A powerful House of Representatives committee has voted overwhelmingly to block Dubai Ports World from managing six US ports, moving closer to a showdown with the White House over the deal.
In a 62-2 vote, the House Appropriations Committee on Wednesday approved a budget bill amendment that would prevent DP World from acquiring control of US port operations now held by Britain's Peninsula and Oriental Steam Navigation Co. Legislators from both major parties held that the deal would threaten US security.
But Republican House Majority Leader John Boehner branded it a "big political problem" that squeezes legislators facing elections in November between voters largely opposed to DP World and the White House's vehement support for the company.
The amendment declared that "the acquisition of any leases, contracts, rights, or other obligations of P and O Ports by Dubai Ports World or any other legal entity affiliated with or controlled by DP World is hereby prohibited and shall have no effect."
That could block the 6.9-billion dollar deal DP World is currently pursuing to take over P and O, which holds contracts to manage six major US ports.
The administration of President George W. Bush reiterated its support for the take-over early Wednesday, and has promised to veto any Congressional bill to block it.
The amendment, appended to an emergency spending bill providing funds for military operations in Iraq and Afghanistan, could come up for full consideration in the House next week.
While support for the amendment appears strong in the overall House, Bush's arguments have held more weight in the Senate, where Republican leader Bill Frist has taken steps to stall legislation on DP World backed by the opposition Democrats.
In his proposed amendment, Democratic Senator Charles Schumer argued that the Dubai government, which owns DP World, has taken political positions at odds with US foreign and security policy.
"No company, wholly owned or controlled by any foreign government that recognised the Taleban as the legitimate government of Afghanistan during the Taleban's rule between 1996-2001, may own, lease, operate or manage real property or facilities at a US port," the Schumer bill proposed.
Despite Frist's procedural moves to block DP World bills, Senate Democrats vowed to keep pushing the issue.
"It's going to continue to be brought up until these Republicans in the majority face the reality," said Senator Dick Durbin.
Meanwhile, a group of US business executives in the United Arab Emirates said on Wednesday that they would travel to Washington in late March to lobby Congress to support the DP World deal.
"A delegation will go this month to educate politicians on relations between the UAE and the United States," said Kim Childs, executive vice president of the Abu Dhabi-based American Business Group.
"The UAE is a reliable and trustworthy partner and one of our closest allies," she said.
The conservative Wall Street Journal on Thursday slammed Republican congressmen supporting the amendment blocking the port deal for making "a political sacrifice to Democratic criticism."
"Let's hope the world's investors conclude that this is a craven, one-time political surrender, rather than the start of an attempt to politicise every foreign investment in America that can be linked to 'national security.'
"If it's the latter, we're all in for some heavy economic weather, and Republicans won't believe how low their approval ratings can go," warned the editorial.
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