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 didn't. Just added my postscript, because I thought alot of people got spun based on a falsehood.
Now that has to be the stupidest post on this thread. Who tells you when to inhale and exhale anyway?
LOL......I hadn't thought of it THAT way, but when have they EVER been consistent.
I have news for you, Schumer doesn't give a rip about security, and he lives in a state that already has seen an attack.
Looks like Abizaid is going to have to learn the hard way how dumb it is for generals to meddle with political hot potatoes like this one.
When you look at how many people think that there was a security issue in the 'ports deal' your point becomes patently obvious.
Right. Leave it to the politicians LIKE YOU to decide.
Good grief.
Stupid move by Dubai. They're merely confirming the suspicions of the critics of the deal that Dubai's friendship is only as deep as the thickness of a dollar.
No accusation taken, AFMSF.
Your username fits you well.
What sunk the deal was a truckload of bogus information. Selling the ports. Security turned over. UAE supports the Taliban. You probably know the list well.
You will never catch me being an apologist for Islamists, EVER. I am also not a braindead moron who would happily crap on an important ally, in a crucial position at a critical time. Do you want to win the WOT? If the answer is no, then you make total sense.
It has nothing to do with money, it's about how you treat your friends.
Oh, that's informed enough alrighty. Nothing could demonstrate your grasp of politics, business and society better than that.
Better to be rid of them now than later. What other foot holds could they get to hold us hostage?...To hell with them.
Again you are not confused, you are a troll.
As an aside, roundup and deportation wouldn't be necessary, on the heels of Tyson and other CEO's being carted off to prison for their crimes. They would self deport. Blackbird.
Cboldt posted:
~~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. ~~
ROFL!! Quick, somebody call Harry Reid or Schmuckie Schumer. We must be protected...aaaarrrhhhhhgggg!!!
"There is not going to be legislation that sends them back. Period."
Yes there will. In phases. Those that aren't on record for committing a crime, can stay but have to register, pay into a high deductible insurance pool, must have insurance to drive, and will have to learn english. Any failure of those four, you get hauled back. Those that have committed a crime, and are still here for some reason, will be hauled back and banished. Its not that hard. You don't have to destroy businesses in the process.
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