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.
Sarcasm You? Usually you rely on slapstick, no?
I read that and no, I am NOT surprised.
Whoops! Accusing Bush of Incompetence, Carlson Displays Her Own
MJ is came home a couple of days ago according to Drudge...guess they told Peter Pan to spread his wings and fly back the USA.
*prolonged eye roll*
Well, well, well..........................
A lot of them looked at the election of 2000 as a way of sticking it to the democrats. They thought the President would roll over and be their b*tch. They remind me of the moveon faction. They were so used to a President who governed by opinion polls they actually believed President Bush would obey their every dictate. They don't seem to understand the role of the President.
OK, I get it, "Corky". Ever the Populist, you are.
Or civil.
Although I think I come off much better when juxtaposed against you folks.
Did you bother to read the articles you posted? They don't prove your point.
Good logic. I believe that we see this in identical terms. I am going to hold my congresscritters' feet to the fire to develop the proper legislation or enforcement procedures to "git er done". Even if that means I have to choke down some form of a guest worker program. It is that important.
Pssst. It got zotted.
No, of course you didn't. You merely tried to weigh the validity of a post by the number of responses it got. (thus the populist label I gave you.)
OTOH, I characterized the link by the truth (or in this case the false facts) that were within the story.
I'll "juxtapose" that against your foolishness, any day of the week.
Nativist sentiment helped kill the Dubai ports deal
By DAVID S. BRODER
Before that, the conflict brought to the surface deep-seated resentments from the Capitol end of Pennsylvania Avenue toward the people around the president — and, surprisingly, toward Bush himself. The harmony that prevailed during most of Bush's tenure — the deference that a Republican-controlled Congress has generally shown to his wishes — disappeared. Even the normal circumspection with which congressional Republicans treat the White House withered in the unexpected heat of this dispute.
Gosh, what a shame. And I was so looking forward to its rebuttal.......
Elated
Avoid Foreign Entanglements was a stern warning by one of our Founding Fathers. Whether it be Allies or the running of American (insert whatever here).
Let an American Company stand up and take it over, or be created to do so if we don't have one.
It's past time we started doing for ourselves instead of hiring overseas companies to do it for us.
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