problem with this deal since IT IS NOTHING LIKE IT IS PRESENTED.
But keep believing the LIES. One is stupid when they refuse to believe the truth.
Yes. They're not really our ally.
Indeed. Still spewing opinion, not fact.
"It" ought to be embarrassed.
BTW, your posting history is interesting. You've never posted more than about three lines at any one time.
Does your brain only work in Savage-esque soundbites?
Your reasoning to get to that point is less than stunning.
Mark my words.
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