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 Worlds acquisition of Britains 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 Dubais royal family are furious at the hostility both Republicans and Democrats on Capitol Hill have shown toward the deal.
Theyre saying, All weve done for you guys, all our purchases, well stop it, well 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 Dubais 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 Boeings 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 Boeings 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 Boeings Apache helicopters. Meanwhile, Boeing has been in talks with the emirates to try to sell its AWACS planes.
An industry official with knowledge of Boeings 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, Boeings 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. Boeings 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 dont 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 Id not care to quantify that, because I dont 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 am. Screw the UAE. Let them wrap themselves in dirty sheets and pretend that they are on our side. Get out of our country. Go Michael Savage, who is the real hero in this victory!!
Mexicans. And Nagin is NOT happy about that problem in his Chocolate City.
He does not want them to stay.
Oh, please! How lame. His post was clearly about what it was to the opposers of the "ports deal." The Dims and RINOs.
Thank you, UGLY American.
And why 6.8 billion dollars?
This was never about port security...it was about a business dispute some Dems had with P&O down in Miami, and they didnt want to deal with the UAE to settle it.
And yet you all will deny this is about Arabs?
" On paper the shipment was harmless enough. Sixty-six American-made spark gaps--high-speed electrical switches used in medical devices to break up kidney stones--traveled from the manufacturer in Salem, Mass. late last summer to a buyer in Secaucus, N.J. From there, according to the export declaration, they were to be shipped to their ultimate destination in Cape Town, South Africa. But these spark gaps can also be used to detonate nuclear bombs--and it turned out that the goods were aimed at an end user in Pakistan, with a stopover in Dubai. The commercial capital of the United Arab Emirates, where trading activity accounts for the biggest single chunk (16.5%) of a $20 billion economy, has become a favorite diversion point on the Persian Gulf for shady cargo. With no export controls and hardly any bureaucracy at ports, airports and free zones, this entrepôt provides stellar cover for smugglers hoping to bypass U.S. embargoes...
Still don't believe it ? Go to Forbes and read the entire article.
LOL Darn good thing someone is informing Congress of something! We need a Senate investigation to find out how Bush kept these foreign airlines in the US a secret.
Put down the waterpipe.
"I knew there was something there that I liked ; )"
__________________________________
Thank you that is kind of you to say.
I wish people hadn't let their fear run away with them. The U.A.E. could be a good ally.
I am very honest about mine. I don't trust Arabs, and have yet in my life to meet an honest one. I live in NYC metro area and have had enough Islam garbage for 200000 lifetimes.
It was all about a business deal between P&O and DPW, of which 6 operations are US based. Our troops were never threatened. There has been speculation along the lines of "what if divestiture offends Dubai and they blah blah".
Then according to your standards you are stupid too, because you are failing to understand "temporary convergences of interest."
Your point is meaningless.
The UAE Emirs didn't choose who would fly planes into the WTC. OBL made that choice.
And OBL had Al Qaeda from all the Arab countries to choose from including Afghanistan and Iraq.
OBL specifically chose Saudi and UAE nationals. He did so because both countries had ties to the U.S. and both countries were part of the holy Arabian peninsula, a place where he was kicked out of.
You have demonstrated complete ignorance on the subject.
You are welcome. I will continue my attacks at the UAE, along with Michael Savage. We will run the people wearing dirty sheets out of Dodge! We won! Ha!! You lost Ha!! Maybe you should post At DU?? I mean, are you a REAL American?
I never said that their weren't weapons components smuggled through Dubai Port. I've already have links out the wazoo documenting that.
What I did say was I wanted to see evidence that the UAE didn't cooperate with the investigations and seizures of said weapons.
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