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Last Updated: Friday, 10 March 2006, 23:35 GMT
Bush warns over port row 'signal'
New York port
New York is one of the six key ports embroiled in the dispute
President George W Bush has said opposition in the US to a deal giving a Dubai-based company control of six US ports sends a bad signal to allies.

Mr Bush said the United Arab Emirates was a "valued and strategic partner" in the US-led war on terrorism.

Dubai Ports World has agreed to cede control of the ports to a "US entity" after an outcry from lawmakers worried the deal would harm national security.

Meanwhile, US-UAE trade talks set for Monday have been postponed.

Officials from both sides downplayed the delay and said it was unrelated to the ports row.

Spokeswoman for the US Trade Representative's Office Neena Morjani said both sides were committed to the free trade talks but needed "additional time to prepare for the second round of negotiations".

The US and the UAE have been discussing a free trade deal since March 2005.

Congress opposition

Mr Bush told a conference of the National Newspaper Association that the US needed allies like the UAE.

I'm committed to strengthening our relationship with the UAE
President George W Bush

"They are a key partner for our military in a critical region, and outside of our own country, Dubai services more of our military, military ships, than any country in the world," he said.

Mr Bush added: "In order to win the war on terror we have got to strengthen our friendships and relationships with moderate Arab countries in the Middle East."

But the president admitted Congress was "still very much opposed" to the deal.

Dubai Ports World is taking over P&O, which currently runs the ports. Lawmakers have threatened to block the takeover on security grounds.

They have called for a comprehensive review of ownership of key transport assets, despite the concession from Dubai Ports World.

The company has not explicitly said it will sell the subsidiaries responsible for US ports, although the White House has suggested that this will be the end result.

Trade experts agreed with Mr Bush that the Dubai Ports World saga would set a damaging precedent for other Middle Eastern firms planning to invest in the US.

"It is just assuming that if a company is from the Middle East it is de facto disqualified from investing in the United States, and I think that is a terrible message to send," said Daniel Griswold, director of the Cato Institute's Centre for Trade Policy Studies.

It has now emerged that a second Dubai-owned firm is already providing shipping services in the US.

The other company - Inchcape Shipping Services (ISS) - has been owned since January by the United Arab Emirates investment firm Istithmar.

ISS, whose clients include the US Navy, has had extensive interests in the US for many years.

It arranges pilots, tugs and dock workers for shipping companies and works with the US Customs to ensure the smooth arrival and departure of vessels at ports such as New York, New Jersey and San Francisco.


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See the container ports at the centre of the controversy



SEE ALSO:
Second Dubai firm in US port link
10 Mar 06 |  Business
Dubai firm to 'transfer' US ports
10 Mar 06 |  Business
Q&A: US row over Dubai Ports
09 Mar 06 |  Business
Congress sets up fight with Bush
09 Mar 06 |  Americas
Court of Appeal backs P&O's sale
06 Mar 06 |  Business
High Court clears P&O's takeover
02 Mar 06 |  Business


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