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.
just watch.
That's all I will say, just watch.
until yesterday they did.
Now we've put a knife in their back.
Much as I hope your prediction is wrong, it probably isn't. Did you see all the people on yesterday's threads stating, emphatically, that Dubai wouldn't retaliate?
And DP World's specific involvement in that event was:
(Cue up "Final Jeopardy" music)
You're welcome. Sheeeeesh.
Is it possible that in the end, a court may rule that there is no basis to not allowing the sale and will force the sale to go through anyway?
Your an idiot. they are the biggest home port outside the USA for our navy. They truck water to our soldiers. You're an idiot.
How old are you? Our military is going nowhere. Quit yer bitching.
The message is that we have a group in this country that will do anything to hurt us!
I just pinged you to it, mystery.
you're in that group too FC.
Way to go.
Just watch.
I just hope they don't snuggle up with Iran.....
And yes I will do nothing but blame the segment of FR that's aligned with Chuck Schumer. Hope you enjoy it.
"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. "
Let's look at it a different way.
We are allies with the US in the WOT. We provide them with bases with which to launch attacks against Iran in the event of a war. We buy their high end products that keep their economies alive. We have been running ports all over the world for many years. We are willing to go through a 45 day process review to see how we can make this deal work from a security standpoint.
They don't trust us? Screw the US.
We should be on better terms with South Africa, and do our thing from there.
"It seems to me this is a win/win for the Democrats. They get to damage the economy, alienate an ally in the war on terror, and make Bush look bad, all while posturing as defenders of our national security. What a coup, and credit must be given to their useful idiots on the Republican side who went along."
You got that right. The knee-jerks AKA Republicans just lost my vote. I've voted straight Republican ticket in every election since Reagan was first elected. But I no longer see any reason to waste my time voting any of the Republicans back in office. I'll sit this one out. I think the Dems will take back the House, but not because of Dubya's low ratings in rigged polls. Because a lot of the base will say screw the Republicans when they act like scared Democraps.
Security is in the hands of the US Coast Guard and Customs. Somehow I have more confidence in the opinions of Gen. Miers and Gen. Pace (based upon long experience with the UAE) than the hysterical lunacy of the Party of Treason and nitwit GOPers running around like brainless boobs.
If Congress forces this bill on the President, Bush will go before the nation in a prime-time address and explain why the bill must be vetoed, and he will call upon Congress to produce a spending bill that does not contain the ports measure.
I know that many of you think this is over, but it isn't, not by a long shot. I just want you all to remember where you read it first. Bush is going to win this. I guarantee it.
I guess it comes down to a value judgement - what is more important, the desire of the UAE to close the port deal, or the desire of the people of the USA to take our security seriously?
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