Where the ports have no name

The only national security crisis here is the one lawmakers want to create themselves.

Darren Bernard

Sen. Chuck Schumer’s bright decision last week to liken Arabs to “skinheads” pretty well sums up the alarmist opportunism U.S. lawmakers used to kill the Dubai ports deal. But in case you thought the chest pounding on Capitol Hill over the forsaken deal was finally done, think again.

If you direct your attention to the Senate and House, lawmakers are swooning over dozens of bills that drastically would change requirements for U.S. infrastructure ownership and rules concerning the review process of foreign investments. The idea, apparently, is to prevent another group of foreign “skinheads” from investing in America, as the daring Dubai government tried to do.

Of course, there was never a security threat in the original deal, which should have taken effect earlier this month. The arrangement planned to give the government-owned Dubai Ports World control over the commercial operations of six U.S. ports as a result of its acquisition of a British firm. Instead, thanks to security concerns voiced in the venerable U.S. Congress, Dubai Ports World now promises to sell the operations to an American-owned bidder.

Make no mistake, letting a Dubai-owned firm operate some ports poses no threat to national security, and Congress knows it. Port security, regardless of whether the commercial side is operated by an American, a British or a Dubai firm, is always in the hands of the Coast Guard and customs officials. That Dubai Ports World keeps its headquarters in an Arab nation is irrelevant; the firm has a spotless record as the current operator of commercial ports from Germany to South Korea.

Of all endorsements, Israel’s largest shipping line sent a letter to Sen. Hillary Clinton, D-N.Y., to express support for the deal as well as for the much-vilified Dubai Ports World. Even more importantly, the Dubai deal was approved by the Committee on Foreign Investment in the United States, the multi-agency group charged with examining foreign investments for national security problems. The panel had no concerns; that should have been the end of it.

In fact, this might be only the beginning. Dubai Ports World may be limping away with its tail between its legs, but Washington protectionists have a new casus belli. The Dubai deal typifies what some lawmakers use to promote their protectionist economic policies (that means tariffs, quotas and such) on national security grounds: “Dubai – boo! Now sign here.”

Whatever the specifics of the many measures introduced on the heels of the ports deal, they share the common goal of making life hell for foreign businesses that run or own U.S. infrastructure. One proposed way to do this is to tweak the Committee on Foreign Investment in the United States by creating longer review times and adding greater “congressional oversight,” in the words of Senate Majority Leader Bill Frist.

Sounds great, but the current process was designed for exactly the opposite reason: To keep Congress out. All lawmakers need is another opportunity to turn legitimate business deals into a political point-scoring contest. Indeed, the corruption and inefficiency of the scandal-ridden, turtle-fast Congress is precisely what the review process does not need.

The other idea being batted around the Beltway would transform foreign ownership requirements for U.S. infrastructure. One bill introduced by Rep. Jim Saxton, R-N.J., and Rep. Duncan Hunter, R-Calif., would demand that any corporation that operates or owns major infrastructure (like ports or bridges) in the United States be run and owned by U.S. citizens. Any foreign firm that doesn’t meet the bill’s requirements would have five years to sell its assets and leave.

Sounds great again, but remember that countless foreign firms – most based in Western nations like Britain, Canada and France – have a hand in American ship terminals, ground transportation, water purification plants, real estate, buildings and telecommunications. Some 80 percent of the ports in Los Angeles are operated and owned by foreign companies. The result of such short-sighted legislation would be a fire sale of U.S. infrastructure and an exodus of foreign capital that would play hell on the U.S. trade deficit and weaken the dollar – all without making us a lick safer than before.

We can only wait and see if Congress acts on any of the new bills; it wouldn’t be the first time foreign firms were robbed by Uncle Sam. To be fair, both Democrats and Republicans have their reasons for playing up such legislation, and no one is really sure whether either party is serious about the proposed changes. Besides, a touch of protectionism is to be expected in an election year, especially when both parties want to look tough on national security.

But at some point, lawmakers need to stop playing off voters’ fears and begin looking at real national security problems.

If Congress can’t find a French-run Montana bridge or a middling Canadian water plant, Iraq, energy supplies and the national debt might be other places to start.

Darren Bernard welcomes comments at [email protected]

SOURCES
http://transcripts.cnn.com/TRANSCRIPTS/0603/02/sitroom.01.html
Brooks, David. “Kicking Arabs in the Teeth.” The New York Times, late ed., Feb. 23, 2006. Pg. 27
http://www.foxnews.com/story/0,2933,188169,00.html
http://www.boston.com/news/nation/washington/articles/ 2006/03/12/lawmaker_to_press_for_us_infrastructure_ownership/ ?rss_id=Boston.com%20%2F%20News
http://www.cfr.org/publication/10092/
http://www.opinionjournal.com/editorial/feature.html?id=110008069
http://www.house.gov/apps/list/press/nj03_saxton/pr060307PortSecurityBill.html
http://www.opinionjournal.com/editorial/feature.html?id=110007999