Many members of Congress and the media have stressed that this deal compromises our national security, arguing that the Treasury Department under President Bush uses too narrow a definition of national security. President Bush has proven his commitment to national security over the past five years and has made it obvious that he would not allow the deal to go through if it compromised our national security. If Congress, which has sent the American public mixed messages on national security, feels that we need to put more effort into national security, they should first work to improve their own scorecard.
As for the port deal, all aspects relating to national security will remain the same as they currently are with the London-based P&O Company: the Coast Guard, U.S. Customs, port authorities, and local police agencies will be responsible for inspecting all cargo and overseeing the safety of the six ports; U.S. Customs inspectors will continue to run pre-loading inspections of targeted cargo in more than 45 ports abroad; DP World will be required to show records about foreign operational direction of the design, maintenance, and operation of the ports and equipment; and the company will also be required to participate in U.S. security programs to stop smuggling and detect illegal shipments of nuclear materials. There were only two concessions made to DP World that were not extended to P&O: (1) it would not have to keep copies of business records on U.S. soil and (2) it would not have to designate an American citizen to accommodate U.S. government requests. These concessions in no way constitute a threat to our national security and do no justify Senator Schumer, Senator Graham, Senator Kerry, or Senator Frist’s concerns. These and other members of Congress have lost sight of the fact that the greatest question facing the United States today has two parts; we cannot look at national security alone.
In terms of global trade, the six ports in question process more than 2.25 million shipments (TEUs) per year, with approximately $148.5 billion worth of cargo. Interrupting the operation of these ports for political reasons – even temporarily – would have a terrible effect on our quality of life in the U.S. and a horrible ripple effect across the world: U.S. bound ships would be stuck in ports overseas, those ports would be unable to let other ships enter due to lack of space, the cargo on these ships would not make it to its final destination and perishable cargo would go bad.
Legislators in the U.S. have to accept the fact that we operate in a global economy and that our actions affect the rest of the world. All of their talk about passing a bill to prevent foreign management of U.S. ports is rubbish only meant to impress their constituents with talk of national security. If Congress passes a law forbidding the management of seaports by foreign-owned companies, 30% of U.S. port terminals will be disrupted, as will all of our ports along the West Coast. More than 30 ports in the U.S. are managed by foreign countries – including China, Japan, Singapore, and South Korea – with more than 7,500 ships making at least 51,000 calls per year into their harbors.
If the U.S. passes a law prohibiting the management of U.S. seaports by foreign-owned companies, the world will see it as a negative message about our attitude towards the global economy. The fact that we have made such a debacle over the Dubai purchase – just two months after discussions of opening markets and a leveling the playing field for international commerce at the WTO meeting in Hong Kong – alone gives foreign investors reason to question the value of investing in the U.S. As a friend of mine recently pointed out, “free trade is not an a la carte menu - you are either committed to the principle or you are not.” The U.S. has thrived because of its commitment to free markets, and it cannot turn back on the idea now. The P&O deal is the embodiment of a healthy functioning free market: the bid could have just as easily been won by PSA of Singapore or Hong Kong’s Hutchison Whampoa. Anyone should be able bring their capital to America and invest; our quality of life depends on it.
Congress has five steps to take with regards to the Dubai deal in order to show that it has the capacity to handle the greater issues of trade and security:
While the port issue may only be the topic of the day, I think it does much to highlight the greater issues facing the United States today. Legislators should allow the Dubai deal to go through for now and then spend the next several years working to make changes to our security policies. This is not a decision that can be made in 2 weeks – or even 45 days – without greatly influencing our trade and foreign relations.
