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.
Nowhere Man to UAE: "If you feel that way about it, don't let the screen door hit ya where the Good Lord split ya!"
What about Bahrain, Qatar, Kuwait, India, Diego Garcia, etc.
This is about whether an Arab kingdom will control U.S. national security interests. And the answer is "no", even if the President disagrees. This is why we don't live in a dictatorship. The people have spoken, through our House of Representatives. It's a good day for our sovereignty!
"For every action, there is an equal and opposite reaction." Newton.
Really? Are their leaders elected democratically? Do they have freedom and equal rights for all their citizens? Do they allow women to control their own destiny? Do they have freedom of speech?
Think about it.
We do need to fight and disassociate but it's tough when those same folks start the fervor on the subject like the port deal.
So true. Just like we watched the far left obliterate the Dem Party and make them utterly unappealing to the mainstream, the same will prove true for Republicans but only if we don't heed that lesson.
Let them threaten all they want. The American people were right to disagree with a sheikhdom-owned counrty operating U.S. national security interests. And our House was right to speak for us.
The latest poll by Quinnipiac University found that 88 percent of those asked think illegal immigration is a serious problem. Put another way, 94 percent of Republicans and 86 percent of Democrats see illegal immigration as a serious issue .
http://transcripts.cnn.com/TRANSCRIPTS/0603/06/ldt.01.html Aired Mar. 6, 2006
Sometimes, gosh darn it, I just forget to do that. ;)
-Dan
"No right [should] be stipulated for aliens to hold real property within these States, this being utterly inadmissible by their several laws and policy."
--Thomas Jefferson: Commercial Treaties Instructions, 1784.
THAT, is a blatant and total misrepresentation of this port deal.
I am glad that you "people" (despise intended) are only a small minority and have been kicked out of the Republican Party long time ago. If your ilks were to control the party we would have lost all elections.
I honestly do not know what "lie" you refer to. I did not make a claim that DPW would make an immediate operational change. I did claim that ownership, even seven layers removed, implies control in business. Yes, decisions get made seven layers up that DO cost jobs. If you are going to accuse me of a lie, please be specific. I am just guessing here.
The human species is deadly lot. Fanatics through history have been the source of immense cruelty, death and destruction. The religion of Islam has had more than its share of such, for over 13 centuries now, with unceasing Jihad against us heathens. The fanatics of western civilization, such as communists and Nazis, have been doing their best over the last century or two to catch up however.
The useful idiots in the press, the media, the university and political office have continued to confuse matters no end. This confusion has dealt a grave blow to W's efforts from 9/11 and before. Islam has been raging jihad against us for decades now in this latest round, fueled by oil money, and we have yet to stand up to it with the national clarity such as Churchill displayed against Hitler, or Reagan against the Soviet Union.
At least Bush is standing up, but he still calls Islam the religion of peace. The media and press still go out of their way to downplay continued acts of violence against America, on our own soil and abroad, while exaggerating the violence and disregarding the motivation for any acts of war America commits in response.
Great wars are not won until great clarity of purpose is found.
We aren't there yet.
I feel like I am reading a great novel, and I'm in but the early Chapters. For some strange reason, I cannot skip ahead and see how it comes out. I can only keep reading, and doing my part, for we are each small characters in this story. But I know that many more chapters remain. I can feel the heft of this story in my hands. No doubt I will be deceased before the final chapter. May my descendents live in freedom as I have.
OK, then, that explains a lot of what I've seen today.
I didn't say it wasn't a serious problem.
I said there will be no meaningful legislation.
Petty enough not to let a kingdom run by fiat to be placed in control of U.S. ports? Fine by me.
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