WASHINGTON, February 23, 2006 (IslamOnline.net) – The Bush administration is scrambling to rescue a deal giving a state-run Arab firm control of operations at six major US ports despite mounting opposition from several US lawmakers on security grounds.

"The president believes it is the right thing to do. We shouldn't be holding a Middle Eastern company to a different standard than a British company," White House spokesman Scott McClellan said Wednesday, February 22.

He said halting the deal would send "a terrible message."

McClellan described the United Arab Emirates as "a strong partner in the war on terrorism."

He said the two countries "work very closely with them," with military-to-military cooperation, intelligence sharing, and targeting terrorism funds.

A 6.8-billion-dollar deal reached on February 13 allows Dubai Ports World, a company based in the UAE and owned by the government of the emirate of Dubai, to acquire a British firm in a transaction that would also give it rights to operate six major ports in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The ports were run by the London-based Peninsular and Oriental Steam Navigation Co., the world's fourth largest port operator, with operations in over 85 ports in 19 countries.

A number of lawmakers, responding to an outcry by right-wing media outlets and talk radio shows, called for the Treasury Department to carefully scrutinize all security issues before control is turned over completely.

Some of them went as far as to ask the Bush administration to stop the deal, calling the Arab nation -- the third largest US trade partner in the Middle East -- lax in the so-called war on terror.

Unless US lawmakers prevent it, Dubai Ports World's acquisition of the British firm which currently manages the ports is to be finalized on March 2.

Bush has vowed to veto any legislation stalling the agreement.

His would be the first time since taking office in January 2001 that Bush used that presidential prerogative -- and it might lead the US Congress to override him.

Senator Menende has threatened to introduce a bill to ban the deal. (Reuters)

The opponents argue that the deal poses a threat to US national security.

Republican Representative Sue Myrick summed up the opposition with a curt letter to Bush on her Web site.

"Dear Mr President. In regards to selling American ports to the United Arab Emirates, not just NO -- but HELL NO!"

Senators Robert Menendez of New Jersey and Hillary Clinton of New York have threatened to introduce a bill to ban the deal altogether.

"We wouldn't turn the border patrol or the customs service over to a foreign government, and we can't afford to turn our ports over to one either," Menendez said.

Senator Vito J. Fossella, a Republican representing the New York City boroughs of Staten Island and Brooklyn, said the deal was inconsistent with US efforts to enhance national security.

"The lack of transparency has left many questions unanswered as to why the UAE would be granted control of United States strategic assets," he said.

Another senator said that Washington should not trust the government of the UAE, a confederation of seven emirates on the southeastern border of Saudi Arabia, especially that two of the alleged 9/11 hijackers were from the country.

"The question that needs to be answered is whether or not they can be trusted to operate our ports in this post 9-11 world," said Charles E. Schumer, a Democrat from New York. "The administration needs to take another look at this deal."

The protests come even though the deal has already been approved by the Committee on Foreign Investment in the United States (CFIUS), an official inter-agency committee chaired by the US Secretary of Treasury with a mandate to review foreign investments in the country on national security grounds.

Double Standards

"This could not only be an economic mistake but a foreign policy blunder," Griswold said.

But some analysts say the loud protests in Congress bring into question the US push for global liberalization and free markets, warning that it could actually backfire because of the US aggressive trade agenda in the Middle East.

"There are legitimate security questions to be asked but it would be a mistake and really an insult to one of our leading trading partners in that region to reject this commercial transaction out of hand," said Daniel T. Griswold, who directs the Center for Trade Policy Studies at the Cato Institute, a Washington-based libertarian think tank.

"This could not only be an economic mistake but a foreign policy blunder," he said.

Washington's trade relationship with the UAE is the third largest in the Middle East, after Israel and Saudi Arabia.

The two are engaged in bilateral free talks that would liberalize trade between them and would, in theory at least, allow companies to own and operate businesses in both nations.

The move further contradicts a forceful US thrust into the Arab world focused on greater openness and free trade.

The Bush administration has also proposed a Middle East Free Trade Area (MEFTA), which would link 22 Arab nations, Israel and the United States by 2013.

A free trade agreement between the US and Morocco went into effect on January 1, and a similar agreement with Bahrain was approved by Congress last December and is expected to take force this March.

Other trade agreements now exist between the United States and Israel and Jordan.

The same protectionist streak in Washington prompted US lawmakers last year to oppose a bid by the China National Offshore Oil Corp. to acquire the US oil company Unocal on national security grounds.

CNOOC finally dropped its effort and left the company to be bought by U.S. firm Chevron Corp.

The US has championed open markets in the developing world through its influence in international financial organizations like the Washington-based World Bank and the International Monetary Fund, the Geneva-based World Trade Organization, as well as through its political influence and aid programs.