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.

[justshutupandtakeit]

Perhaps you meant "extortion" though it makes as little sense as "blackmail". Would you like to be insulted and disparaged after greatly assisting a friend in his fight with enemies and treated like an enemy yourself?

[kabar]

Bush Sr. set up Saddam Insane in Iraq. At that time he appeared reasonable. He wasn't. He had another agenda which we now live with today.

Saddam took over in Iraq in 1979. In 1963, with the Baath party in control in Baghdad, Saddam Hussein returned home and began jostling for a position of influence. During this period he married his cousin Sajida. They later had two sons and three daughters.

But within months, the Baath party had been overthrown and he was jailed, remaining there until the party returned to power in a coup in July 1968. Showing ruthless determination that was to become a hallmark of his leadership, Saddam Hussein gained a position on the ruling Revolutionary Command Council.

For years he was the power behind the ailing figure of the president, Ahmed Hassan Bakr. In 1979, he achieved his ambition of becoming head of state. The new president started as he intended to go on - putting to death dozens of his rivals.

What did Bush have to do with placing Saddam in power?

[jimbo123]

Screw Dubai's royal family and their attempt at blackmail.

[stuartcr]

It's all relative.

[dead]

You are out of your freaking mind, if you think the UAE is doing anything more than blowing smoke.

They NEED our military to use their ports.

They don't let us use their ports because they like us. They don't let us use their ports because they desperately want to unload container ships in New Jersey.

They let our military use their ports because the are under threat from militant islamic fundamentalists and our Navy in their ports discourages attacks.

Without our Navy in their ports, their tourism industry and their banking industry will completely dissolve in a matter of months.

When they actually do deny our Navy docking rights in their ports I'll apologize for calling you nuts, but that is not going to happen.

[PrinceOfCups]

...I predict that the UAE will cozy up with Iran...

Not too likely; Sunni and Shiites are bad mix, especially when one of the pair has rockets and nukes. USA and UAE still have common interests.

[mystery-ak]

Thanks...I'm gonna go find it..

[thoughtomator]

"Accept this deal or else" is blackmail any way you want to cut it. Margarine, butter, or Tabasco - nothing will get rid of that taste.

[kinghorse]

We give the region money hand over fist. without markets for their money, it's worthless and the Iranian Bourse start looking pretty good. Investment in poppy cultivation too! not to mention tithing to the increasingly strident (I told you so!) imans.

[Tulsa Ramjet]

If someone interferes in one of your business deals and costs you seven BILLION dollars,

If someone finances and flies some jets into one of my buildings, and cost me 3,000 people, I'm going to tell them to take their BILLION dollars and shove it up the @ss.

[cookcounty]

" Yep.

Let's see.. denial, or even questioning a UAE business venture in the US is deserving of essentially kicking out all US assets and scraping many/all US contracts in the UAE.

Yeah.. seems reasoned to me.

"Denial" is the operative term. Humiliating an Arab who has befriended you at considerable risk is idiotic. You can criticize them for being overly-sensitive if you want, but it's the real world, and there is a price attached to this kind of attitude.

[mlc9852]

Do you really believe we can "westernize" the ME? Just plunk down a couple of McDonalds and a Wal-Mart and they will love us, right?

[Petronski]

Screw them.

You and Chucky and Hillary are taking care of that right now.

[stuartcr]

I agree, if the adminitration would have come out with this earlier, and handled it properly, it wouldn't be like this now.

[tumblindice]

"Babe, it costs me about $2.00 to pump it--will you pay $200.00?"

"Are you crazy? No!"

"OK. Will you pay $100.00"

"Gee, I dunno. Say, what do you take me for anyway?"

"We've established what you are. Now we're just haggling over price."

http://www.gasandoil.com/goc/news/ntm43816.htm

[Flux Capacitor]

----We've acted like a bunch of 5 yr olds or LIBERALS.----

Yes, Mike, that's exactly what you and and the America-deserves-to-get-screwed-if-we-can't-have-our-way pro-port Freepers have done over the last month. It takes a big man to admit his failings; I'm proud of you.

Amazing, how you guys have been just as inept as the president in the selling of this. The American people know better than to take your race-based bait, and support right here on Free Republic is crumbling day by day. And you people, with your endlessly liberalistic rhetoric of anger, bitterness, and blame-America-first self-loathing, have helped to make it happen.

I can't help it. You people make me smile. :)

-Dan

[F16Fighter]

Doesn't this blackmail prove the point that Dubai's involvement and access to U.S. ports opens us up to further blackmail down the line?

They and Islam are dishonorable and untrustworthy. Period.