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Ports Deal Aftermath ; Bush Says Failure of Deal Could Hurt Efforts to Recruit Allies in War on Terror

Posted on: Sunday, 12 March 2006, 09:00 CST

By Jennifer Loven

President Bush said Friday the collapse of the Dubai ports deal could hurt U.S. efforts to recruit Mideast governments as partners in the worldwide war on terror.

Separately, in what may have been an aftershock to the failed transaction, a new round of trade talks between the U.S. and the United Arab Emirates was postponed.

Dubai Ports World, based in the United Arab Emirates, backed away from the deal Thursday in the face of unrelenting criticism and announced it would transfer its management of port terminals in major U.S. cities to an American entity.

Bush struck a defiant tone Friday with the Republican-led Congress whose new willingness to buck him has taken its most dramatic form with the ports controversy.

The president said he was open to improving the government's method of reviewing such transactions, but he insisted that his administration's approval of the ports deal had posed no security risk and that the reversal could have the opposite effect.

"I'm concerned about a broader message this issue could send to our friends and allies around the world, particularly in the Middle East," he told a conference of the National Newspaper Association.

"In order to win the war on terror, we have got to strengthen our friendships and relationships with moderate Arab countries in the Middle East."

The United Arab Emirates is just such a country, Bush said.

Dubai services more U.S. military ships than any other country, shares useful intelligence about terrorists and helped shut down a global black-market nuclear network run by Pakistani nuclear scientist A.Q. Khan, the administration says.

However, the State Department's annual human rights report this week called the UAE's performance "problematic," citing floggings as punishment for adultery or drug abuse.

The president said he would now have to work to shore up the U.S. relationship with the UAE and explain to Congress and the public why it's a valuable one.

"UAE is a committed ally in the war on terror," he said.

On her way to a presidential inauguration in Chile, Secretary of State Condoleezza Rice echoed Bush. The failed ports deal "means that we are going to have to work and double our efforts to send a strong message that we value our allies, our moderate allies, in the Middle East," she said.

Thursday's action spared Bush an embarrassing showdown with Congress, which he seemed likely to lose, over the veto he had threatened of any bill blocking the transaction.

After weeks of questions from lawmakers in both parties about whether giving a state-owned company from an Arab country control of significant port operations could increase terrorist dangers, the silence from Republicans on Friday was telling.

The only statements came from Democrats who sought to keep the issue alive.

Sen. Charles E. Schumer, D-N.Y., a chief critic of the Dubai deal, said lawmakers needed more detail on DP World's planned divestiture. It wasn't clear which American business might get the port operations, or how the U.S. entity would be related to the Dubai government.

"Make no mistake, we are going to scrutinize this deal with a fine tooth comb," Schumer said.

The Democratic Party planned a mobile billboard in Memphis, Tenn., where GOP activists were gathering for a weekend conference, accusing Republicans of standing in the way of providing enough funding for port security. "Republicans owe the American people answers as to where they really stand," said party spokesman Luis Miranda.

Republicans, too, have said the deal's end does nothing to address the nation's continuing vulnerability at its ports, where the vast majority of shipping containers are not inspected.

Work continued on Capitol Hill on two fronts: reworking the process under which the government approves foreign investment and boosting port security.

Sen. Susan Collins, R-Maine, chairwoman of the Senate Homeland Security Committee, promised a committee vote by the end of April on legislation to strengthen cargo inspections and port security. Rep. Dan Lungren, R-Calif., was readying a nearly identical measure for the House. Both bills have Democratic co-sponsors.

Rep. Peter King, R-N.Y., chairman of the House Homeland Security Committee, called for changing the secretive process in which the Committee on Foreign Investments in the United States considers security risks of foreign companies seeking to buy or invest in American industry.

He said the changes should make security as important as the now- dominant financial considerations.

He said this could likely be accomplished by making the Homeland Security Department the lead agency. Without getting into specifics, the White House said Bush would be open to such reforms as well as to giving Congress additional oversight.

Source: Buffalo News

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