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.
And we, as a sovereign nation have a right to not sell any thing, or right, to another.The UAE says we can't change our minds. That we MUST sell to them or else.
They don't have a RIGHT to this deal. They just had an opportunity. Who the hell are they to say we can't change our minds if we think better of it?
Why is no nation owning a part of ours bad? Important infrustructure in the US should be US owned, period. I have a big problem with foreigners 'investing' here by buying up so much private property, but when it comes to ownership of important infrustructure I don't want ANY foreign ownership at all. Nope- not even by allies. If that is counter to international politics- too bad. It's my opinion.
Wait just a second. This is Allah's will so what's the big deal?
Brit reported that currently no company can handle the management of the ports that Dubai was going to manage and that one would probably have to be created.
I hope you like having more federal dollars involved in day to day life.
At least you are up front with your priorities. Now if certain greedy businessmen would learn that some things just shouldn't be put up for sale, then that is a good thing.
Yep, but seems we don't have any that can. That alone should cause quite a bit of concern for our future.
To the scale of the operations this sale would've involved, we've been told these are 3 companies that handle that caliber, none American.
Perhaps a company here will now try to come up to "speed". Or size.
If these terminals are no big deal than why is it so important to Dubai? No need to flame, just curious as to why.
Schumer says he doesn't trust it and isn't ready to back down.
and this might not meet the house-passed resolution.
The question is, will they be able to find a company that is entirely american and can afford and has the expertise to manage the terminals.
I still vote for WalMart.
Warner just said that Dubai was handing over their management of the ports to a US company (when one is found) in order to preserve their relationship with the United States.
So for those who think they were illogically threatening us, think again.
http://freerepublic.com/focus/f-news/1593281/posts
"Since when have the Democrats ever given a damn about the security of the US?
Never.
I don't disagree. I believe the democrats attacking the president on this deal are mostly just being opportunistic, but it doesn't change the fact that what they are saying is right. It's no different than when Hillary Clinton seizes the opportunity to sound like she's tough on illegal immigration when George Bush obviously doesn't care about it. I seriously doubt that Hillary cares if illegals flood the US, but how can you blame her for taking advantage of W's woeful ineptness on the issue?"
HEAR, HEAR!
I'd be happier if trials for treason were underway.
Oh, great. Now we have government creating business. Wonderful. Hillary will be thrilled.
I will also note that this is a rational BUSINESS response to a business problem. This issue has always been a business issue, not a security issue, and while the congress was pretending we have a command economy, the free market in the background was working to solve the problem they we you do it in the free market -- by selling off the questioned assets.
I keep mentioning it because it's an example of GWB overriding the people's will (and the immigration laws) because he apparently "knows" better. Sometimes, even a President needs to accept the will of the people. In a democratic republic, at least.
hawley. hawley! unbundle those briefs.
please spare us this stuff about "DPW is the greatest ports company in the world". the same people who were once claiming that "nothing would change" at the ports if DPW got the contracts, are now the first to jump in and say "the new contractors are going to be a disaster". you told us before that "nothing would change" at the ports, that it was just a paper transaction, just a change in the holding company. now all of a sudden, everything is changing?
Watch it go to Hutchinson-Wampoa.
I was going to ask him about it next week, but now maybe I don't have to.
Most people aren't upset because they are "foreign" but because they are Arabs. Big difference.
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