"I've said it before and I'll say it again: Democracy simply doesn't work."
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.
They're not ignorant...they're blatantly anti-mid east. IT doesn't matter if friend or foe, if they're arab they've got to go. Some would call it racism. I would too. It's sick and sad and sets up for continued losses for the GOP.
Yes, I tend to agree that we ought to be promoting a strong relationship with the UAE. Their population seems to be rather on the fence between civilization and radical Islam, but I think the government/ruling family are really on the side of civilization, and doing their best to nudge their masses in the right direction.
If we had absolutely awesome security at our ports, there would be a better argument for a policy against allowing any degree of control by governments of foreign countries with shaky loyalties. However, with the infamous Department of Homeland Security having a lot of responsibility for port security, with or without DP taking over operational/managerial control, and Chinese and Saudi companies having similar control over other U.S. ports, it's pretty hard to justify the avalanche of opposition to the proposed arrangement with DP.
This whole thing is starting to look like a bipartisan conspiracy to build a pre-election (2006) smokescreen, behind which to hide the miserable state of the federal government's national security programs, for which both parties bear plenty of responsibility. I also strongly suspect that the UAE government provided some assurances to Bush administration officials, that have not been and cannot be made public, due to popular political sensitivities in the UAE. I'm willing to accept that we can't know all the details, and that if Condi isn't against it, it's almost certainly fine to proceed. If she were against it, I think President Bush would have back-pedalled fast when the firestorm first hit.
Seriously, a good Christian man doesn't do business this way. He does what he says, says what he does and what he does is not full of moneyed, buy your friends deals.
If America can only survive with dark side money games, I tell you today that America has already fallen. The Lord tells us (heavy paraphrase) "It matter not who watches the walls, if the Lord is not on their side".
LOL!
I am!
I would trust a Muslim like I would trust a rattlesnake. These people have more money than brains. Boeing should be glad to be rid of them because, no doubt, down the line they'd sue Boeing for some glitch in the manufacturing of the airliners and want all their money back.
Not even close. Did the fact that the UAE is despotic ("family-run") escape your notice? The most "Europeanized" country in the ME is Israel, followed by Turkey, Lebanon, and now Iraq.
Hon, if you honestly believe that, you need to take an economics course immediately.
Yeah I know I typod when I wrote it. feel free to ignore the underlying thought.
"I thought you said a massive global trade war was not even possible?"
Wow. you keeping score? I don't remember so I must peruse my ramblings and get back with you.
Yes. There's a thread right now that the UAE agreed to monitor Iran. I just left a message on the thread that they agreed to that before. I'm sure that's a dead issue now.
Only because EUrabia is swiftly becoming another outpost of a revived Caliphate.
Believe me, that's not an endorsement.
Far from it.
Look at it this way...
WHO exactly, stands to gain by embarrassing the President?
Hillary.
that's why Chuckie Schumer is taking such a big cheerleading role in this. He knows he won't be President, but he probably figures HIllary has a chance.
way to go.
and it isn't splitting both parties. The dems played this CORRECTLY. They turned the right wing and the GOP in on itself and now they are watching the explosion.
They've engineered the GOP into supporting a position that hurts us both Strategically (losing an ally and believe me that ally is now gone unless something drastic happens) and Tactically (another port in the storm is gone, possibly some big aircraft contracts as well as a LOT of money that would have come into our economy).
Bad Day. FReepers are aligned with Chuck Schumer. As IF HE'S EVER given a damn about the Military or the country.
Hmmmmmmmm?????
No, we've allowed globalist greed to interfere with sound decision-making related to national security. It never should have reached the point where we got in a pissing war over whether or not some Islamic nation was going to be managing our port operations. The fact that there was ever even a need for this debate is preposterous.
Where are the statesmen that used to put our country's interests foremost. Now they just have kneejerk reactions for their own election interests. At least Bush is a Statesman. He may be wrong sometimes, but, I believe he puts the his country's interests above his own. When he vetoes this bill it will be the right thing to do, but he is going to really get hurt politically.
You are correct, Peach.
http://www.washingtontimes.com/world/20050604-120011-6570r.htm
These are our "friends".
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