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.
Islam is less than 1400 yrs. old. That is the degree of accuracy to be expected from those cheering the GOP's sverve towards suicide.
Why would you post all that irrelevent crap? It does not make you appear that you know what you are talking about except to the even more ignorant.
Did you see James Carafano on Fox News just now?
He is virutally SNEERING at the stupidity of the people who are against this deal.
He actually said that we are LESS SAFE now that the UAE has pulled out because the UAE had agreed to make changes and security implementations (at their OWN expense) that the U.S. companies will refuse to make!
He also said that the "they'll have access to our security plans" was the dumbest argument of all because the ONLY thing that the company secures is it's OWN CRANES AND BUILDINGS.
You should start a new thread with that post. Not many will wade through this one to see something that needs widespread attention before these morons delude too many others.
You simply do not understand this issue if you believe there is a National Security threat. That is why so many have become hysterical they are clueless as to the realities of modern shipping.
The initial disinformation was provided by the idea that security was being farmed out. It is a LIE.
In fact, security will weakened by turning this deal down since the company was going to provide additional security assistance ON ITS OWN DIME.
EVERY salient objection has been based upon the belief in one LIE or another.
That is the simple truth.
Savage is the source of great damage among the conservatives.
He is a lunatic who acts as a lighting rod for others too gullible, misinformed, unaware and politically clueless.
This is one of the most suicidal charges I have ever seen the GOP make. Not since Watergate is anything I am aware of been so controlled by blind hysteria.
These morons would watch Carafano and say he was paid off. He was absolutely devasting. Many of us have the same scorn which is impossible to conceal. These nuts are as bad as those still trying to drive Lincoln from Washington and Grant from Virginia.
As an example it is a fascinating example of mass psychosis and the madness of crowds. Can we at least figure out some way of profitting from the catastrophe?
Oh, I think some of the unappeasables think they have profitted.
That was one of the things the Founders were most concerned about: excessive response to public hysteria.
Do me a favor and watch Brit Humes show tonight and the interview with James Carafano and expert in these matters.
He lays out an incredible story of how rejecting this deal has harmed National Security. It is revolting.
No doubt the RATS and the Ultra Right wing of the Lunatic fringe has benefitted. The latter has shown the great danger it poses to conservativism. It is now time to start thinking seriously about concentrating support around Guiliani I think.
Okay.
You gotta be kidding.
I missed Brit .. will catch him later tonight ... to hear that Carafano is disturbed about this only makes me more fearful. Was he that pointed?
You want us to watch another SNEERING know-it-all defender of this thing?
Sorry, buy y'all have put me over my monthly tolerance for being sneered at.
No, I don't. I want you to remain blissfully ignorant of the truth.
And he KNOWS what he's talking about, unlike you.
I'll watch.
Any facts he has about the controversy I'll listen to.
But his sneers he can stick where the sun don't shine.
You deserve to be sneered at; the press, who you denigrated the entire time you ran Keyes in Illinois, suckered you.
Shows how much you less you know than you think you know.
I didn't run the Keyes campaign in IL.
I was occupied taking care of children who had just lost both their parents.
Your bile knows no bounds.
You were sure on here 24/7 telling us he was going to win.
B.S.
Show me one post where I said he was going to win.
Or is this claim another invention of your creative imagination?
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