Another Dubai deal, another security row

[Sarge]

Here we go again.

http://atimes.com/atimes/Middle_East/HD19Ak02.html

Another Dubai deal, another security row

In a deal similar to one that led to the Dubai ports furor in the US earlier this year, Dubai International Capital has purchased for US$1.24 billion Doncasters Group Ltd, a private British aerospace manufacturer that works on sensitive weapons programs such as the Joint Strike Fighter (JSF).

The administration of US President George W Bush is conducting a security review of the takeover, and then it will present its findings to Congress, where many of the same factions that

expressed concern and outrage over the ports deal are beginning to grumble about the Doncasters takeover.

Democrats and Republicans alike lambasted the Bush administration's approval of the sale of British P&O Line to Dubai Ports World, since it would place terminal operations of six US ports in foreign hands - worse, in the hands of a government that many in Congress labeled as being an unreliable partner in the "war on terrorism". The failed ports deal forced Washington to postpone talks with the United Arab Emirates on a free-trade agreement. The proposed pact is part of a greater US goal to create a Middle East Free Trade Area by 2013.

The White House and others that support deals with the UAE warn that restricting trade over putative security concerns would turn away investors in Arab states awash with petrodollars and ultimately harm the US and global economies. However, Dubai seems to have taken the matter in stride. In a conciliatory move, Dubai Ports World agreed to sell its stake in US port operations, which allows the firm to turn its attention to more profitable port operations in emerging markets, such as India.

During a visit to Washington, Sheikh Lubna al-Qasimi, minister of economics in the UAE, stated, "We are long-standing allies of the United States. Our relations are larger than that. This is global trade." US trade with the UAE has increased steadily in recent years, punctuated by major deals involving Boeing, ExxonMobil and Lockheed Martin.

While not yet garnering much attention in the media, certain Congress members have challenged the proposed Doncasters deal. Two members of the House Armed Services Committee, Democrats John Barrow and Ike Skelton, have raised questions about national security.

"I'm not against foreigners investing in this country as long as we don't sell them something we are not supposed to sell them," Barrow said. "But I am concerned about selling off our national-security infrastructure. We are selling off the military-industrial complex bit by bit."

The $250 billion F-35 Joint Strike Fighter program is intended to create a next-generation stealth fighter that would replace several current strike aircraft. While most of the jets will be used by the United States, other countries such as the United Kingdom, Italy, Australia, Canada, Denmark, Turkey and Norway also intend to purchase the aircraft. The JSF is scheduled to be operational by 2009.

As was the case with the ports deal, Democrats will surely capitalize on another opportunity to paint Republicans as being weak on national security as the mid-term congressional elections draw near. Republicans, despite controlling both the House of Representatives and Senate, are increasingly finding themselves on the defensive, caught between a White House mired in political scandal and poor approval numbers and emboldened Democrats looking to regain control of Congress.

The Doncasters deal will certainly fall under increased scrutiny in the coming weeks. After the Dubai Ports World debacle, the Bush administration will find itself at the center of another complicated national-security debate that will go beyond party lines and standard economic discourse. However, an expensive, experimental weapons project will likely elicit a less visceral public reaction than did the issue of port security.

Lawmakers must decide whether to embrace economic nationalism or uphold the free-trade principles that they typically champion. While Dubai has ostensibly looked past the criticisms raised in the failed ports deal, a similar outcome in the current matter could very well scare away foreign investors, Arab and otherwise, and signal that the United States is not necessarily open for business.