Dubai firm to give up stake in some U.S. ports
Updated Thursday, March 9 2006 11:33 PM ET
CTV.ca News Staff
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A Dubai-based firm says it’s going to transfer its management stake in six U.S. ports to an American entity after a U.S. political showdown over foreign ownership of the ports.
Dubai’s DP World had arranged to hold the rights to the ports as part of its takeover of Britain’s P&O Steam Navigation Company. In Canada, DP World operates the Port of Vancouver.
But the U.S. takeover ran into fierce opposition from some lawmakers who wanted the deal stopped because they saw it as a potential security risk.
U.S. President George Bush defended the deal on the grounds of open and free trade, and because he said the United Arab Emirates had become a strong ally in the war on terror.
Both the House and Senate seemed ready to block the original deal, and the president said he was prepared to veto any decisions stopping it from going forward.
But on Thursday, DP World said it was changing its position on owning the ports, and would transfer ownership to a U.S. entity.
The company issued a press release with its new position.
“Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship, DP World has decided to transfer fully the U.S. operation of P&O Operations North America to a United States entity,” DP World’s chief operating officer, Edward H. Bilkey, said in the statement.
The statement didn’t say which U.S. company would be involved in the deal, or how the deal would work. The company indicated that details are still being worked out.
It’s not immediately known if DP World’s new position will be enough to stop momentum in Congress in favour of passing laws blocking the deal.
The company’s move comes a day after a Republican-controlled House committee voted 62-2 to block the deal.
In the Senate, DP World’s latest position on managing the ports was read out on the Senate floor. Soon after it was announced, Democratic Senator Charles Schumer, a main critic of the deal, said he was cautious.
“This is obviously a promising development, but the devil’s in the details,” Schumer said. “Those of us who feel strongly about this issue believe that the U.S. part of the British company should have no connection to the United Arab Emirates or DP World.”
Democrats in the Senate have demanded a vote on the issue. Republicans have been trying to prevent one, but admit they’re on the political defensive.
“I admire what the House did,” Senate Democratic Leader Harry Reid, D-Nev told the Associated Press. “They said we know the president feels strongly about this. We know he said he’s going to veto this. But we’re going to do it because we think we have an obligation to our constituents.”
Republican congressional leaders told President Bush on Thursday that both the House and Senate seemed ready to block the takeover.
The President had threatened to veto a decision by Congress if it chose to block the company’s involvement, but the White House has recently been trying to soften its stand on the issue.
“Our emphasis is not on trying to draw lines or issue veto threats. It’s on how we can work together and move forward,” said presidential spokesman Scott McClellan.
“It doesn’t mean the President’s position has changed, it means our emphasis is on how we can work together to move forward.”
House Speaker Dennis Hastert, a Republican, said the leaders had told President Bush they want to protect the American people by blocking the ports takeover. “We will maybe have our differences, but we think we’re going to continue to do that,” the speaker told reporters.
Laila Al-Qatami of the American-Arab Anti-discrimination Committee said the debate is motivated by upcoming elections for the senate and congress.
“No one wants to look soft on national security,” Al-Qatami told CTV’s Mike Duffy Live.
“One of the things when this came out was Americans were very concerned because the way it was being presented was that this company would then be controlling the security of the United States, and there are a number of members of congress who were saying, well, we’re giving up America’s sovereignty. That’s really not the case here.”
“This is a global company that operates, and operates well. It would be operating in Canada. It already operates in Germany and Australia, in Hong Kong. It is a well known company. It’s financially stable and secure.”
“There is a lot of Arab investment that is already here in the United States totaling billions of dollars,” Al-Qatami said. “So if we start saying we don’t want companies doing business here, who at the end of the day is going to be hurt by that? It’s the U.S. economy that’s going to be hurt by that.”
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Dubai firm to give up stake in some U.S. ports