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.
Jordan
Israel
Iraq
Afghanistan
India
I'm sure the UAE will reconsider after the sudden loss of billions.
You're too dumb to realize the SAME people who had access to the ports YESTERDAY have them TODAY.
You and your misinformation have accomplished nothing, except finally showing the extreme right wing of this party for what it is.
It will be quite funny to watch the hysteria again, but for a different reason.
The schills for this agreement keep telling us that we should trust the UAE, and that the UAE is different from all of the other Islamic dictatorships, simply because they allow so much foreign investment, and have an affinity for some quasi-capitalist practices.
Whether or not a country is capitalist is not relevant in my opinion, if it has none of the other characteristics of a genuinely democratic, stable, pluralistic free nation.
The UAE was just condemned by the U.S. State Dept., and has the same scale of freedom-perhaps not quite as bad-as Saudi Arabia.
That's not what I would consider an "ally."
Hey don't confuse people with facts.
Conversation over, jpsb. You can't be taken seriously...........at least not by a military supporter like me.....
We have the ability to stop them. It has nothing to do with a port in Dubai.
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.
It's not working, if that's the case. Iran magically circumvented our steel curtain in Dubai and is building nuclear weaponry anyway.
"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*. "
How will this stop Iran from launching a nuclear missile at Israel? And how does NOT having it prevent us from firing off a nuclear missile from a sub outside the gulf if Tehran decided do just that?
I understand what you're saying, but we have a massive base of operations in Baghdad already. You think Iran isn't a little queasy about that? Dubai won't make them any queasier. We can drive our tanks right over the border and go straight to the Capital.
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.
You make a good point here, although, let's face it, Iran would love to have control of Dubai all the same. I HIGHLY doubt UAE will actually tell our military to go home, whatever business punishment they try to inflict.
Principles. I am left wondering how a man of principles ever got elected to office in this country much less to Commander in Chief. It won't happen again soon after this.
By my count, this is the third time this "group" here on FR has managed to divide this forum and stampede and "leaders" of this party into doing something REALLY stupid because of votes.
Terri.
Miers.
Now this, the most dangerous of them all.
I suspect they will be back for more, as they seem to have a need to destroy Bush, et al., in order to take back the party.
"What is it about Dubai that bedevils its few supporters?"
The question has been asked. But I've never seen an answer that made sense.
Follow the money
Follow the power grab
Follow the payback for unspoken debts
Follow the Bushbot leaders
I guess we can still spend time correcting errors.
There are U.S. subsidiaries that have leases for terminals in ports n the USA. These companies were bought over time by other companies, and currently are owned by P&O, a foreign stockholder-held company. Nobody knows here who the stockholders are, it could be that Saudi Arabia is a majority stockholder and nobody here would know the difference (they aren't).
When P&O stockholders wanted to sell their company, they put it on the open market, much like you might advertise your car for sale.
Only two companies made a bid. If you were selling your car, it would be like only a muslim and a skinhead showed up.
DP World bid the most, and so P&O accepted their offer. There were no american companies who even CONSIDERED making an offer, because there was no U.S. company who was in a position to by P&O, a 6.8 BILLION DOLLAR deal.
Now, DP World is going to sell off the US subsidiaries that operate the terminal contracts. That is a SMALL PART of the entire deal. They apparently hope that some company has enough money to buy out that part of the P&O company from them -- their offer is contingent on them not losing money on the deal.
It remains to be seen if there is a U.S. company willing to buy the businesses. What if no US company makes a bid? The House passed a bill which would require DP WOrld to sell even if nobody was buying. Maybe you could have offered a buck and owned a major shipping company.
In other words, the government of the US was going to force the sale of an asset to a US person without regard to whether anybody wanted to buy.
Which nobody did. However, I imagine there is a company who sees this as a useful thing to do now, and will step up. Maybe microsoft, they have some money ;->
If every foreign company tried to divest every US holding at once, there wouldn't be enough money in US company hands to buy all the assets, and our asset base would crash with our stock market.
We have been living on foreign investment. This was congress trying to interfere in the market.
They could do it... at least they have the tech and the trucks.
First of all, that's an oxymoron.
Secondly, I'm in agreement with over seventy percent of the American public, so I don't see how my stance could be characterized as "extreme" in any case.
You and the thirty percent of the public that are living in a hermetically-sealed bubble-issuing paeans to the Bush administration, even as a growing portion of this country becomes disenchanted with it-are the ones who are out on a limb.
Are you referring to 9-10 principles or 9-11 principles?
Calling Peter King??? Calling Peter King?? You have a spanking coming! Come out of the girls' bathroom with you pants down and assume the position! Calling Peter King!
One more note: Dubai, as a financial capital, would suffer greatly if Iran blocks Hormuz.
They will NOT ask our military to leave.
That dispute was due to some trafficking in young boys as camel jockeys and the UAE has since addressed the problem to our satisfaction and the issue has since been been dropped.
But it has been presented as a current problem on this forum and elsewhere to affect the port facility sale by the democrats.
Really stupid....
How far can the hatred of the left and the far right for President Bush go? How far?
The different sides call him different names, but their goal is the same..........to destroy the President........and they don't seem to care if the security of the country goes down with it.
Quite an alliance we have here, isn't it?
What a dumb statement; just dumb. Is that the same 70 percent that believe abortion should be legal?
You and the thirty percent of the public that are living in a hermetically-sealed bubble-issuing paeans to the Bush administration..
Careful now, your agenda is showing.
even as a growing portion of this country becomes disenchanted with it-are the ones who are out on a limb.
Only because you believe and push the LIES; without lies, you have nothing.
If you were somebody whose opinion mattered, I'd be worried.
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