Port Call

From a national security and political perspective; it would appear to be a no-brainer; faced with mounting criticism from both sides of the aisle, the Bush Administration is expected to quietly pull the plug on the deal that would let a Dubai-based company run operations in six major U.S. ports. Just today, the Republican governors of New York and Maryland threatened legal action to prevent the United Arab Emirates Firm (Dubai Ports World) from managing port operations in New York City and Baltimore. Their threat is indicative of the political firestorm that is growing over the port issue.

While the White House has described the United Arab Emirates as an important ally in the War on Terrorism, the Dubai government has a less-than-sterling record in tracking terrorist operatives and commerce. One of the 9-11 hijackers--who flew a jet into the south tower of the World Trade Center--was born and raised in the UAE, before emigrating to Saudi Arabia. There are also indications that nuclear and missile technology may have passed through Dubai, enroute from North Korea to Iran. The UAE even bought SCUD missiles from Pyongyang, in defiance of international sanctions against such transactions. While Dubain was supposed to be punished for the SCUD deal, the Clinton Administration overlooked that transgression when it agreed to sell advanced F-16s to the UAE (more on that in a moment).

So why not cancel the deal, and avoid giving the left some badly-needed, election year ammunition in the political battle of homeland security? Unless the deal is scrapped, the administration will find itself in the akward position of appearing weaker on port security than, say, Hillary Clinton and Charles Schumer. At this point, one would assume that GOP powerbrokers are leaning on the White House to cancel the agreement.

But it's not that simple. Cancelling the port deal could mean the end of U.S. basing rights in the UAE, strained relations with other regional partners, and the potential loss of a key defense contract, all viewed as critical in fighting the War on Terror. Collectively, those factors probably explain why the deal hasn't already been nixed, and why the Bush Administration may put up a fight--even with political allies.

Let's beging with the basing rights issue. U.S. military forces--particularly Air Force units--have been using airfields in the UAE since the start of Operation Desert Shield back in 1990. Bases in the UAE are viewed as particularly important for potential military operations against Iran, given their proximity to disputed islands the Persian Gulf, and the Strait of Hormuz. Flying from bases in the UAE, U.S. fighter-bombers would have only a short hop to targets in Iran, allowing them to maintain constant pressue on Tehran's military forces and political leadership. The presence of large numbers of tactical aircraft in the UAE would also make it easier to keep the strait open, and reduce Iran's ability to restrict the flow of oil to the global market. If the White House cancels the port deal, Dubai may end its basing agreement, and greatly complicate our military strategy in the region.

Overturning the port deal could also create other problems in the Persian Gulf. Cancellation of the contract would be viewed as an insult to the UAE and its leadership; regional critics would accuse the U.S. of hypocrisy--anxious to utilize UAE bases and sell its defense hardware to the Dubai, but unwilling to let a UAE company manage operations in U.S. ports. Such criticism, in turn, would cause other Gulf allies to question Washington's long-term committment to the region, and make it more difficult for the U.S. to sustain basing rights in such countries as Qatar and Bahrain. In fact, the loss of basing in the UAE would probably force the U.S. to approach Qatar, Kuwait and Bahrain to take in more U.S. personnel, a potentially tough sell in the wake of a cancelled port deal between the Dubai and Washington. U.S. basing in Qatar is viewed as extremely critical, since the Gulf nation is home to a multi-billion dollar Air Operations Center, that is used to direct combat operations in the region.

Finally, striking down the port deal would mean likely curtailment of the sale of U.S. F-16s to the UAE. Back in the late 1990s, the Clinton Administration signed an agreement to sell 80 F-16s to the UAE, at a cost of roughly $8 billion. The UAE F-16s (Block 60 models) are most sophisticated version of that fighter ever produced, with capabilities beyond those of USAF F-16s. Sale of the F-16s was viewed as essential in continuing U.S. basing agreements in the UAE, and a major economic plum for the state of Texas, where Lockheed-Martin builds the F-16. The UAE deal came at a time when F-16 production was winding down; the U.S. and other countries had essentially completed their purchase of the F-16, and the assembly line was facing closure until the UAE deal came along. Lockheed hopes the UAE contract can stimulate other F-16 purchases, possibly by other Gulf States or possibly India. In economic terms, the UAE F-16 deal means literally billions of dollars and thousands of jobs in the President's home state.

Brit Hume of FNC has predicted that the White House will quietly cancel the UAE port deal a few weeks from now, after the initial furor has died down. But I'm not so sure. The military stakes are enormous, and the economic consequences (through the F-16 sale) are significant as well. Cancelling the port deal may solve political and security issues here at home, but it will also create significant problems in the gulf region, at a time the White House can ill afford them. It's a tough call, but one the President has to make--and soon.