Thursday, February 23, 2006

Ports Issue


I’ve not posted on this topic yet, because quite frankly there is too much unknown information for me to make a rational comment. However colleagues, pals, and friends have asked for my take, so it’s time to put those questions in writing to hopefully spur discussion and possible enlightenment.

And don’t assume you know where I stand on this issue… you may be surprised:


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Right off the bat, I don’t understand the most recent tactic of President Bush’s Administration, suggesting he only learned of this deal in the last few weeks; this flies in the face of his resolute stance taken on Tuesday: that he would veto legislation that would block the action. Even if it was true, which I doubt, taking such a position so late in the game (and after drawing the veto line in the sand) makes for bad appearances.

Appearances are a big deal to many, especially in politics. I have long rallied against the notion that ‘form over function’ is a good idea, in that such a belief (in government) often leads to feel-good legislation that does little (if anything at all) to help anyone (i.e.: supplementing reckless driving laws with prohibitions for cell phones, chaotic and overbearing child-seat laws, etc.).

I, for one, do not like the deal because I’ve long thought too much of this country is sold to outside investors. However, these investors are merely returning US Dollars back to our country – after we have shipped them to those countries in trade – and that means those monies could be invested again here in the states. It is sometimes not at all pretty, but it is part of the open market system we embrace and all profit from. That there are ports that are run by Chinese outfits far outweighs any concern I would have with the UAW; I haven’t forgotten that China still blames the US for ramming their fighter jet with our turbo prop

The far majority of Congress people opposing this deal are doing so on the basis of ‘looking goods’. I submit few (if any) can name the agencies involved in Committee on Foreign Investment (CFI), the oversight body who approved of this deal in early January. Still, everyone wants to jump on the wagon if they can state a national security concern.

Regarding the National Security angle: up until this sale, the 6 ports in question were run by a British concern. Considering last summer’s bombing of London subways, carried out by Britons, I would submit it is hard to accuse the UAE of actively harboring terrorists. While I would prefer only US operators manning our ports, in a global economy that isn’t always what will happen. Add to it the fact that any US company can (and probably has) sold itself to a foreign company (as is the case in this issue), this is not entirely surprising.

The real questions I want answered are ones not even being asked in any media, MSM or (apparently) otherwise:
  • What part of the CFI review is being questioned? Is it the State Department, the Defense Department, OMB, Commerce, Homeland Security? Or, as I suggested above, do the automatic naysayer’s even know who is involved in the decision??
  • Assuming for the moment the Congress passes a bill, which is vetoed, and they overturn it. What then? How does the US tell a British company who they can or cannot sell out to? (yeah, I ended in a proposition…) Simply put, we can’t. But this company only leases the ports from the US. Has anyone seen the lease? What options, exactly, does the US have in cancelling a lease to a foreign company? There must be grounds for such a termination, what are they exactly?
  • What if the above lease is terminated: what then? Who steps in and runs the show?? Someone has to do it, so who will it be? How many companies in this world., US or foreign, have the skills needed to pick up this kind of operation? (I’ve asked the same question regarding Halliburton: who else, other than they, do what they do?)
  • If the UAE company controls the port in Corpus Christi, TX, will the state have to change the name of city, you know, to something that wouldn't offend Allah? (this is said with tongue planted firmly in cheek)

I think that when this issue is finally resolved, whatever the outcome, a serious review of policies regarding Foreign Investment will be called for by the masses. Anyone who immediately says ‘No’ to foreign investors will require some basic, collegiate economics lessons.

Still, this matter does not ‘look good’, and in a world obsessed with looks (and I’m talking the political world, not just the fashion world), looks are everything. I can’t predict how this play out in the end, but it certainly isn’t over yet. And quite frankly, while I was leaning towards approval, one inescapable fact cannot be ignored: former President Jimmy Carter endorses the plan. After the debacle over the Panama Canal, his opinion on foreign affairs cannot be taken for granted.

Your turn: answer any or all of my above questions, post your own,
or tell me why I am wrong.


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