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.
Oh they went over the cliff alright. Dragging America's reputation with them.
Great find. The Union thugs are deep into this. Saudi ports in NYC? Fine, says Chucky. No upgrades that take Union jobs. UAE ports in NYC? NO WAY, says Chucky. They are state-of-the-art. Too many Union jobs will go.
So... actually I think his clearance is higher than retired General Franks...and two people with similar clearences should agree 100 % of the time? As to "my daddy can beat up your daddy"..I am not playing that game because that is not the issue.
Can you not grasp the fact that the very same people who ran the terminals LAST week will be running them tomorrow?
Even if the UAE deal had gone through, the SAME people -- UNIONS -- would be doing the same jobs they've been doing for years.
Do the facts not matter to you?
When I decide to pitch one you'll know when it starts and stops. At present I am just responding to LIES.
I beg to differ. I believe it is THE VERY issue.
If I have to believe a congressman, be it my own Jim Talent or Duncan Hunter, over Tommy Franks, or other Generals who have been in the field, it's very easy for me.
Congress has performed VERY POORLY in this. And I don't forget issues like this.
Not by an act of Congress.
Oh, that's a great point! Speaking of environments for chicanery; the 9/11 hijackers trained in FL. Three Al Queda terrorists were arrested in Ohio last week. An entire cell was found in Buffalo, NY. Another terrorist ran down nine people with an SUV in NC. Bad places!!!
62-2.
Our representatives decided that the views of 80% of the American people mattered more than the opinion of the world.
Boohoo...
The bigots are the ones that go around killing business deals on the basis of skin color and religious background.
Serious question.
It is a question of access..not by the UAE as a singular entity but by persons who may for treasure or blood exploit and achieve another surprise attack on Americans in America.
If the "deal" is beneficial than a "review" is not a bad thing.
I'm sure they're working on that right now.
It's the entire Congress, with a few notable exceptions.
In addition to the overwhelming majority of the American public, who are usually right about things that directly impact their personal security.
Which state's representatives were prominent attendees at the Arab-Islamic conference in October of 1973-which occured at the height of the Yom Kippur War-where the Arabs tried to break the back of Europe and the United States-and in the former case succeeded beyond their wildest expectations-for having the temerity to not unreservedly endorse the annihilation of Israel's citizens?
I'll answer for you.
It was Abu Dhabi.
Which pseudo-country bankrolled the construction of the grand mosque and Islamic center of Rome-whose odious minaret now dwarfs even the most hallowed, indispensable elements of the Church in the city where the Papacy is headquartered?
None other than the very UAE that some faux conservatives are now falling over themselves to venerate, God knows why.
These people are not allies, no matter how much that lie is repeated it will never be true.
Welcome to Bush's second term.
Yeah. She said it was to toughen me up for all the jerks I was gonna meet in this world...
Anyone who green lighted the deep-sixing of this port deal paved the way for the UAE to issue this "payback".
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