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.
Can't say I blame them.
And we probably have more enemies than we think. But it looks like the deal won't happen so we'll just have to let the chips fall where they may.
Ditto. V's wife.
I hope they do.
If our losers in the legislative branch think they are terrorists, why in the hell should they associate with us.
I don't blame the UAE at all.
"So why would these 'terrorists' allow our country to refuel our WAR VESSELS at their port and host an airbase that was used in the attacks on Iraq?"
Because the Royals gain our protection from their own home grown Islamic facists that they themselves perpetuate.
So what do you think about the Emir of Dubai's threats to end cooperation on the WOT and to evict U.S. military bases?
Why didn't they wait until after the 45-day review to start their blackmail campaign?
Yeah! Friends are supposed to allow you to screw them over, insult them and still be loyal to you. Oh wait....that's a doormat, not a friend. A friend is someone who has a right to mutual respect and trust. When that only goes one way, you're SUPPOSED to sever the relationship.
Certainly the muslim boycott against all things Danish is having a big impact.
Israel's economy seems to be doing just fine-even its tourist industry, believe it or not-and I don't think the Arab world is beating down its door to conduct trade deals, let alone asking to be given rights to some of its most vital national security assets.
Why didn't Congress wait until the 45 day review before they voted?
Since they are not, there is no point in answering it.
All you're trying to do is twist the facts and provoke a flame war and it isn't going to work.
It's the vision thing. Seeing the BIG PICTURE. A gift Jimmy Carter didn't have when he turned his back on the Shah of Iran and ushered in Islamofascism.
You sound like a mentally ill moron, comparing fellow freepers to Hamas. Stop the nonsense. Threats do not imply entitlement. A wife can threaten to stop baking cookies you until you start cooking dinner. That doesn't mean you were entitled to the cookies.
A cookie eating husband is not entitled to a wife's baked cookies.
The U.S. is not entitled to it's military using the port of Dubai as a staging area.
The above three statements are true. You are welcome to clarify your position, but if you disagree, then it is you who would take the same logical position as Hamas and it would be you who would sound like a dope.
If that is the case, why did the White House not say it? They seem to be their own worst enemy most of the times.
Disclaimer to anyone reading this: Rush gave it away first, not me.
"Let us bomb you or we will cancel our contracts for Boeing airplanes."
Sounds pretty logical from their point of view. Let's be happy and just go along with Arab Muslim logic to have access to our security, to our ports, to our people.
Look, here's the deal: they get American $$$ and they are forced to recycle them. They can put them in the bank where they may suffer currency risk, or they can buy things with them, like Boeing jets. They knew the risk on the P&O deal going in. It's not like they are just waking up to the risk they were taking -- the risk of stoking the anger of Americans at Arabs for the 3,000 dead on 9/11.
They could require Euro's which is just another way to give profit margins to a middle man. Or, they could p*** off the American military and force them to move their operations to Hungary, Iraq (remote bases), or other locations that want PROTECTION. If these weak kingdoms don't want our protection, tough s**-shitsky.
In short: they can go pound sand.
LOL! I was assuming the same thing.
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