Dubai threat to hit back (UAE Threatens Against Boeing and US Bases Support)

The Hill.com ^ | March 9, 2006 | Roxana Tiron

[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.

[mlc9852]

I have read and heard quite a bit of both sides but their attitude towards Israel is what killed it for me. Of course DPW wouldn't have been in charge of any security and nothing much would have changed. I just don't want anti-semites operating our ports. Simple as that.

[gondramB]

"We have Republicans and DemonRATs willing to trade the close relationship we've developed with the UAE for some stupid notion that it will give them reelection. Good night! If one could measure how shallow their political loyalty for the country, it would require an electron microscope!"

It would be a good time to live in D.C. - I'd like to hold a "we support trade with UAE - they are on our side" rally.

[Jhohanna]

Your Tales from the Crypt have no bearing on this issue.

Go to the grandparent... it's related there. :)

[SunStar]

The depths of which are utterly stunning.

Ahh yes, you have an indefensible position, so you resort to namecalling. Nice job.

[Flux Capacitor]

----I'm sorry, but I'm not among the classic conservative homophobe stance.----

I might as well tell you that around here, that's one fight you're simply not going to win. Sell out our national security interests to the Middle East, we can do; live-and-let-live with American homosexuals.... uh uh. ;)

I have a gay friend (uh-oh, there goes another of my conservative "credentials") who's a stinkin' leftie (though I've heard him say a few things on welfare and immigration that tell me he's still too far to the right for his party), but who, in just about any given political debate, can absolutely destroy most of the people who want to burn down theaters showing "Brokeback Mountain".

-Dan

[KJC1]

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

Talk about melodrama. I haven't seen one post in this LONG thread saying the UAE is perfect or our staunchest ally. Rather, they are an important ally to have right now in the WOT to include the escalating situation with Iran. Why that is hard to understand is beyond me.

[Howlin]

Bump to that, jon!

[Jhohanna]

I hear ya Tulsa, I hear ya. As I heard Penn Gillette yesterday... let those that ride, decide. :P I *LOVE* IT

[Fruitbat]

Probably their plan all along, knowing how the public would react.

It was certainly a self-fulfilling prophecy initiated by many in the States.

[Flux Capacitor]

----The founding fathers, if alive, would not belive this was even a topic of discussion!----

Hey, stay tuned. We'll be hearing about all the things they could "never have foreseen" in no time. ;)

-Dan

[onyx]

Excellent. I must try to remember to reference FR's page from time to time so as to END all arguments...lol.

[Howlin]

We have even disagreed once or twice before.

That we have; but we have AGREE once or twice on other issues, too!

That's what makes this place so great.

[SunStar]

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?

I'm sorry you can't defend your position better. That's not my fault. Namecalling isn't a good debate tactic. It shows weakness.

[1035rep]

I already have the flu and my stomach just couldn't take the visuals anymore :) I might have to go lay down awhile

[Fruitbat]

Talk about melodrama. I haven't seen one post in this LONG thread saying the UAE is perfect or our staunchest ally. Rather, they are an important ally to have right now in the WOT to include the escalating situation with Iran. Why that is hard to understand is beyond me.

If they're such a marvelous ally, then why this? It's reasonable from our perspective.

[TigersEye]

Yes. They're not really our ally.

Tell that to George Bush, Tommy Franks, Donald Rumsfeld and thousands upon thousands of our servicemen/women who have been through or stationed there.

[Jhohanna]

We oppose all forms of liberalism, socialism, fascism, pacifism, totalitarianism, anarchism, government enforced atheism, abortionism, feminism, homosexualism, racism, wacko environmentalism, judicial activism, etc.

Hrm. Well, they might as well be anti human then. While the organization is free to oppose it, there are those of us that are related to people who are homosexual. So, we don't exactly have a choice.

[Howlin]

Evidently, including some Freepers.

[Jhohanna]

Actually, I didn't understand a word of that post. And I don't get what you are trying to infer.

If that makes me stupid, oh well. It's incoherent.

[Howlin]

Oh, can you pick me up? I'll go with you!