- The Washington Times - Wednesday, March 29, 2006

American companies operating in the United Arab Emirates say they fear losing business if the United States rejects any more Arab investments like the DP World deal.

The Bush administration and Congress currently are scrutinizing a second deal involving the purchase of Doncaster Group Ltd. — a British aerospace company that owns nine American plants that manufacture parts for its tanks and military planes — by Dubai International Capital, another UAE company. The deal is under a special national security review to determine whether it would jeopardize U.S. interests.

“It takes a long time to develop relationships. One bad choice and all that trust goes away,” said Kim Childs, an American equipment manufacturing executive working for one of 600 U.S. companies that she said do business in the UAE She and other members of the American Business Group of Abu Dhabi met with editors and reporters at The Washington Times yesterday.

For now, UAE officials are “willing to give America the benefit of the doubt” and view Congress’ rejection last month of the DPW deal as a one-time “internal political issue,” said Ms. Childs, the executive vice president of the Abu Dhabi business group.

“They’ve gone through this thrashing in the U.S. media. They continue to cooperate with the U.S. military in the Gulf. They’re not fair weather friends,” said David V. Scott, an oil company executive also with the group.

But most likely the U.S. will lose out on future deals for 50 new civilian aircraft and big-ticket power-generation equipment being sought by the UAE if Arab investors are subjected to any more “meaningless stress and tension,” he said.

Boeing aircraft and General Electric Co. are likely to be the victims of any such retaliation, he said.

“You can’t keep poking somebody in the eye,” he said. “We support a rational discussion” about the security implications of Arab investments in the United States. “But we don’t want to see free trade thrown out the window in the name of national security.”

Robert Lunday, a defense company executive, said he found it ironic that Congress rejected UAE ownership of several U.S. port operations at the same time that the U.S. is selling major, sensitive weapons systems to the Arab country.

“I was disappointed that the average American jumped into something and didn’t have the facts,” he said.

The danger is that Arab businessmen who are friendly to the United States and interested in investing their money here will begin to think “you can’t do business with these guys,” he said.

The executives noted that the Dubai company’s takeover of port operations in Britain did not generate anywhere near the public and legislative furor in that country, in part because a court there found that the “evidence was woefully thin” that it would harm Britain’s national interest.

Arab countries find greater acceptance in Britain and other European countries, they said, perhaps because of historic colonial relationships that enable them to “know each other better.”

About 70 percent of Arab country purchases from the West are from European Union companies, and many analysts think the U.S. port incident will increase the Arab preference for European and Asian products over American goods.

The American businessmen said the UAE purchased $8.5 billion in goods from U.S. firms last year — making it a bigger export market than India, despite its tiny population of less than 1 million. The U.S. has a $7 billion trade surplus with the country — making it one of only three nations in the world that buys more products from Americans than Americans buy from it.

“They are a very tolerant society, very open,” allowing Christians as well as Muslims to practice their beliefs, said Jane Wiegand, a lawyer based in Dubai. “We feel safer there than on the streets of many cities in America.”

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