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.
How old are you?
Better yet, ever been to Dubai?
I have.
STFU "son".
" True "friends" stick with/by you whether they get what they want or not."
Your crazy. If the situation was reversed, we would be telling them to go to hell. I'm not surprised, but I'm very disappointed. The UAE has been a true friend in the war on terror. They stepped into harms way to help us, and our foolish leaders call them terrorist for politic points.
Republicans don't deserve to lead anymore.
this is probably the most fiery topic to come down the pipeline for "conservatives" to wrestle with in a long time. sorry if I'm a little sensitive.
Obviously, Boeing isn't happy about the mess.
And they'll mutter curses under the breath as they continue roll in dough.
Your post says that I should fear their actions. I disagree. Its the UAE that needs to kiss ass here, because without us, they and Kuwait and Oman etc cease to exist. Wake up. We are in a position of strenght, why do you wish to portray our position as weak?
So you don't know what "blackmail" is either? In addition to being clueless wrt National Security needs.
"No, we've allowed globalist greed to interfere with sound decision-making related to national security."
What are you talking about?
That's precisely the point!
These people are not us, and insofar as this regime has any Western characteristics at all it is in opposition to its people-the natives, not the millions of imported, non-Muslim workers-not because of them.
It is an unrepresentative, undemocratic, dictatorial monarchy, just like every other country in that region, with the exception of Yemen, which is an undemocratic, unrepresentative, quasi-military dictatorship.
This is why the Sabahs had to force women's suffrage through the parliament in Kuwait, which would have never passed it on its own initiative.
This is the problem with basing our strategic partnerships upon such flimsy pretexts as which despotic sheik or sultan or military caudillo happens to be in charge of a nation at any given moment in time.
"It is far better to be thought a fool, than to open your mouth and remove all doubt."
If this becomes law, the Supreme Court will eventually rule 9-0 to overturn it. It's a bill of attainder.
Lately, it seems there's always one behind me!!
You may have a point. Perhaps we are thinking in very simplistic terms, using the word "friends" when it comes to complex business or political arrangements between governments. Fine. But I don't think anyone is asking to shut Arabs, or Chinese, them out of ANY businesses in the country!... All we are saying is look, after 9/11, we have decided -- or, we are heavily under pressure from our ignorant constituents :) -- to keep direct control of any critical infrastructure/components that may put the US in danger... nothing personal. There are tons of other businesses they can invest in. Why is it that this idea of controlling our security doesn't strike me as outrageous?... I understand we are in a "Global Economy," etc, etc, etc... but does that mean, we have to sell EVERYTHING?... Should we outsource the CIA? :)
That is a good question. I understood that it was a "business" deal between Great Britain & The UAE. So, I'm confused.
LOL
and what about Boeing?
They will retaliate against us. Not militarily, that's suicide, but they will hit us where it counts as well, in our pockets and within our military.
Give in to threats??? WTF are you talking about? So it's blackmail a for a country to tell us we can't station thousands of troops and hundreds of ships within their borders? That's one of the silliest things I've ever heard on here, and that's saying a lot. If we decide that we aren't allies, and we can't trust any of them for something as trivial as this, primarily because of our own contempt for and suspicion of Arabs, then why in the heck should they let our military have the run of our country? Just because, I guess? Get a clue. We can't play this both ways, and I wouldn't if I were them either.
Just another note, perhaps you are not aware that Iran has no use for the maniacs who run these little dictatorships in the middle east, nor does osama have use for them. Nah, they need us and they need us badly, real badly
If the numbers stay the same, it will be veto proof.
In the interim, the president needs to appoint a point person (he needed to do that 3 weeks ago) to explain the facts to the public. It's the worst PR campaign I've ever seen.
Do you mean that in the context of the UAE reconsidering American surrogates having bombed Mecca on 9/11, and THEN changing their mind on our buying UAE ports?
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