Bush Administration OKs United Arab Emirates Company to Handle US Port Operations

What will the Dubai debacle cost us?

http://money.cnn.com/2006/03/10/news/international/pluggedin_fortune/index.htm?cnn=yes

Now the deal is done, it's time for American companies to face the economic consequences of politicians' public statements.
By Nelson D. Schwartz, FORTUNE Europe editor
March 10, 2006: 10:50 AM EST


NEW YORK (FORTUNE) - So the Dubai ports deal is done, a United Arab Emirates-owned company has backed down, and CNN anchor (and deal opponent) Lou Dobbs is going to have to find something else to talk about. But the after-effects are likely to be felt in boardrooms across America as well as on Capitol Hill and in Arab capitals from Riyadh to Bahrain and Cairo.

That's because while the decision Thursday by Dubai-based DP World to complete its takeover of the U.K.'s P&O while transferring or selling the U.S. operations may placate opponents on Capitol Hill, it's likely to worry major American exporters such as Boeing (Research), GE (Research) and other companies that see growing opportunity in the oil and money-rich Gulf.


"Our members are very concerned about what the failure of this deal means," says Bill Reinsch, president of the National Foreign Trade Council, a Washington trade association that represents large U.S. multi-nationals. "They haven't wanted to be visible but they're very concerned about the signals the U.S. is sending out."

Indeed, The Hill, a Washington newspaper that covers Congress, reported that Dubai's royal family is "furious at the hostility both Republicans and Democrats on Capitol Hill have shown toward the deal."

And with Boeing hoping to land a major order for its new 787 Dreamliner with Dubai-based airline Emirates down the road, the stakes are high. Elsewhere in the region, the UAE's Etihad Airways has already ordered more than $1 billion worth of 777s, and Egyptair and Royal Jordanian are longtime Boeing buyers.

"These are important customers for us in an important, growing market," says Boeing spokesman John Dern. "We are with these customers all the time. We haven't seen any impact at this point, and have no indication there will be an impact." Dern wouldn't say whether Boeing execs have specifically discussed the ports controversy with potential customers, but he notes that "we're certainly monitoring the situation."

Don't expect news of any public threats or cancelled orders to come from the Gulf in the coming days or weeks. "That's out of character for the Gulf states," says Reinsch. "It's more likely they'll just act, and suddenly a deal is off."

Reinsch adds he that the doesn't think opponents of the deal on Capitol Hill gave much thought to the possibility that blocking the deal could boomerang and end up hurting U.S. companies. "It's the law of unintended consequences," he says.

The biggest loser in the short-term, according to Reinsch, is the Bush administration, which has been trying to create a Middle East free trade zone modeled on NAFTA that would extend trade privileges with the United States to countries from North Africa all the way to Iraq by 2013.

Jordan and Morocco have already signed deals with the United States, and Bahrain and Oman are in the final stages of negotiations. "These countries are not without resources and they can't help but react negatively when they're thrust into this."

Now that DP World has given up, the action will likely move behind closed doors, far away from the media attention that made the controversy such a hot topic, especially on the cable gab-fests (including those on CNN, the parent of CNNMoney.com).

Companies like Boeing are likely to work their contacts in the region, and try to patch things up. And former Bush administration economist and American Enterprise Institute Fellow Phillip Swagel says the Gulf states should send emissaries to meet with outspoken port deal opponents like New York Senators Chuck Schumer and Hillary Clinton and explain to them the economic power of the Gulf region.

Not a bad idea but whether Schumer, Clinton and other politicians understand the economic consequences of their public statements, rather than the political benefits, is another matter.

 

The funny thing is this: while Americans continue to reap the benefits of free trade and free market capitalism, they have no earthly idea as to how it works and a hard time understanding that in a global economy, countries/people will reciprocate the treatment you give them.

Well, at least now the Arab World knows what the American public and their lawmakers think of them.

 

http://www.chron.com/disp/story.mpl/ap/politics/3713429.html

Abizaid Criticizes Port Deal Opponents

WASHINGTON — Gen. John Abizaid, the top U.S. commander in the Middle East, took an unusual step for a military leader Thursday, criticizing opposition to the attempted purchase of some U.S. port operations by a Dubai-owned company, calling it "Arab and Muslim bashing."

Abizaid, a grandson of Lebanese immigrants, and other military officials were asked about DP World's withdrawal from the deal as they left a briefing of lawmakers on Capitol Hill.

He said the United Arab Emirates, of which Dubai is a part, is vital to the military's stake in the Persian Gulf region. The Navy heavily uses the port there.

"I am very dismayed by the emotional responses that some people have put on the table here in the United States that really comes down to Arab and Muslim bashing that was totally unnecessary," Abizaid, who just returned from Iraq for meetings in Washington, told reporters.

The deal was widely opposed by lawmakers of both parties. DP World said Thursday it was dropping its effort to take over operations at several U.S. ports.

Abizaid speaks fluent Arabic and holds a masters degree in Middle East studies from Harvard. He is commander of the U.S. Central Command, which includes Iraq.

 

I'm curious, do any Chinese state owned companies control security for any of our ports? Remember how people reacted to the UNOCAL thing? I just don't see how this is an anti arab thing. It's an anti state owned companies thing.

 

Except DP World was never going to be "controlling security" at our ports.

 

Umm...no. It's an anti-Arab thing just like the UNOCAL firestorm was an anti-China thing. You must've missed Lou Dobbs' coverage of that whole controversy when it was ongoing.

 

With a 750 Billion dollar trade deficit, I would say we more than answer the question of who leads by example.

 

You do know the Arab World you speak is different than the one Americans perceive. I think the Arab World already gets it anyways.

 

"What will the Dubai debacle cost us?"

No one knows the consquences of what could have happened had terrorist found ways to weasel their way onto our ports and strategically push dirty bombs/other weapons in large cities lauching a huge assualt killing milllions.

Common sense should tell the rest of the world with a $750 billion trade deficit we are not protectionalist. The question should be i selling a few planes for a buck worth the risk of massive life lost.

 

DP was NOT going to handle the security, and those working in the port were almost certainly going to be the same people that have been working there in the past for that British company anyways.

 

There is absolutely no guarntee that Dp would keep the same port workers, let along the possbility of hiring undesirables that could lead the path to a cleverly designed scheme to compromise security. Your inability to comprehend the craftinest is a arrogance i do not share with this enemy. Bottom line is this deal increases risk.

 

Ok and we can make that same guarantee with some multinational American company? Look at the lack of screening done with airport screening workers? Practically anyone can get those jobs and the background checks are a joke. At this point they're hiring anyone and everyone who's willing to stare at a monitor. The idea that somehow American companies will do a substantially better job is laughable.

Secondly, the Dubai Ports World was NOT going to manage security. They were just in charge of managing port operations.

Third, our ports were never managed by Americans in the first place. A british company was the one managing till now.

 

"Ok and we can make that same guarantee with some multinational American company? Look at the lack of screening done with airport screening workers? Practically anyone can get those jobs and the background checks are a joke. At this point they're hiring anyone and everyone who's willing to stare at a monitor. The idea that somehow American companies will do a substantially better job is laughable."

You prove my point. This is already a bad situation, this deal further increases risk.

"Secondly, the Dubai Ports World was NOT going to manage security. They were just in charge of managing port operations."

Like you stated, security is already weak. A nasty combination for disaster with a craft enemy that can exploit this weakness and now use an entry point to get into our ports.

"Third, our ports were never managed by Americans in the first place. A british company was the one managing till now"

Who said they weren't? I missed where I stated otherwise.

 

Well, it's not Halliburton...


Carlyle Group Explores Acquisition of Port Operations

By Ben Hammer
The Washington Business Journal

Friday 10 March 2006

Private equity firm The Carlyle Group established a team to acquire public-purpose facilities such as ports a day after a United Arab Emirates company said it would transfer newly acquired operations at American ports to a U.S. organization.

D.C.-based Carlyle Group announced an eight-person team would invest in public-purpose infrastructure projects such as ports, transportation and water facilities, airports, bridges and stadiums. The team will begin work March 13.

The new infrastructure team had been planned for six months, but the Carlyle Group decided Thursday to launch it.

DP World, a company owned by the United Arab Emirates, acquired a British company that manages operations at six U.S. ports, but the House Appropriations Committee voted 62-2 on March 8 to prevent it from taking control of the ports.

DP World will transfer the operations to a "U.S. entity," Sen. John Warner, R-Va., said Thursday.

http://www.truthout.org/docs_2006/031406A.shtml

 

Why do you call them the enemy? Is every Arab person/company an enemy? I spend a lot of time in Dubai and work in the maritime sector and DP World has one of the best security records in the world. I have also personally met with the head of DP World and other executives of the firm and they are not anti-American and have worked very hard to support counter-terrorism initiatives at their port. I have also spent a considerable amount of time at the port in Dubai (Jebel Ali) and security is taken very seriously there. Just because the company is Arab doesn't mean they are all trying to kill us.

Please feel free to remove your blinders at any time . . .

 

Speaking of Port Security...

Moments ago, the House of Representatives narrowly defeated an amendment proposed by Rep. Martin Sabo (D-MN) that would have provided $1.25 billion in desperately needed funding for port security and disaster preparedness. The Sabo amendment included:

– $300 million to enable U.S. customs agents to inspect high-risk containers at all 140 overseas ports that ship directly to the United States. Current funding only allows U.S. customs agents to operate at 43 of these ports.

– $400 million to place radiation monitors at all U.S. ports of entry. Currently, less than half of U.S. ports have radiation monitors.

– $300 million to provide backup emergency communications equipment for the Gulf Coast.

Meanwhile, the Bush budget – which most of the members who voted against this bill will likely support – contains an increase of $1.7 billion for missile defense, a program that doesn’t even work.


http://thinkprogress.org/2006/03/16/port-security-funding/

Oh boy...

 

exactly mc. this whole dp world thing is a blatant use of xenophobia for cheap political gains. no one gives a damn about port security. its just arabs are bad people.

 

Yet they sit around, even the ones here in the USA and remain vastly mum on terrorism, voted against taking down Sadaam, and have no initiative to clean up the sickness that possesses that region. Now maybe they ALL don't want to kill us, but I'm certainly not sold that a FEW of them will try any way possible to wreck havoc AND those that witness these terrorist, JUST AS THEY ARE RIGHT NOW, will sit back and mind their own business and let evil enter this country. All it takes is a few bad apples, not the whole company. The people with blinders are the ones living in that mess who let terrorism grow to that degree. Prove to me their behavior has changed.

 

^ but its not like DP World's port operations were going to be run directly by the Dubai government and staffed with Arabs. DP World is a multinational company and the staff that run the ports would probably remain largely the same whether owned by a Dubai, British or US company. Anyway with multinational corporations even an American company could still potentially be infiltrated by terrorists or terrorists could get past security. Think about it this way though everyday flying into DC, NY and Boston are many planes from foreign even middle-estern carriers yet the planes that crashed into the WTC had American and United on them and not Air Egypt or Emirates.

Yes its true there are many problems with port and transportation security but that's not an issue of who owns them that's an issue regarding how they are regulated.

 

pray tell why you think those 'few sick apples' couldn't penetrate halliburton as well? halliburton im sure employees a few arabs too.