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.
Sorry, Tiger didn't call me the junior senator...you did....I was chuckling too much and credited him...
I would pull up all the scads of info on The matter and post, but I drove for about 7 hour today and my Rheumatoid fingers and hands are not working well. The info is eye opening and if you do a search on just her biography it is truly amazing how someone with so little experience in transportation anything, just Leftist Organizations and appointments got that Huge Important Job. There are still outstanding lawsuits against the city for damages to the victims and their survivors. Bottom line was probably cow towing to the Unions because they were paying off Chuckie in donations. JMHO.
You are absolutely right. I didn't base that opinion on a comparison with my own. I just know hysteria when I see it. The MSM puts little else on the airwaves. Its Chuckies stock and trade.
You either didn't read my response, or you are assuming (perhaps correctly) that nobody's going to back and compare your post with my post that you are responding to, since I obviously stated that I was completely opposed to the China/LA deal at the time. But having said that, I'm not too concerned with which column you put me under.
This threat just makes me trust them even more. Give us your ports or we will destroy you! I'm glad this deal is dead!
Yeah. Carry on with your attacks then.
Yep. Business deals go sour all the time. What kind of ally is so intent on managing our port operations that they make economic threats when it doesn't go through?
Cute. Most substance you've posted yet.
If their country was "friendly" to terrorists pre-2001 then so were most including ours.
Since 2001, the Port of Dubai has been a C.S.I. and a Megaports Initiative environment where WMD equipment smugglers get -- busted.
So I take it that means I should be more deceptive, no?
Awesome post. That sums it up well.
I was trying to remember if I had since I switched tactics and started acting like these others on your side.
You're pretty transparent to me. And without substance, as always.
They wanted and expected a fair hearing.
I think your opinion is right on the money. Thank you again but don't go to more work to convince me the Schumers are scum. I know it in the depths of my soul. Get ahold of a copy of "Waco, Rules of Engagement" and see how Chuckie acts when he thinks most people will never see him.
I don't think those idiot congresscritters understand that the isolationist Buchananites are good at making phone calls and screaming like hysterical damsels in distress to get their way,but they do very little work on campaigns and they give very little money. I have met very few Buchananites that I want to work with on anything. The best thing that bigot did was to destroy that Ross Perot party and made himself a laughing stock at the same time. I have already told my Congressman that I see the real him now and will not support him again.
Although, I've never seen someone so eager to prolong an unnecessary online beat-down, but De gustibus non est disputandem.
I remember it well and that was the beginning of my dislike of that Guy.
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