Tuesday, November 9, 2010

There Will Be Landing Slots or War!!

Ok, the United Arab Emirates may not go that far, but it does seem to be the case that the focus on the state-owned airline is crowding out pretty much everything else.  First, the UAE kicks Canada out of its logistic base in Dubai--Camp Mirage.  Now, Canadians will need visas as of January 2011 to visit the UAE.  I guess a two month warning is progress over the month warning about Mirage. 

The NDP (left opposition party) is criticizing the Harper government for mismanaging this policy.  By what?  Submitting to the demands of the UAE to open up the market for potential Emirates domination?  Since the Emirates airlines have heaps of big planes and seem to be subsidized even more than normal airlines, Air Canada would face more than just a bit of pressure.  And Canada would be giving in on a contentious economic issue because another country is willing to destroy its relations with Canada?  Is that a good precedent to set?  I am not sure if saving Air Canada jobs is or should be the goal of Canadian policy?  But it makes little sense in the long term to allow the UAE to be successful in using very coercive strategies for such issues.  If they had nuclear weapons, would they use those to get preferential trade relationships?  Perhaps not, but the UAE is over-playing this, and there is little reason to reward them for it.

Canada is not alone in this as the Europeans and US are concerned about subsidies making the Emirates airline unfairly priced. But the Canada-UAE dispute is much more brutal than the average trade complaint.  The UAE seem to be willing to use all tools in their hands to coerce the Canadians.

The UAE folks may just want to think about other interests besides their airlines.  Their monomaniacal focus may work in the short term, but it is unlikely to benefit the country in the long term.

And the juxtaposition of the week: Canada and Denmark seem close to settling their dispute over Hans Island.* So, territorial conflict gets solved, trade conflict just gets deeper.  Is this bizarro International Relations, as territory is associated with most of the conflict (so my territorial conflict friends say)?

* Best part is there is a Hans Island Liberation Front website.  Somebody is being cheeky!

1 comment:

Chris C. said...

The UAE government really seems to be engaging in a bit of bizzare diplomacy here, but perhaps they're looking down the road at their revenue stream. Although Emirates is subsidized, it also brings in a fair chunk of hard currency. With the government's revenue from state-controlled utilities not expanding very much (although they have added speed and red light cameras everywhere), they're looking for keeping Emirates on top of what's become a rather competitive luxury airline market. But why pick on Canada? That just seems weird.