On February 13th, DP World, a ports operator owned by the government of Dubai, a small but economically ambitious member of the United Arab Emirates, paid $6.8 billion to acquire P&O, a British firm which runs a global network of maritime terminals. With P&O came six American ports – Miami, Philadelphia, Baltimore, New Orleans, New Jersey and New York.
There has been a hullabaloo in America ever since the contract was signed. A slew of politicians are trying to block the deal. They include Robert Ehrlich, the Republican governor of Maryland, Jon Corzine, the Democratic governor of New Jersey, Chuck Schumer, a Democratic senator for New York, and Pete King, the Republican chairman of the House Homeland Security Panel.
They’ve been backed by presidential hopeful Hilary Clinton, for the Democrats, and George Pataki, the Republican governor of New York. All are proposing emergency legislation to block the deal before completion, which is due on Thursday. Sadly, in this highly politicised spat, the Bush administration’s response has been muddled, as Irwin Stelzer pointed out in the Business pages of the Sunday Times yesterday.
There are numerous technical reasons for opposing the takeover, but the opposition rallies most noisily around the threat of American ports being owned by a foreign government. This, the dockworkers’ union says, it what scares its members most. It is also the line being taken by families of the victims of 9/11. For an Arab state to own American ports would, the argument goes, be contrary to national security interests.
On the face of it, this is a legitimate fear. If inspections were lax, weapons of mass destruction could be smuggled into the country. And Dubai is well known as a crucible for contraband drugs and arms. Jon Corzine, a former chairman of investment bank Goldman Sachs, said: ‘Dangerous men, tainted blood money and nuclear technology have moved across UAE borders.’
However, quite apart from the fact that DP World is a globally respected firm with an American chief operating officer, Ted Bilkey, and an American-educated chairman, the company would not own the American ports and it is difficult to see what its incentive would be to run them badly. Added to which, American coastguards, customs and immigration people would remain fully responsible for homeland security.
Another reason for being cautious to stymie DP World is that there could be negative geopolitical consequences of telling a friendly Arab state that it’s unwelcome in the States. Investors in China, Russia and elsewhere in the Middle East might well decide to put their money elsewhere. Economic autarky would bring about higher interest rates, too, which could impact on the growing national debt across the Atlantic.
Can anyone tell me if in Britain we have any bodies like the Treasury’s Committee on Foreign Investment in the United States (CIFUS), a multi-agency body set up in 1975 to consider the national security implications of foreign acquisitions? Although it recommended the acquisition go ahead, it is representative of the US's vigilance. And what does anyone else think about the economic, national security and geopolitical implications of this, not only for America but also for Britain?
On a different note, Dispatches this evening should be worth watching. Peter Hitchens is presenting a programme entitled ‘Stealing Freedom’. Channel 4, 8pm.
Comments (1)
This is just another case of American pot calling kettle black. They advocate free trade, as long as it doesn't impact American business. They are content to see foreign businessmen made responsible for investments in their country through use of extradition, yet preven emerging and competing nations from entering the market (Chinese textiles or shoes, Arabic port authorities).
Although twentieth century America has always incorporated some elements of protectionsim (Sherman anti-trust laws, Immigration controls of the 1920s and beyond), the growth of the American economy has been down to it's continued cultural expansion overseas once the domestic market became saturated. It's time they repaid that favour to the rest of the world and opened their own markets to more stringest international competition.
Posted by Dave Harris | February 28, 2006 4:08 PM
Posted on February 28, 2006 16:08