March 8, 2006

US-UAE trade at risk from ports deal: business group

By Will Rasmussen

ABU DHABI (Reuters) - Trade worth more than $8 billion
between the United States and the United Arab Emirates could be
jeopardized if a Dubai ports deal is blocked, an American
business group said on Wednesday.

U.S. lawmakers, citing national security concerns, are
seeking to halt state-owned Dubai Ports World from taking
control of six major U.S. ports as part of its $6.85 billion
takeover of British port-operating company P&O.

But the American Business Group of Abu Dhabi (ABG), in the
United Arab Emirates (UAE), said blocking the deal could make
Arabs hesitate before putting money in the United States.

The group, which has no affiliation with the U.S.
government, also said it would send a delegation to Washington
this month to lobby 120 members of Congress. ABG members
include U.S. business people in the UAE as well as local
representative offices of large U.S. firms.

"If the deal is blocked on terms that aren't consistent
with a due diligence process, that sends a loud and clear
message to our friends that maybe they should rethink
investments in the U.S.," said Kim Childs, ABG executive vice

"We deeply regret what appears to have been an uninformed
rush to judgment by some opponents of the transaction, as well
as inflammatory language that some have adopted," she told
reporters in the UAE capital Abu Dhabi.

Among the deals that could be threatened is a $1 billion
contract by a U.S. company for an early warning system in the
UAE, ABG members said. They did not name the company.

Like all other Gulf Arab states, OPEC-member UAE is a
staunch U.S. ally which has cooperated closely with
Washington's post-September 11, 2001 war on terrorism.

U.S. Navy ships regularly dock in UAE ports, including
those managed by Dubai Ports World.

U.S.-UAE trade reached $8.6 billion in 2005 and the two
countries are currently negotiating a free trade agreement.

The ports deal has unleashed a political firestorm in the
United States, prompting the Bush administration to allow an
additional 45-day review even though it had approved it.

U.S. President George W. Bush has threatened to veto
legislation that attempts to block the deal, but on Tuesday,
Republicans in the House of Representatives moved to halt it by
attaching an amendment to must-pass spending legislation for
Iraq and hurricane relief.

Board member Kevin Massengill, a retired U.S. Army officer,
said ABG would pressure lawmakers to block the amendment.

"We hope to arrive roughly in the first half of the 45-day
review period and inject some rational thoughts into the debate
early in the process," added David Scott, another board member.

ABG said it would be hosted by John Warner, a Republican
senator from Virginia, and would seek to meet over 120 members
of Congress, including Sens. Robert Menendez of New Jersey and
Hillary Rodham Clinton of New York, who have led Democratic
opposition to the deal.