Bush threatens veto in ports row

BBC News

US President George W Bush says he will veto any law blocking a deal giving an Arab company control of six US ports.

The threat came as Bill Frist, leader of the Republican Party in the Senate, said he would move a blocking law if the government did not delay the deal.

The issue has developed into a very serious political standoff between Mr Bush and senior Republicans, the BBC's Justin Webb reports.

The administration is to brief a Senate committee on the deal on Wednesday.

Administration officials will address an unusual session of the Senate Armed Services Committee on the planned takeover, which would put six of the largest ports in the hands of Dubai Ports World of the United Arab Emirates.

The ports are New York, New Jersey, Philadelphia, Baltimore, New Orleans and Miami.

Critics say this would make the US more vulnerable to terrorism.

The ports are currently run by British ports and shipping firm P&O, which has agreed a $6.8bn (3.9bn) takeover by DP World.

'Terrible signal'

President Bush said that the government had looked at the issue carefully and that he believed the deal should go ahead.

He called on opponents to explain why they opposed a Middle Eastern firm taking over when they did not oppose a British company being in control.

"I am trying to conduct foreign policy now by saying to the people of the world, 'We'll treat you fairly'," he said.

"It would send a terrible signal to friends and allies not to let this transaction go through," he told reporters.

Senator Frist, the majority leader in the Senate, said the deal "should be put on hold until the administration conducts a more extensive review of this matter".

It would send a terrible signal to friends and allies not to let this transaction go through

If it did not call a delay, he said he would introduce legislation to ensure the postponement.

Sen Frist is the most senior Republican and the most senior figure in the Senate to oppose the deal.

Senior Republicans believe Mr Bush should have paid more attention to the way the deal would be perceived in the US, our correspondent says.

Security risk

However, the deal has alarmed lawmakers from both parties.

Critics fear an increased risk of terrorist attacks, pointing out that the UAE was the home of two of the hijackers involved in the 11 September 2001 attacks.

Democratic Sen Charles Schumer of New York said: "This company is coming out of a country that has had a strong al-Qaeda presence.

"In this post 9/11 world, we cannot consider approving this contract until a much more thorough investigation takes place on this security matter."

The administration has rejected the concerns, saying the deal was thoroughly vetted.

Defence Secretary Donald Rumsfeld said: "Nothing changes with respect to security under the contract. The Coast Guard is in charge of security, not the corporation.

"We all deal with the UAE on a regular basis. It's a country that's been involved in the global war on terror."

P&O and DP World say they are confident the deal will go ahead, the latter insisting that security was "at the forefront" of its business.

Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/2/hi/americas/4737940.stm