Dubai threat to hit back (UAE Threatens Against Boeing and US Bases Support)

The Hill.com ^ | March 9, 2006 | Roxana Tiron

[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.

[Merlinator]

Lets all send our contribution envelopes back to the RNC with a note to "Shove It" and a thanks (sarcastic) for the damage done. I just sealed mine and they canpay the postage to get my opinion...sweet

[jimbo123]

Really, there were supposed to be NO American companies that could handle the job? Dubai was the ONLY answer. What changed?

[JamesP81]

Because the port deal was cancelled, we'll all be out of jobs? What?

My comment was made in the context of this representing just another commercial interest in a long line of commercial interests being outsourced.

[processing please hold]

But Rush told us Dubai changed after 9/11... Once a snake, always a snake.

Right. They they have taken down the veneer of ally, and their true colors are out their for all to see. A snake is always a snake, agreed.

[teawithmisswilliams]

We don't need no steenkin' ME allies. Got that?

So, the Congress and the people should just step out of the way and let the deal go through, or our "ally" will turn on us? We'll give up our rights so the UAE feels properly rewarded?

And if GWB doesn't want to enforce our immigration laws, we should just accept that, too.

/Let's just call it "democracy lite."

[Sweetjustusnow]

"I think you have the Emirates confused with the Saudis. Saudi Arabia is the "home" of Wahabiism. The Emirates are relatively secular compared to other Arab countries. Are you comparing a country that allows us to dock our Navy ships in its ports nad helps us in the war on terror to Nazis?"

I most certainly do NOT have the UAE confused with the Saudis and if you would do some reading you would find the facts as to the history book story that was posted here a couple weeks ago, you would have read about their support of Hamas and suicide bombers, you would have learned of the wmd's going through those very same ports to Iran, etc. As for comparing them to the Nazi's.....fascism is as fascism does.

But hey, never mind the facts on the ground about the UAE. As to you're first comment concerning "ignorance" it seems you were referring to yourself.

[mlc9852]

So you agree that American companies should operate our ports, then?

[Star Traveler]

You said -- "Maybe Americans aren't as stupid as you think. Maybe they have decided for themselves that they don't like this deal."

After seeing how the election in 2000 went (Florida and the aftermath), along with the one in 2004 (do we have another "Florida"?) -- I would say that there is a large group of "stupid" out there.


And you said -- "Maybe some of us don't like how the UAE treats Israel and Jews in general. Maybe you are wrong and others are right."

And so you're going to cut off your nose to spite your face, I suppose. That will show them all right. It's a good thing that Israel doesn't think the same way, or they wouldn't be doing business with the UAE. In the meantime, Iran will simply get the bomb and blow Israel to bits. Yep, then we'll get the real "point" to the port deal.

We'll see who is right -- pretty soon.

Regards,
Star Traveler

[Do not dub me shapka broham]

No, I just thought they would find that graphic entertaining.

It's not too hard to deal with someone suffering from Stockholm syndrome.

[Siena Dreaming]

If we stop working with any company that is from a country or owned by a country that doesn't do exactly what we want, we will be very lonely.

And poverty-stricken.

[Peach]

A lot of us hoped that Halliburton would step up to the plate.

You do understand that there are currently no American companies providing this kind of service, don't you?

Nice that you keep trying to pretend that someone is lying about that.

But it wouldn't take long for a company like Halliburton to get up to speed.

[CharlesWayneCT]

They are just announcing that they will sell off the U.S. subsidiaries that hold the terminal contracts.

I don't know who is going to buy them, or how long it will take them to sell them. It probably will mean a loss for them, I'm sure they aren't worth as much now that everybody knows congress will react without regard to facts.

Odd how a company who the opponents say bought P&O simply to subvert our port security seems so willing to bend over backwards to mollify our unfounded fears.

I suppose all those who complained about "blackmail" on the thread will now praise DP World for being a good "friend" who turns the other cheek when attacked.

But like Ted Kennedy said to Mary Joe -- "Don't hold your breath waiting".

[Blackirish]

A lot of our troops do R&R in Dubai....that will end too...

---

That means there cut off from the Russian girls at the Cyclone.

Told you I've been there.

[hedgetrimmer]

It's imperative that we have foreign investment in this country so our debt can be serviced so that the corrupt politicians we elect can print buckets of money and tell us there is no inflation.

[CygnusXI]

"Lets all send our contribution envelopes back to the RNC with a note to "Shove It" and a thanks (sarcastic) for the damage done. I just sealed mine and they canpay the postage to get my opinion...sweet"

Pfft.
I did that when Pawlenty(R-Gov Mn) went back on his "no taxes" pledge to sign into law his Communist manifesto of .75 per pack cigarette "fee".
:p

[Txsleuth]

I would love to shove something down Schumer's throat!!

But, he would just be the first...

[jackv]

"So you support the Emir's blackmail campaign? Do we deserve his threats because of Congress' actions yesterday and today?"



Oh here it comes. This will be the response from those responsible.
They are not threatening violence! Good grief, they are just saying...Fine you have attacked our crediblity as honest allies and brokers...take your ports and shove it!!

I don't blame them. I would never work with/for someone who treated me that way.

[bwteim]

Thanks. If US corp takes over port ops from DPW, stand by for Roseanne Rosanna-Danna "never mind" from some / then again, maybe not.

[Cboldt]

You do understand that there are currently no American companies providing this kind of service, don't you?

Oh?

[cookcounty]

" Here's what might be an obvious question, but I haven't seen it asked. Assuming( which I don't) that the UAE only wants this deal because they will monetarily profit from it; why not buy port rights elsewhere? How many ports are there in the world? "

They already do operate terminals all over the world, including Australia and Singapore. Dubai Ports World is to terminal operation as McDonalds is to Hamburgers. It;s waht they are good at, that's why they want to keep doing it.

80% of our terminals are operated by foreighn companies. Are we going to force sale of all of them? A lot of political demogoguery going on here.