Bush says failed port deal sends bad message.

buttmunch · March 10th, 2006, 11:45 AM

Quote:

(CBS/AP) President Bush said Friday he was troubled by the political storm that forced the reversal of a deal allowing a company in Dubai to take over operations of six American ports, saying it sent a bad message to U.S. allies in the Middle East.

Mr. Bush said the United States needs moderate allies in the Arab world, such as the United Arab Emirates, to win the global war on terrorism.

The president said he had been satisfied that security would be sound at the ports if the Dubai deal had taken effect.

"Nevertheless, Congress was still very much opposed to it," Mr. Bush said. He made his remarks to a conference of the National Newspaper Association.

"I'm concerned about a broader message this issue could send to our friends and allies around the world, particularly in the Middle East," the president said. "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.

"UAE is a committed ally in the war on terror. They are a key partner for our military in a critical region, and outside of our own country, Dubai services more of our military, military ships, than any country in the world.

"They're sharing intelligence so we can hunt down the terrorists. They helped us shut down a world wide proliferation network run by A.Q. Khan," the Pakistani scientist who sold nuclear technology to Iran, North Korea and Libya, he said. "UAE is a valued and strategic partner."

Meanwhile, the Dubai-owned company that pledged to surrender its $700 million worth of U.S. port businesses amid a furor on Capitol Hill wants to guarantee it doesn't lose money on the deal. But now that DP World is out of the political frying pan, it could find itself confronting a fire sale of its American assets.

Faced with unrelenting pressure from Congress, Dubai's ruler said DP World will transfer to an unspecified American company all U.S. port operations it acquired when it paid $6.8 billion for London-based Peninsular & Oriental Steam Navigation Co.

CBS News senior White House correspondent Bill Plante reports the announcement came about after the company's consultations with White House political strategist Karl Rove.

In its statement, DP World said its decision was based on the understanding that it will have time to coordinate the complex transfer and that "DP World will not suffer economic loss."

But experts believe it's unlikely DP World can sell its newly acquired U.S. business for $700 million, given the political pressure to quickly hand over those operations to an American company. They warned this could become an expensive case of buyer's remorse.

"It does seem like they're unloading this in the equivalent of a fire sale," said William Reinsch, president of the Washington-based National Foreign Trade Council and a former senior Commerce Department official.

When DP World offered a stunning $6.8 billion for Peninsular & Oriental in early February, analysts were surprised the price had risen so high during the two-month bidding fight between Dubai and Singapore-owned PSA International Ltd. PSA, the world's fourth-largest terminal operator, withdrew from bidding Feb. 10.

The British firm manages and runs important port operations in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia. It also plays a lesser role in dockside activities at 16 other American ports.

I think the bad message he's hearing is that nobody is buying his lies and bs anymore.

SVZ · March 10th, 2006, 11:46 AM

does this man think?

buttmunch · March 10th, 2006, 12:03 PM

Apparently not. At least, I haven't seen any evidence yet that he does.

Glasgow53 · March 10th, 2006, 12:14 PM

I think he really believes he is invisible, and he can make all kinds of sneaky deals behind people's backs and not get found out. He is the president, for god's sake, people tend to watch what he does (mostly in horror).