July 12, 2013
Credit: Bill Burke/PageOne
When George W. Bush’s administration approved a proposal in 2005 by a Dubai ruling family-owned company for an acquisition that would have given Dubai Ports World control over shipping operations at six major U.S. ports, the American public and Congress rightly raised sharp concern that the U.S. government had failed to recognize the national security risks. Ultimately, public opposition sank the deal. Now, it appears that the Obama administration is poised to make a similar misjudgment. This time, the U.S. airline industry is the target, and it is the nation’s economic competitiveness that is at stake.
The U.S. Department of Homeland Security (DHS) is working to establish a U.S. Customs and Border Protection (CBP) facility at Abu Dhabi International Airport in the United Arab Emirates (UAE). This facility would be the first expansion of the U.S. pre-clearance program since 1986 and the first such facility in the Middle East. While the U.S. operates many CBP pre-clearance facilities, they are without exception at airports served by at least one U.S. airline and where a large percentage of the passengers cleared through the program continue their trip with a ticket on a U.S. airline. Each of the current facilities, located in Canada, Ireland and the Caribbean, clearly uses U.S. resources to benefit the U.S. airline industry and its workers.
In dramatic contrast, a pre-clearance facility at Abu Dhabi International Airport would exclusively benefit Etihad Airways , the UAE’s national carrier, because no U.S. airline currently operates at the airport . Providing Etihad’s customers with the opportunity to clear U.S. Customs while still in the UAE would give the state-backed airline a winning convenience to offer as it competes against U.S. airlines to attract passengers flying to the U.S. from Asia and the Middle East. Moreover, in the context of across-the-board budget cuts and already long Customs clearance lines for passengers arriving in the U.S., the UAE facility would further drain existing resources and create more difficulty for U.S. airlines’ own passengers to clear Customs .
The idea of laying out U.S. taxpayers’ money to help foreign airlines better compete against U.S. carriers is hard to swallow, particularly in times of deep budget cuts, but the fact that Etihad already does business with significant advantages over U.S. airlines rubs salt in the wound. Etihad operates free of corporate taxes in its home country. With its state backing, it has funds to fly large, new, fuel-efficient, widebody airliners that are attractive to customers. And, it is eligible to purchase these airplanes with below-market financing rates courtesy of the taxpayer–funded U.S. Export–Import Bank.
The success of Abu Dhabi’s airline is a national priority for the UAE because it forms a crucial component for the strategic pursuit of economic diversity in the face of limited oil reserves. Oil makes up just 5% of the GDP of neighboring emirate Dubai, while aviation makes up 28%.
Following the failed ports deal, UAE leaders learned their lesson. They have sought to win the hearts of Americans by investing their immense wealth in philanthropic projects across the U.S. And, make no mistake, it is an investment. While the soccer fields, hospital facilities and school supplies that the UAE has given to U.S. residents have certainly helped those in need, those gifts have also helped advance the UAE’s strategic goals of turning U.S. public opinion in their favor and strengthening its state-backed airlines’ reach into new U.S. markets.
The approval of the Dubai Ports World deal set off a firestorm of questions from Congress about whether U.S. officials had conducted the necessary review of the deal ‘s implications for U.S. national security , particularly given the UAE’s record on terrorism, which one senior senator characterizes as “dubious.”
DHS resources and CBP facilities and services should first and foremost benefit U.S. travelers, U.S. airlines and their employees and the U.S. economy. More than 150 members of Congress have written to the White House objecting to the Abu Dhabi pre-clearance facility plan, and once again Congress is engaging in vigorous oversight of an administration policy that inappropriately benefits the UAE . Action from Congress is needed to overturn this misguided Abu Dhabi pre-clearance facility and prevent any similar project, in order to advance U.S. economic competitiveness in the face of unfair and heavily state-backed foreign airlines . Congress should make it clear that the Abu Dhabi preclearance facility is the wrong port of call.
Lee Moak is president of the Air Line Pilots Association. The U.S. group is the world’s largest pilots union.