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.
Ahhhhhhh nice to see the FR has it's D.U. lunatic counterparts.
Wow, and right after my post! See if you can take a crack at my question and get back to me.
FR has a lot of opinon shapers and just plain troll varmints that post here. They've figured out how to stay just this side of the line so they don't get banned.
I'm with you, I'll stick with Gen. Franks and Gen. Pace, Sec. Rumsfeld and the President who all have proven track records in the battles against terrorists.
I will NOT side with those who demonstrate they can't be counted on when the going gets rough. That includes people here and in congress.
It's done quietly and behind the scenes. The UAE is in a difficult spot here.
My stepson was based in Jordan at the beginning of the Iraq war, but at that time, we were prohibited from broadcasting that fact.
We have more friends in the Arab world than you think.
The Prez isn't doing a good job of selling it. He is acting like an autocrat instead, and it's backfiring on him. His poor record of securing our borders doesn't help either.
Bingo. I'm sick of the "GWB always knows best" crowd telling us that our desire to have illegal immigration stopped, and illegals deported, is too simple-minded, and that having a UAE-owned company involved in our port security is necessary because they're such good "allies."
Time to worry just a little bit about the "American street," President Bush.
However, I do feel like I'm reading the wisdom of Gomer Pyle whenever I come across one of yours.
It's shocking the number of people here on FR who just want to nuke them all. I'm beginning to think they're the scary ones who want to escalate the WOT.
The UAE submitted to an extra 45-day review. They've followed our laws to the letter, and expect to be treated fairly. We are a country of laws, not of hysterical girly-men.
The house just said "We don't want to wait for the facts". They simply said UAE is unfit to own anything of consequence, and can't be trusted.
It is THAT which has the UAE upset.
You should realise that these leaders are probably receiving DEATH THREATS on a daily basis because of their work for us in the war on terror.
If you had to live in fear of being killed because of what you do for a friend, and then that friend spits on you and says you are evil, you think you would react with favor?
Yeah. With friends like these... V's wife.
I did hear, and agree with his sentiment that the deal has been handled badly by both Congress and the administration.
The UAE would not be running security so your question is moot.
Of course you already knew they are not going to be in charge of security but that didn't stop you from repeating a blatant lie.
Savage is fun to listen to occasionally because he's politically incorrect. But he's mentally unbalanced.
Apparently it's some top secret strategery, even though Rush shared it with millions on his radio show. That said, I have no idea what the not-so-secret plan supposedly is.
Yes they do. You are dead on with that analysis. Perfect.
"Do you believe they want out of the dark ages? What is stopping them, then?"
_______________________________
A lack of a better life. If you see no alternative you have no choices. If you see neighbors prosper, their quality of life improving, education for their children and freedom you see how little you have.
OTOH, if you see that those Christians really don't want to treat you fairly then why not believe everything the islamofacists are telling you.
It's not moot. Why don't you answer the question? Because it will reveal a little "xenophobia" on your part? Hmm?
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