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 do not totally agree. But I will be ecstatic if Halliburton, or KBR gets the contract. Don't throw me in the briar patch!
It's not unsourced, see here: http://www.freerepublic.com/focus/f-news/1593048/posts
Some of the language is different, but the idea is the same.
Islamic hubris! Yank your support Dubai, and suck Iranian hind teat. Blackbird.
Do you always complain this much? Maybe you ought to develop your own website, then you could make all the rules.
And decisions...
You will never find where our brothers of Mohamed (praise be upon him) put the nukes.
That hasn't fit all posters on FR at times though.
What I object to the MOST, is congress's underhanded, dirty-dealing on this issue. Pttuui! Captains quarters blog says it well, Here's a snip:
It took a fortnight of hysteria, hypocrisy, and rampant misinformation to resolve this dog of a deal, a process which should thoroughly embarrass everyone involved.
The new deal works for the President; he can maintain credibility with a strategic partner in the war on terror, and as more facts come out as the shouting subsides, his position will improve. Congressional Republicans get to claim their independence from the White House. Congressional Democrats get to brag about their insistence on ignoring their own call for a second security review and claim the result as a win. DP World gets to dump the worst part of the P&O deal onto an American company that will get to deal with the political fallout of the controversy.
The only losers appear to be Hillary Clinton and the state-owned foreign firms doing exactly what DP World wanted to do with these terminals. Hillary still has to explain why she so vigorously opposed a deal that her husband actively facilitated, which promises some interesting rhetorical contortions later in the election season. The other firms from China and Saudi Arabia should face the same level of scrutiny as DP World, if Congress actually gives a damn about port security and all the concerns they raised over the DP World deal.
A whole lot of "knee jerking" going on here, over un-named sources, and a lot of hubris. What a bunch of flakes you appeasers turned out to be. Grip, get one! Blackbird.
I cannot blame the UAE for wanting to spend their money elsewhere BUT at the same time I cannot EVER forget that the UAE is where the USS Cole was blown up. Maybe one has nothing to do with the other but...... maybe it does.
The $64,000 question, or is it the $7 billion dollar question? Look at all the "knee jerking" going on. LOL! Blackbird.
Believe that was Yemen..
YOU are so correct. I formally apologize to the UAE and this forum for MY ignorance.
Actually, I've never complained about moderation vis a vis which articles are posted and which are pulled.
I think they do a tremendous job on FR.
Today was the exception.
understood re tin-foil. fair to say that claiming the same about the USSR in the 40s-50's that has to some degree been confirmed now would have been considered tin foil also. you can bet various US intelligence agencies are certainly involved in covertly trying to influence outcomes in other countries we have an interest in.
IOW everyone does it.
okay fair enough
That thread is very old news.
This one is fun too: http://varifrank.com/archives/2006/02/thank_you_for_f_1.php
So, let me get this straight - While the entire US political-wonk class is frothing out the mouth over the sale of "port dock concessions to the United Arab Emirates" in a fashion I havent seen since the great "Flouride Wars of the 1950's", it turns out that "Emirates Air" and its subsidiary "Emirates Sky Cargo" has Passenger and Cargo Terminal Space at JFK.
Chuckle. I was referring to Bre'r Rabbit. The Dims jumped up and said that even Halliburton would be better than DPW. Whoever negotiated the business divestiture will be considered a genius if they involve Halliburton or KBR in any fashion. I was not accusing you or anyone else of throwing me in the briar patch. It was metaphor.
The CQ take is pretty accurate IMHO. The vitriol and hyperbole will ratchet down wrt to DPW. And a precedent has been set for scrutiny and transparency regarding state-owned enterprises.
Would you care to explain that? Not being snarky, but I personally posted that thread today, from a news article from today.
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