Wednesday, March 01, 2006

The Ports, UAE, and Israel

Andy McCarthy at the The Corner expressed the opinion last week that one of the reasons to not approve the deal with the UAE is the fact that the UAE does not recognize Israel:
I would think it would be a condition precedent to being considered a good ally of the United States (in the war on terror or otherwise), and certainly to being entrusted with an important role in the operation of the ports (where we are vulnerable), that a country expressly acknowledge Israel's right to exist. The failure to concede Israel's right to exist can only sensibly be considered the equivalent of endorsing terrorist initiatives (such as the Intifada) to destroy Israel.

If the UAE, or any country, endorses – however passively – the proposition that indiscriminate bombing attacks against civilian targets can ever be legitimate, why should we allow such a country to be in a position to affect our border security? How could we consider it a good ally (even if it may be less offensive than a country like Iran)? I'm not saying we need to go to war with them, but why would we give them a place at our table?
Now it seems that the issue goes a step further. In an article for the Jerusalem Post, Michael Freund writes:

The parent company of a Dubai-based firm at the center of a political storm in the US over the purchase of American ports participates in the Arab boycott against Israel, The Jerusalem Post has learned.

The firm, Dubai Ports World, is seeking control over six major US ports, including those in New York, Miami, Philadelphia and Baltimore. It is entirely owned by the Government of Dubai via a holding company called the Ports, Customs and Free Zone Corporation (PCZC), which consists of the Dubai Port Authority, the Dubai Customs Department and the Jebel Ali Free Zone Area.

"Yes, of course the boycott is still in place and is still enforced," Muhammad Rashid a-Din, a staff member of the Dubai Customs Department's Office for the Boycott of Israel, told the Post in a telephone interview. [emphasis added]

There is a practical difference whether the issue is merely that the UAE does not recognize Israel or if it is part of the boycott as well. Freund notes that:

US law bars firms from complying with such requests or cooperating with attempts by Arab governments to boycott Israel.

But another Jerusalem Post article from yesterday claims that the boycott, even while in existence, is practically non-existent:

The Arab boycott, established by the Arab League in 1951 as an economic tool to hurt Israel, is a dying animal. Ask Aramex.
The company, which provides delivery services around the world, is commonly used by Arab and Israeli companies who want to exchange goods without upsetting any Arab port officials. The company provides customers with US mailing addresses where Israeli products can be sent. It then exchanges the Israeli postalstamped packaging for a US-stamped package and sends it on to its Arab destination.

So while some Arab ports will not accept goods marked "Made in Israel," if you take off the sticker and send it through another country, the deal is done.

"Besides Syria, the Arab boycott is now just lip service," said Doron Peskin, head of research at InfoProd, a consulting firm for foreign and Israeli companies specializing in trade to Arab states.

The question then might be whether the boycott, if it really is no longer really being followed, is really an issue vis-a-vis the US law forbidding dealings with countries abiding by the boycott.

But then there is an article that appeared on February 26 on Globes Online--2 days before the Jerusalem Post article by Freund (the one with the "exclusive" that the Dubai ports firm enforces the boycott), claiming that Dubai Ports World has strong business ties to the Israeli shipping company Zim Integrated Shipping Services Ltd.:

Asked in an interview last week with “CNN” reporter Wolf Blitzer whether Dubai Ports World was doing business with Israel while the UAE refused to recognize Israel, Bilkey replied, “One of our very sound customers is Zim line. It's the largest shipping company. And the president of that company is very close to our company and supports us, because we have good relations with all of our clients.

” We handle their operations in a number of ports throughout the world because it's good commercial business for us. They wouldn't come to us unless we did a good job,” added Bilkey.

Blitzer: “Does the emir know this?”

Bilkey: “Absolutely.”

So bottom line: the UAE does not recognize Israel and takes part in a boycott of Israel, but that boycott is not really being enforced anyway, and in any case the company maintains a business relationship with an Israeli company--and the Committee on Foreign Investments in the United is going to take 45 days to untangle this and other aspects of the deal.

More power to them.

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