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.
If a truly democratic election were held in most of these countries Al Qaeda would be the winner, which is why none of them hold things called democratic elections.
Why is it so important for you to piss on the head of an ally like member in good standing of the Party of Treason?
Great. Iran invades Dubai and the world pays $4+/gal for gas, destabilizing energy strapped Asia even further. Boy won't you feel vindicated?
I don't think this is over by a long shot. I'll take a Pukin Dog guarantee and add some prayers for Bush and our great country.
Harrass you? I've posted to you once this year on a thread I was already on last week.
You don't understand how this forum works, do you?
The blackmail threats by the Dubai royal family just sealed the killing of the deal. Bush had a chance with the Senate, but the blackmail threats today just ended it. The deal is dead.
Now we're seeing the true nature of these muslim "allies" that Tommy Franks, Bill Clinton, Maddie Albright, Tom Daschle and Jimmy Carter were pimping for. Blackmail, threats, rage and anti-Americanism.
Actually, I doubt it. The people who run the "big money" in Dubai and other countries aren't stupid...they know how to negotiate, play politics and use the media to their advantage.
No one is exempt, including American companies...again...THIS IS HOW A BIG BUSINESS OPERATES.
"It will be interesting to see how our so called UAE business partners react to the normal give and take of business"
Fool! Calling a business partner a terrorist and throwing them out of our ports is not part of a normal give and take in business. They are in their right to do likewise to Boeing, GE and Exxon... payback is a bitch.
I sure China, Europe or Iran would be more then willing to fill the gap that the US leaves behind. It's a shame that political votes is worth more then what is best for the US.
Eventually the opposers of the deal will have their "Pogo moment."
"Personally, I agree with the UAE. Did we all think it was risk free for them to allow American warships to pay visits there? They could have just said no..."
...and they should have. The only reason they didn't is they like the money. Dubai is trying to transform it's economy to finance and tourism from oil. No way they can do that if they start getting picky about who they allow to dock there.
Just kidding. We can not have humiliated middleastern emirates, or they will cut off our oil and make us withdraw our military from their sh!thole country.
klintoon does it again, screws up American security!
He blind sided President Bush!
Hope the RINO's on FR are happy!
They have klintoon, 1/2 wit albrite, penut carter et all
on their side!
Bill Clinton helped Dubai on ports deal
http://www.freerepublic.com/focus/f-news/1588266/posts
Financial Times (FT.com) ^ | March 1 2006 23:50 | Stephanie Kirchgaessner
Bill Clinton, former US president, advised top officials from Dubai two weeks ago
on how to address growing US concerns over the acquisition of five US container terminals by DP World.
It came even as his wife, Senator Hillary Clinton, was leading efforts to derail the deal.
Exactly correct. Wall Street is worried about this and the impact it will have on our debt. Watch the market take a hit over time as a result.
Hope everyone enjoys watching those investments take a hit.
makes me wonder about which side I am truly on.
It appears that logic and reason have left the right wing.
Now I am certain it didn't go over to the left wing, so maybe these individuals aren't the right wing anymore.
I agree with you.
The security issue had little to do with our ports here. The game being played here by congress holds great potential to compromise operations in the entire region.
Perhaps we'll need them E-85 vehicles much sooner than anticipated.
Is that better or worse than being "aligned" with Jimmy Carter and Bill Clinton, who are both in the UAE's pocket? The fact is, George Bush has made it very easy for the Democrats in congress to actually be right for a change.
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