----"Cut out the name calling."----
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.
Great. So we're supposed to dance to UAE's tune now? Heck, I thought we were the world's pre-eminent SuperPower. Guess not.
So you are one of those who thinks because someone disagrees with you they are ignorant? Sounds like a liberal to me.
Trouble is, we need to be helping strengthen the right side of things in that part of the world. The UAE royal family, like the Kuwaitis, DO push through democratizing measures to the extent politically feasible. They do not have absolute control over their populations and cannot be held responsible for the existence of a sizeable radical Islamic component, any more than the Bush administration can be held responsible for the existence of our homegrown radical anti-war movement. The question for the US, and for civilization is, at this point in time, are we better off with or without the UAE royal family in power? And the answer is most definitely WITH, because the available alternatives are clearly aligned with radical Islam. Any actions by the US government which would tend to weaken the control of the UAE royal family, would be strengthening the radical Islamic forces in the UAE. I'm afraid this storm of opposition to the ports deal is just giving ammo to the radical Islamists in their fight against the Western-sympathizing royals.
exactly, and the muslim kings who run this little dictatorships are not stupid.
Please avoid posting to me.
Do Iran in what way? Do you seriously think he's going to start another war with another Muslim country?
The "royal family".
I guess the same standards Grandpa Clampett is a King, in HIS own little world.
Are Islamic countries backward or what? Take away their money-without-work, and you've got Africa--lots of heat but no fire in the furnace.
Well said. These Bot-Squaders have suddenly co-opted the Dem's playbook of shutting down dissent with ad hominums and demonizing rhetoric.
Principle, secret back-room economic deals (see Dole and Clinton) are taking a back-seat to security and common sense...
You're equate that with STFU, as*hole, etc? LOL. If you do, you're a TAD oversensitive.
Who had any doubt that the enemy is the Party of Treason which many of the clueless here is blindly following and damaging National Security and the prosecution of the War on Terrorists? DNC is a much greater danger to the US than the UAE.
Businesses in free countries don't operate by making threats to withdraw support for the U.S. war on terror and to evicting the U.S. navy from their ports.
Of course we know that's how muslim businesses operate, but we aren't a muslim nation.
Thanks goodness the deal is dead.
No. Please avoid lying.
Lets get a few things straight, those usa bases were there to PROTECT UAE from Iraq. Dito the other pricipalities in the middle east. The UAE will fall without a security garrantee from the usa. I am begining to think the hell with the entire region, let them all behead one another.
How many times does it have to be stated:
THE PORTS ARE NOT BEING SOLD TO THE UAE!!!!
Was that loud enough for you to hear?
Now if you could find the money, by the way, you want, it will lead you to the UNIONS.
-Dan
He may win but it will come with a price.
It is clear there is not shortage of stupidity at FR though perhaps not as much as in Congress.
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