Vet The Deal But Go Forward
We are for a free market.
Last July, we criticized the Congressional pressure that ended the Chinese bid for Unocal, the US oil company. The worries of China’s sinister dominance over the world oil supply appeared hysterical and against the free market principles this blog upholds. Now, under the guise of national security, the United Arab Emirates purchase of P&O (the British company that manages U.S. ports) is being challenged by politicians for purported fears of unsecure ports should an Arab country assume ownership.
Some of us in this Think Tank worried:
I guess I just don't think they can be trusted...whether or not they are supposedly protected by the Coast Guard, Port Authority and Dept of Homeland Security...are those organizations 100% guaranteed to keep the bad guys out? I think not. Besides, I hear they only check something like 5% of the cargo. I can just hear it now (adapted from a caller I heard on the radio yesterday that works in the port in NJ)..."Oh, there is a language barrier...we need to hire people from the middle east who can understand us"...and then we have to believe they are OK...etc....
On the face of it there looks to be a square argument here. However, if the worry is minimal container checks, that can be improved. If it was so poor under British management, why can't this be changed.
Wrote Wayne Alder:
This seems to me to be a bit of a "mcguffin", i.e. something that seems like it is important, but really is not. This is about ownership of an operating company. Arabs will not be running the security of the port- We will by the appropriate agencies. They will be getting the profits from the operation of the port. But this is what we do in an open world market.
As always, the story behind the outrage tells all.
As reported by the WSJ:
The timing of this sudden uproar is also a tad suspicious. A bidding war for the British-owned P&O has been going on since last autumn, and the P&O board accepted Dubai's latest offer last month. The story only blew up last week, as a Florida firm that is a partner with P&O in Miami, Continental Stevedoring and Terminals Inc., filed a suit to block the purchase. Miami's mayor also sent a letter of protest to Mr. Bush. It wouldn't be the first time if certain politicians were acting here on behalf of private American commercial interests.
So it is protectionism of a US business that cannot compete fairly on a level playing field, it is the interests of union workers and typical political grandstanding that assumes the stage. This meeting of 3 interests, that do not care a fig about national security, have converged to raise this canard.
Meanwhile, there would be no lessening of port security. Writes the WSJ:
Dubai Ports World would be managing the commercial activities of these U.S. ports, not securing them. There's a difference. Port security falls to Coast Guard and U.S. Customs officials. "Nothing changes with respect to security under the contract," Defense Secretary Donald Rumsfeld said yesterday. "The Coast Guard is in charge of security, not the corporation."
In a telephone interview yesterday, Kristie Clemens of U.S. Customs and Border Protection elaborated that "Customs and Border Protection has the sole responsibility for the cargo processing and cargo security, incoming and outgoing. The port authority sets the guidelines for the entire port, and port operators have to follow those guidelines." Again, nothing in the pending deal would affect that arrangement.
When comparing the national security credentials of Donald Rumsfeld and George Bush against the national security credentials of trade protectionist Chuck Schumer and "shoot a bomb into the middle of the desert" Hillary Clinton, I feel safer knowing the administration backs this deal over the posturing of the usual suspects. Vet the purchasers and increase port security measures, something that has been needed anyway, but let the deal go through.