At first glance it looks just like what South Carolina Republican Sen. Lindsey Graham called it: an “unbelievably tone-deaf politically” decision.
The Committee on Foreign Investment in the U.S., a government interagency panel, signs off on allowing a company owned by the government of Dubai, second-largest of the seven United Arab Emirates, to buy the company that handles operations at six U.S. ports? In this post-9/11 era, do we want an Arab-owned company running port terminals in New York, New Jersey, Philadelphia, Baltimore, Miami and New Orleans?
The deal seems wildly counterintuitive, but perhaps we should step back a bit to see whether what sounds absurd really poses a threat.
The short answer is there are legitimate reasons for concern, but rejecting this arrangement out-of-hand because an Arab government owns the company should not be automatic and could undermine positive developments in the Arab world.
Although we have not yet seen terrorist attacks, or strong evidence of weapons or other tools of terrorism coming in through U.S. ports, those ports are certainly potential entry points that bear watching. The United States has concluded agreements with most major foreign ports to tighten up inspection and paperwork for cargoes originating elsewhere and bound for this country. But still only one in 20 cargo containers is inspected in most U.S. ports.
That said, beyond following rules laid down by government agencies, Dubai Ports World, the company seeking to buy the contracts to handle operations at these six ports, would not be handling port security if this deal goes through. Security, for better or worse (it’s some of both) is handled by the U.S. Coast Guard and U.S. Customs. That won’t change.
The company now operating the ports, P&O Ports, is a British company, so there has been foreign ownership for a while. Most of those who actually work at the ports are U.S. citizens, and that would probably not change. And you can be sure the relevant unions will look after workers.
This situation should have been handled differently in terms of Congress and the public. Given the existence of the Committee on Foreign Investment in the U.S., one can understand the need for closed meetings to review many proposed transactions that involve proprietary information. But the committee should have understood, better than most, that U.S. ports are different from, for example, ball-bearing factories or shopping malls and pose a much different concern for all Americans.
Congressional hearings or a longer process are still appropriate. We should remember, however, that Dubai is in many ways an example of what the administration says it wants to encourage — a moderate, mostly secular Arab regime that has opened up its economy and achieved prosperity and stability.
To reject its purchase could, as Cato Institute trade scholar Dan Griswold said, “send some dispiriting signals to the Arab world” and discourage the kind of reform most Americans desire.
So let’s look at this deal more closely.
But let’s be prepared to accept it if there’s no evidence it will harm U.S. security interests.