The Port Deal is Dead

CNN is reporting that the United Arab Emirates holding company has agreed to turn over its U.S. ports operations to "an American entity." Republican Senator John Warner of Virginia revealed the apparent compromise a short time ago, in a statement read on the Senate floor. According to Warner, the UAE company, Dubai Ports World, agreed to turn over its U.S. ports operations to "preserve the strong relationship between the Emirates and the United States."

At this point, details of the agreement are sketchy. It's unclear if DPW has pulled out of the deal altogether, or has established some sort of U.S.-run subsidiary, which would manage American port operations for the UAE firm. The move came after Congressional leaders told President Bush that the Dubai ports deal appeared "dead" on Capitol Hill.

Critics of the deal will hail the decision as a "victory" for homeland security, and they may be right. Despite reassurances from the White House, the Pentagon and the UAE, there were too many unanswered questions about the UAE firm's potential access to port security plans, and potential infiltration by terrorist elements. Without clear answers to those questions, it was difficult, if not impossible, for most GOP lawmakers to support the deal.

But it's also important to note that the UAE decision will also have immediate ramifications among U.S. allies in the Persian Gulf region. Loss of the port deal is an embarassment for the Dubai government, and will renew accusations that the U.S. values its gulf partners only as a source for oil, and as potential bases for American military forces.

Basing rights are a critical consideration, particularly with the Iran threat looming on the horizon. The U.S. military--and in particular, the U.S. Air Force--has maintained an active presence in the UAE since Operation Desert Shield in 1990. Maintaining those basing rights may be tougher in the long run, with Dubai bowing out of the port deal. Bases in the UAE would be vital in any military campaign against Iran, given the Emirates' proximity to the Strait of Hormuz, and key Iranian facilities near the Persian Gulf. The Iranian threat is probably the only thing that would prevent the UAE from "downsizing" our military presence in their country, in reaction to today's decision.

Today's developments will also be carefully scrutinized in countries like Qatar, Bahrain, Kuwait and Oman, other key players in our regional security plans. Yesterday's Congressional votes (which essentially killed the port deal) sent a clear signal about our homeland security concerns. But it may also send the wrong signal to key U.S. allies in the Gulf Region, at a time when we need their support on pressing issues, including Iraq and Iran. It's also a sure bet that Iran will try to exploit the situation, by making new overtures to its neighbors, while highlighting the "unreliability" of the U.S.