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.

[cookcounty]

"Embarrassed and ashamed is more accurate. This is a global deal for DPW...only the US has reacted this way."

Any idea where the other non-US terminals are that P&O is selling them, and what percentage of the total $7 billion deal involves US terminals?

[Edit35]

I'm tired of threats by pissant countries. Screw them.

I'm with you 1000-percent.

If UAE was REALLLY a friend of the USA, if the UAE really understands the terror that is Islam, then they would have pulled away from this deal a long time ago, knowing it would be seen by the American public as a threat.

If the UAE now wants to move closer to the west, they can shut down their Maddrass schools, begin warming up to Israel, and for heavens sake, stop coddling the other crazy Arab countries (like Syria, Iran, and Saudi Arabia) which are supplying weapons and terrorists.

[jess35]

Why do you constantly feel the need to advertise your stupidity?

[isrul]

Agreed.

[Junior_G]

Some because they just hate Arabs, even the ones who are pro-U.S.

I thought you guys had moved past "you all are a bunch of racists" argument. It doesn't help your cause.

[.cnI redruM]

I think that's a distinct possibility. If you ever really want to piss someone off, pick someone who has done you a really solid favor and publicly condemn them in the harshest terms possible. We've just spent the last week telling the world these guys aren't too far away from bivouacking in the same cave as Osauma. The people running UAE had a choice of which side's military could take advantage of their territory.
Either

A) they pick the US, because we are a loyal and trustworthy ally, or

B) They could choose AL Quaida because of cultural and religious solidarity.

We've just told them to take their dirty hands off our ports because we want them run by our own. Why wouldn't you expect them to feel absolutely infuriated at us for behaving in that way?

[tertiary01]

I'm just sitting back seeing what gets flushed out by all this; you're the one who has to go into the name calling mode because you think I'm opposed to your ideology.

[Do not dub me shapka broham]

*guffaw*

Coming from you I'll take that as a compliment, goober.

[prairiebreeze]

And we have left a bitter taste in the mouth of one of our allies, for NO REASON. We could have just asked for the extra 45 days, and worked this deal behind the scenes, and ended up at the same place.

Bingo. Nor will they forget it.

Congress acted like spoiled children. They are a disgrace.

[Paul Ross]

Well, are we all happy now...

Such a staunch ally in the war on terror.

Got any more where these skunks came from?

[ohioWfan]

it has become a symbol of a far larger battle, Globalists vrs Americans. I happen to be on the side of the Americans.

That is a grossly inaccurate, and misleading characterization of those who saw this port deal as a positive.

You include in those who are NOT Americans, Peter Pace, Tommy Franks, the U.S. Navy, and the U.S. Coast Guard, not to mention the Commander in Chief.

You cannot seriously mean what you said.

[CharlesWayneCT]

I just heard Warner's reading. DP World seems to predicate the deal on getting as much out of the sale as they put in for the U.S. assets.

So the question is, can we find a U.S. company who will pay full market value for these assets. And will the slap-dash republicans be willing to take that chance?

[jess35]

Because the Royals gain our protection from their own home grown Islamic facists that they themselves perpetuate.

Again, the UAE isn't the same as Saudi Arabia. Two different countries, okay?

[Mr. Mojo]

Spot on -- we carry the big stick, and this dead deal isn't going to change that fact. If the UAE decides to "retaliate against American strategic and commercial interests" and oppose us geopolitcally, they'll (eventually) pay for their stupidity in a big way....

[.cnI redruM]

You seemed to be trying seriously hard to make the comment that UAE and Saudi Arabia are one in the same. Yeah, those folks all look the same, there must not be any difference...

[jpsb]

I am surprised so few "get it", can't see the forest thru the trees I guess. I keep pounding away but but I don't think it is do much good. Quite a little fire storm we've got here. LOL.

[CygnusXI]

"And why are so many people HAPPY about it? Some because they hate Bush and think it will take him down. Some because they just hate Arabs, even the ones who are pro-U.S. For most, it is a combination of both."

Missed my reason.

Ah well, easier to generalize. So you're either a biggot, bush hater, or a mix of the 2. lol. Nice.

Here's my crazy thought.. Security is affected no matter who is in charge. I have a hard time believing that security would be better under UAE. That's all.. Guess I get lumped into the hate arab catagory huh.

[cookcounty]

"Sotp that. UAE is evil, and no amount of data from people with first-hand information will change that."

They certainly are evil . They allow liquor and gambling and even churches to operate openly!!! Surely we could find some nice Bhudda-bombing Burqua people, if we have to have friends in that part of the world.

[JamesP81]

This whole code of honor at all costs, let's kill the Jews, we hate the infidel West except when its propping up our despotic little regime crap has to end.

This is an honest question, not intended as snarky or anything like that. Have the Emirs in the UAE said as such about jews? Because if they have that's important. I find it difficult to do business with jew-haters, if in fact they are.

[prairiebreeze]

Your posts are silly. There is nothing noble about how this had been handled or turned out.