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.
How can FR people be so stupid as to think these 2 men are selling out our national security on this deal? Rather, they are reienforcing our national security.
FR is getting so shallow it is scarcely to be believed. Unfortunately, the "nuke them all" crowd is alive and well here.
Of course not. But NO ONE IS PROPOSING THAT.
So you think mooring a carrier pier side there is wise huh? Use the PI's for the yard work as has been the long standing tradition. As ex-Navy myself maybe you can answer this question. Where did the COLE bombers learn exactly where to hit the ship or any ship to do the most damage possible? Nah couldn't have been in a shipyard../sarcasm It seems our leaders learned nothing about port security from that attack. The arrogance in the belief that no one would dare attack a U.S. Navy ship continues. Why leave them vunerable? A ship is most vunerable in tow places. One being at a per but especially so in a shipyard as all hatches etc are opened up and D.C. capabilities & water tight integrity is Nil.
BTW have you ever seen just how fast a ship even an aircraft carrier can get underway anchored rather than moored to a pier in an emergency? Do you realize the logistics of even getting a carrier away from a pier and underway and the time and coordination with the locals that is needed? A carrier anchored can be underway in the time it takes to hoist the anchor. As a matter of fact the screws can be turning gettting it uderway while the anchor is coming up. I've seen it happen myself. That means underway and out of port in a very few minutes and not hours. IOW in the time incoming attack is picked up on radar the carrier can be getting underway and ready to launch planes. The one moored will be still waiting on tugs.
The US has no involvement in the internal policing of the UAE.
So why would these 'terrorists' allow our country to refuel our WAR VESSELS at their port and host an airbase that was used in the attacks on Iraq?
Look, I work for a major major international transportation company. There are tens of thousands of muslims on the ground in the transportation system capable (at least theoretically) of enormous damage and mayhem. They know "security systems" a lot more intimately than any executive under a palm tree in Dubai. Your focus is totally wrong. It's" bottoms-up" infiltration you should be worried about, because it's 10,000 times easier, and cheap. These folks already have access to our methods and data.
THat's like sleeping with your neighbor's wife and then being upset with him because he doesn't invite you over to dinner.
The dark little secret is that like a large percentage of Americans, a large percentage of Freepers are underinformed, uniformed, or downright ignorant.
It is not a failed business deal! It was a successful business deal that is being destroyed by changing existing laws and playing politics. That is whay the UAE is resorting to this. The US Congress has decided to make some deals more fair than others. The UAE has every right to be pissed.
Gotta Go to an appointment. Have a nice day. And I mean that, because I wish no ill on you this day, nor any other.
Since just after the election in 11/04, when Republicans started turning on the president and did absolutely nothing to defend him against the leftist lies, my husband and I have told every caller and completed every envelope requesting $$ from the RNC that when our people start stepping up to the plate, we'll donate again. Until then...zippo.
We started it.
I think there are some who actually think these threats of retaliation will make some who oppose the deal change their minds? Go figure.
So all we had to do was nix ONE contract to destroy all that "trust" we've built with all our other business dealings with UAE?
This has all the earmarks of someone who throws a tantrum NOT because they were denied what they wanted, but because there's an ulterior motive which they've spent all this time working towards -- and now they can't have it.
Whether there is or isn't an ulterior motive, their doing their best to act like these is.
BTTT
Stop being a crybaby. This is the internet.
I have no idea if the courts would have reason to get involved. I suppose UAE could file suit...? ... Any thoughts cboldt?
At this "political" level, the courts don't have a case. Eller (P&O's Miami operation) sued in London to stop the sale, and was tossed out of court there.
They also sued in the US, but on a business angle. If an administrative agency steps in and enforces the law in a way that permits a lawsuit, then I expect there will be one. So far, there hasn't been any enforcement action (relating to the sale) against P&O or DPW.
I haven't bothered trying to postulate realistic solutions to this political idiocy (yes, I mean idiocy, not ideology - all of the pols are acting stupid), but I am sure there are many of them.
THESE Arabs have meant EXACTLY what they've said. They have promised help in our time of need and DELIVERED even though it meant placing themselves in the sights of the Terror movement. Yet you join the Party of Treason's Conga Line to piss on them and expect them to like it.
Another great post. It would not bother them one bit if Israel was blown off the map and America brought to her knees.
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