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.
Ah! The veil of innocence and alliance falls to the floor to reveal the ugly truth of deceit and deception in the form of economic threats and extortion. For now we see through a glass, darkly; but then face to face.......
It's not enough that you're DPW deal divides the GOP. It's not enough that you allow the perception that Democrats own the defense issue because of this deal. It's not enough that your only threatened veto in six years is over a PR fiasco. But you and all your cohorts must continue your senseless, groundless, vengeful ad hominem attacks on the GOP BASE so that there is NO GOOD WILL ANYMORE.
What is your stake in this deal? What's your angle in this game? Will you profit? Are you a WH operative? I'm curious WTH is so vital to you that you're willing to destroy not only the GOP majority, but any good will remaining within the GOP?
What is it about Dubai that bedevils its few supporters?
That is the essence of the truth here. I could care less what the world thinks of us as a culture but we will soon see what it's like to do business, economically and in war, with great hostility and suspicion from allies and would-be allies.
Got stocks? I hope you know how to read the wind, when to buy and when to sell.
This instant gratification crap does not fit in that plan.
You are wrong about this, and I hope you see that error sometime before you cash in your chips.
This debacle, added to the rest of the strategic errors made in the last two years by members of the party, have put us into a tail spin that we cannot get out of. It is a disgrace and a sign of the demise of a what once was a great country.
Bush cannot put this rift back together, and he cannot repair the damages. This will cause a power shift that you cannot stop.
The Chinese will simply step into the vacuum.
They seem to be behaving in a business-like fashion, considering that the promised 45 waiting period was taken away, because members of Congress are behaving like hysteria-driven adolescents.
Simply because a country has the outward trappings of a free market and capitalism does not mean that it is automatically a U.S. ally.
I have a question for all of the Dubai boosters on this thread.
You can make the argument that mainland China is more capitalist in nature right now than Norway.
Does that mean that the PRC is a more reliable, trustworthy ally than Norway?
Actually, most who think this is bad simply didn't understand the context.
I was fully supportive of the port deal, and also fully support this move by a business to make a business decision for themselves based on the opposition.
I objected to the U.S. implementing a command economy regarding U.S. port terminal operations, and back-stabbing our allies.
If our allies want to be kind to us, that's fine with me. I fear that the new owners won't have the money to implement security, but that is not a big issue to me.
I'm sure all those who in this threat accused DP World of all sorts of evil will now apologize, since the announcement said that because of their long friendship with our country, and because they value the friendship, they are willing to make this concession.
I don't think that many people actively "SUPPORTED" the deal. The division was between people who opposed the deal, and people who thought the companies had a right to make a deal and we had no right to block it.
It's like the argument over free speech. If opponents want to block a KKK rally, those who support the RIGHT to have the rally aren't likely to actually SUPPORT the rally itself.
Uh-oh. You mean an American company will now have to pony up the amount that DPW wants in order to buy the terminals leases??
Gee, wonder if congress thought that far down the line.....(rolling eyes)
Maybe the congresscritters can dig down in their pockets and become investors of said American company to help them muster the required capital.....oh yeah, never mind.
Yeah, both; also, they think they've taken over the GOP now, being able to stampede the stupid GOPers into this.
Little do they realize that not many are going to follow them off that cliff.
As a matter of fact, yes - except Chapt. S is not a good choice ;-)
If I did not mean it I would not have said it. I've also said the the merits/demerits of the deal mean nothing. This is a grass roots revolt against Globalism, spawned by the globalist policy of leaving our borders open to mass illegal immigration.
I am now officially ashamed of the Republican party.
Wow...I thought I would never see the day. Welcome to reality.
People don't need oil - cars do.
A: An ally.
We had a deal that DPW agreed to.....to wait and analyze for 45 days.......and we reniged on the deal.
Who should trust us? Our word now officially means nothing.
You said -- "Yeah, I'm sure Iran's desire to destroy Israel was based on whether or not we made this port deal."
Iran getting the bomb or not depends solely on our ability to stop them. That's all. Nothing more.
Taking the UAE out of the picture (as far as our presence there) will limit that ability. That's the point of having the UAE.
Take a look at the map and see where the UAE is relation to the Strait of Hormuz, which Iran said they were going to "shut down". Then you'll see the extreme advantage of having a presence *exactly there*.
In addition, we're not *fighting* inside the borders of the UAE. Our position is pretty safe there. However, we *are fighting* (to this day) inside of Iraq and still have plenty of enemies that are blowing up our soldiers. Of the two places to be (and to be based), the UAE is much better and safer and doesn't distract our military from their present situation of fighting the enemy directly and in front of their faces (as in Iraq) -- versus -- having a secure staging area and no worries about fighting an enemy right in front of you (as in the UAE).
And if that wasn't enough, you also have another position and side to launch attacks upon Iran, besides from within Iraq. We're tied down in Iraq whereas we're not tied down in the UAE.
Regards,
Star Traveler
Grassroots? ROFLMAO. It's sheer lunacy, led by the liberals and UNIONS.
Face it, you bought the lies.
yep....come on down Hailburton.....
I really don't care how they feel. I feel better, though.
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