19 February, 2006

US firm sues to block foreign port takeover

Firm sues to block foreign port takeover


WASHINGTON -- A company at the Port of Miami has sued to block the takeover of shipping operations there by a state-owned business in the United Arab Emirates. It is the first American courtroom effort to capsize a $6.8 billion sale already embroiled in a national debate over security risks at six major U.S. ports affected by the deal.
. . .
The Miami subsidiary, Continental Stevedoring & Terminals Inc., said the sale to Dubai was prohibited under its partnership agreement with the British firm and "may endanger the national security of the United States." It asked a judge to block the takeover and said it does not believe the company, Florida or the U.S. government can ensure Dubai Ports World's compliance with American security rules.
. . .
The lawsuit represents the earliest skirmish over lucrative contracts among the six major American ports where Peninsular and Oriental runs major commercial operations: New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.
. . .
The sale, already approved by the Bush administration, has drawn escalating criticism by lawmakers in Washington who maintain the United Arab Emirates is not consistent in its support of U.S. terrorism-fighting efforts.
. . .
Caught by surprise over the breadth of concerns expressed in the United States, Dubai is cautiously organizing its response. The company quietly dispatched advisers to reassure port officials along the East Coast, and its chief operating officer - internationally respected American shipping executive Edward "Ted" H. Bilkey - is expected to travel to Washington this week for meetings on Capitol Hill and elsewhere.

The Bush administration in recent days has defended its approval of the sale, and has resisted demands by Congress to reconsider.

At The Emirates Economist I have more to say here and here. The scope of the blogosphere's attention is shown in this graphic.

My prediction: If nothing else, the attention the deal is receiving in the US will greatly increase what people there know about the UAE. It is common for American to confuse the UAE with the UAR, or to assume it's part of the KSA. The present kerfuffle may reduce those misconceptions, but at the same time create a distorted understanding. There is a world-stage public-relations silverlining if and only the UAE is proactive and forthcoming.

Dubai is also receiving attention at The National Standard in relation to a financial prize to Kofi Annan.

UPDATE: Starling Hunter provides a fair and balanced roundup of the ports story. He concludes
My other hunch is that someone is going to explain it all to the lawmakers pretty soon and that this story will blow over rather quickly. This is not the stuff of which a "gritty film-noir" or even a Michael Moore documentary is made.


Anonymous said...

It's always about the 'attention'...


grapeshisha said...

Completely on the money with this. I previously voiced an opinion that the media here has not stood up to defending the UAE on this. And you are right, this is a prime opportunity to educate and inform. But the issue is this: if UAE does not step up, we will be resigned in many people's eyes to always being associated with terrorism, 9/11 and the radicals. At a time where racial and religious tensions are also high, this is the time to step up and be heard. It is interesting to note that Abdullah bin Zayed has already spoken on the matter, but that will get completely lost in the political rhetoric if we do not provide weight in numbers.

No matter how much you may moan on the rigours of daily life, is this not the time to stand tall and defend the place you were either born or have chosen to live? Can the UAE bloggers sway opinion here? Or do we resign ourself to hoping that Dubya and Condoleeza Rice can best defend the UAE?

Slagothor said...

In a perfect world, the UAE would be loudly declaring things like:

- we arrested and imprisoned every radical in the country after 9/11

- mosques and imams are closely monitored for any "radical" words or actions

- the population is strongly encouraged to keep a keen eye on their neighbors and report any suspicious behavior to the police

- we have US air bases in this country

- we buy military equipment and donate it to the Iraq army

- we pay for training of the Iraq army

- we cooperate fully with US-led terrorsit investigations

- we have cleaned up our banking laws to the point that they are stricter than most

- acts of terrorism hurt us more than you because we rely on trade and the free movement of people. Terrorism makes those things more difficult, and us poorer.

All of these things should be said loudly and clearly. However, I wonder if the UAE is a bit reluctant to make their case so clearly because doing so may invite retaliation from al-Qaeda.

So far, the only thing the opponents are able to muster is old and meaningless tripe like "several of the 9/11 hijackers traveled through the UAE" or "money was transfered through their banks". Of course, these statements are true about Germany, or, for that matter, the US.

The critics have nothing solid to base their case on. They are pandering to anti-Arab bigotry. Unfortunately, with the daily scenes of mobs burning western flags and calling for the murder of cartoonists, there is plenty of anti-Arab feeling in the US to be exploited.

Tim Newman said...

Tim Worstall has covered this, likening it to the failed Chinese takeover of Unocal.

We could also look at the political opposition to Mittal's attempted purchase of Arcelor for more misguided protectionism.

The P&O bid should stand or fall on business concerns alone, and to hell with political concerns.

J. Edward Tremlett said...

" If nothing else, the attention the deal is receiving in the US will greatly increase what people there know about the UAE."

Yeah, but all they're hearing is accusations of "ties" to terrorism.

So much for the tourism dividend!


Slagothor said...

Here's the latest (and craziest) assertion:



"It's unbelievably tone deaf politically at this point in our history, four years after 9/11, to entertain the idea of turning port security over to a company based in the UAE who avows to destroy Israel," Graham said on "Fox News Sunday."

That's Republican Senator Lindsay Graham, someone who I had previously believed to have an ounce of sense.

I'm looking forward to the next update, where we'll no doubt hear about how the local rulers enjoy killing kittens, or some such thing.

John B. Chilton said...


Yes. Saw that Lindsay Graham quote. That and the rest of what he said is here:

FOXNews.com Transcript

You'll have to scroll down to get the ports bit. Note that he must have heard himself and realized it wasn't good party politics b/c he softened his language in the rest of the interview.

Hillary Clinton, Jr. Senator from NY, isn't far removed. See my posting at The Emirates Economist.

Slagothor said...

We've heard a lot of vague, dodgy rhetoric from the likes of Schumer, Coburn, Fossella, Menendez, King, Clinton, etc ("transit point"; "one of only three governments to recongnize the Taliban"; "is seeking a free-trade deal with Iran"; "money laundering centre"; "2 hijackers came from there") - none of it was technically false. Indeed, they were well selected political weasel words, designed to sound like something was being said without really saying anything.

Graham's assertion of "UAE avowing to destroy Israel" is the first staight-up falsehood I have seen come from the US in this affair.

I definitely see a Unocal strategy at work here: try to gum up the process so much that the other party just walks away from the deal in frustration, because I don't think the pols in question have any real power to stop this deal - I believe that writing retro-active laws is against the rules in the US. The worst that could happen for DPW is a divestiture of the US ports.

Back the point, I really wish the UAE would make a more assertive defence, instead of just trying to work the backrooms.

I would invite all these guys over here, first class on Emirates, pay them an honorarium to give a speech on "national security" or something, put them up in the Burj, give them a bucketful of gift certificates for Wafi and Bur Juman, Cuban stogies, food at Souq Madinat Jumeirah, and maybe some auxiliary services from those nice freelance Russian ladies. No good politician will be able to say no to a junket like that :-)

Anonymous said...

"I would invite all these guys over here, first class on Emirates, pay them an honorarium to give a speech on "national security" or something, put them up in the Burj, give them a bucketful of gift certificates for Wafi and Bur Juman, Cuban stogies, food at Souq Madinat Jumeirah, and maybe some auxiliary services from those nice freelance Russian ladies."

Thanks for the suggestion. But we've already started on that. See Chilton's link further down the same post on that little "prize" Kofi Annan received.

It'll do our reputation tons of good.

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