The United Arab Emirates (UAE) is forcefully asserting itself into US politics with a record-setting lobbying effort to drown out critics both foreign and domestic.
The Arab World's second-largest economy spent $12.7 million last year to silence challengers to its ruling families and preserve its world-beating airline industry. After an initial public relations campaign to burnish its image following the 2006 Ports World debacle, the UAE spending spree has soared to new heights over the past few years as the Gulf power has gotten bolder.
Top of mind is the protection of its Open Skies agreement with the United States, which has come under attack from struggling US airlines that accuse the UAE’s Emirates and Etihad airlines — along with Qatar Airways — of receiving unfair subsidies. The industry is vital to the UAE’s strategy of diversifying beyond oil and gas to become a global travel hub and tourism destination — a plan that’s already well on its way after Dubai International Airport surged ahead of London’s Heathrow to become the world’s busiest airport last year, with almost 69 million passengers.
US President Barack Obama's administration launched an open forum in April for stakeholders to weigh in as it ponders its next move. Weeks later, more than 250 House members of both parties in April signed on to a letter calling on the Obama administration to seek official consultations.
“We are concerned that Qatar and the UAE are using these subsidies and other unfair practices to distort the market in favor of their state-owned airlines, contrary to US Open Skies policy,” reads the letter to Secretary of State John Kerry and Transportation Secretary Anthony Foxx. “These actions artificially boost these state-owned carriers and undermine the principles of open competition essential to the airline industry.”
Burned by the attacks on Ports World a decade ago, UAE officials and businesses have pushed back hard.
The carriers have launched a joint campaign to challenge US airlines’ methods and motives. They can count on a $5 million-a-year assist from the Harbour Group, which has been lobbying for the UAE since 2009 on trade and national security issues.
The emirates have also spent big to get the United States on board their global campaign against the Muslim Brotherhood. Concerned about challenges to their authority post-Arab Spring, the UAE’s rulers labeled the Muslim Brotherhood and a host of other Islamist groups as terrorists back in November.
Over the past year, Abu Dhabi’s Outlook Energy Investments LLC has relied on its $6.1 million-a-year contract with former Treasury Department officials at the Camstoll Group to turn the heat on Qatar for playing host to Hamas and other Sunni Islamists. The strategy has succeeded in helping flood right-wing US media with stories denouncing Doha, while ironically shining a spotlight on the UAE’s behind-the-scenes role.
The UAE has also discreetly kept an eye on the congressional debate over the Export-Import Bank, according to lobbying filings by Akin Gump Strauss Hauer & Feld. Congress allowed the bank’s authorization to expire in June, but the Senate voted on July 27 to revive it.
The UAE and its airline industry has been a top beneficiary of the export subsidies, with almost $6 billion in loans and guarantees over the past five years, according to an analysis by Al-Monitor. And the Dubai Economic Council in 2013 signed a $5 billion nonbinding agreement, obtained by Al-Monitor through a Freedom of Information request, calling for the bank to help finance future infrastructure projects.
“I would assume that governments from around the world — not just the UAE — are expressing an opinion behind the scenes, letting people know how important the bank is,” US-UAE Business Council President Danny Sebright told Al-Monitor. “But it might be seen as impolitic for any government to come out … openly and publicly."
The UAE is also well-placed to benefit from the nuclear deal with Iran.
Obama promised during his Gulf Cooperation Council summit in May to beef up US military support to Gulf countries that feel threatened by Iran. And unlike its big brother, Saudi Arabia, the UAE eyes the deal as a golden opportunity to further tap into the region’s largest untapped market once sanctions are lifted.
The UAE has also earned US kudos for taking the fight to the Islamic State. Its decision to field female fighter pilots, in particular, has earned the relatively progressive emirates priceless public relations around the world.
The bilateral ties only go so far, however.
UAE strikes against Islamists in Libya have been met with reprobation from the State Department, which favors a negotiated political settlement. And the Department of Defense has rebuffed the emirates’ request for new F-35 Joint Strike Fighters, in part because of concerns they would erode US commitments to preserve Israel’s “qualitative military edge.”
"I do not anticipate any near-term sales for the F-35 in the region," Frank Kendall, the Pentagon's acquisitions chief, told reporters in Abu Dhabi in February, according to Reuters. "I think it would be a very sensitive sale to try to bring about for a lot of reasons."