US won't push to privatise Dubai Ports World

WASHINGTON — US trade officials have no plans to push for the privatisation of state-owned Dubai Ports World in free trade talks with the United Arab Emirates, the US Trade Representative's office said.

By (Reuters)

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Published: Sat 4 Mar 2006, 9:34 AM

Last updated: Sat 4 Apr 2015, 3:27 PM

Dubai Ports World's takeover of the global assets of Britain-based P&O — including in ports such as New York and New Jersey — unleashed a political firestorm over the past two weeks. The uproar prompted the Bush administration to agree to an additional 45-day inquiry into national security concerns raised by the deal after initially approving the deal.

A bill introduced in the House of Representatives by Rep. Clay Shaw, a Florida Republican, and Rep. Ben Cardin, a Maryland Democrat, would prohibit foreign government-owned companies from operating US seaports.

The United States has not raised the issue of privatising Dubai Ports World in the first four rounds of negotiations on the proposed trade pact and does not expect to raise it in future, said Christin Baker, a spokeswoman for the US Trade Representative's office.

The United States has been negotiating a free trade pact with the UAE since early 2005 and will hold another round of talks with the Gulf nation of seven emirates in March.

Although many US lawmakers have objected to the ports deal on the grounds that the UAE has a weak record on fighting terrorism, some have also focused on the Dubai emirate's ownership of the port operations company.

Cathy Novelli, former chief US negotiator for the UAE talks, said the United States typically does not push for privatisation of state-owned companies in free trade talks.

"What it does press for is fair treatment," said Novelli, who is now a partner at the Washington law firm of Mayer, Brown, Rowe and Maw. "Whether or not a particular entity is state-owned isn't that relevant" as long as US companies are given a fair opportunity to compete, she said.

Government ownership of Dubai Ports World is less of a concern than negotiations on customs rules to ensure that US goods entering the country move quickly and are treated in a fair manner, Novelli said.

Novelli said she was hopeful the United States would be able to conclude an agreement with the UAE, it's third largest trading partner in the Middle East.

"There are a lot of very compelling reasons why this is in the interests of the emirates and the United States. Those reasons don't go away just because you have a problem on one investment deal," she said.

But David Hamod, president of National US-Arab Chamber of Commerce, said the ports controversy made the free trade negotiations "immensely more complicated."

"The detractors in the UAE are saying 'see we told you so. The United States is lecturing us on opening our borders for goods, services, capital, ideas and people and yet at the very same time, there's a strong, let's say almost anti-Arab protectionist message coming out of Congress,'" Hamod said. He also said he would not be surprised if Dubai Ports World is eventually privatised.

"If you look at many of the success stories in the Arab world, they're companies that started out at the state's initiative and when they are strong enough to stand on their own two feet, they privatised," Hamod said.



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