(This post is by Joe Contrarian from the RX posting forum)
1) No matter who gets the contract - the Brits, a UAE company, whoever - exactly the same people - Americans - will be working at the ports. Those people have been investigated thoroughly and have security clearances following about a 2-year procedure.
2) The Committee on Foreign Investment in the United States, a U.S. inter-agency panel that reviews security implications of foreign takeovers of strategic assets, reviewed the transaction and did not object.
3) U.S. seaports handle 2 billion tons of freight each year and only about 5 percent of containers are examined on arrival as it is. Does this deal further increase the threat of an attack? Probably not.
4) Some in Congress have expressed fears that the UAE was used as a conduit for parts used for nuclear proliferation and that the local banking system had been abused by financiers with possible links to terrorist organizations. Three of the 9/11 terrorists came from the UAE. All fair points.
As far as I've heard, this UAE company (Dubai Ports World) has not had any problems, and is in fact a major, respectable, and successful international company. They would not be in the position they are; that is, to buy up another international corporation with such widespread business, if they were not well-run and thoroughly competent. The problem is, the government of UAE owns Dubai Ports World. They will be privy to many security procedures at these six ports. Sure, they are friendly at this point in time, but then the same was once said about Saddam Hussein. And Japan and Germany were once our enemies, etc. etc.
On the other hand, all this uproar is a kind of double standard: America expects the Middle East to "get civilized," and improve their countries and economies to America's standard of international capitalism, but then rejects the efforts of Middle Eastern nations to do business. One one hand, many of us talk how the Saudis and the Pakistanis need to be more responsible in their governance (of which the UAE is a shining example, which you've heard me discuss), then tell the UAE they can't operate US ports because they might kind-of maybe harbor terrorists.
I've heard rumors some Arabs threatened Bush with sour diplomatic relations if this does not go through. Other rumors say some threatened Bush with turning off the oil spigot. Hopefully, this kind of stuff is more hysteria over the uproar at the thought of "Arabs guarding our ports." Much of the hysteria I’m hearing, reminds me of a sound byte I watched a few years back on tv, in England, when a German car company threatened to buy off Jaguar: "We didn't let the Nazis win in WW II, we're not going to allow them to win now," an old lady scoffed.
Globalization is a reality. 'Arabs' own allot of entities in the US as do Japanese, Chinese ad-nauseum (even electronic parts in the military). It's part of what makes America work. As far as “national security” is concerned, that line was crossed long ago. Indeed, many have made the case, global capitalism is an excellent deterrence to large scale war.
That all said, whatever you think of the deal on substance, this is terrible politically. It's hard to understand what benefit the President might believe he will gain personally through his support of U.A.E. supervision over American Port Authorities. Perhaps he expects some benefit in the way of "political capital" he can use to strengthen US presence in the middle east? That was my sense when the administration, of all govts, came to the defence of Muslims over the cartoon uproar. The “bigger picture” and indeed a significant piece of the Bush doctrine, seems to be a focused effort bringing the Arab/Muslim community into our global economy.
Politically, we're dealing with a lame duck president and a red hot potato in an election year. If Bush tries to push extremely unpopular legislation or oppose extremely popular legislation, he doesn't stand a chance. None in Congress is going to bother listening to his rhetoric when they actually have races to win or lose.
I predict this deal won't go through, followed by more finger-pointing from Arabs/Muslims, at home and abroad, with cries of racism and double standards. They have a point.
"Turning off the oil spigot" would have been impractical, if not impossible. More likely, what they would do is stop selling oil in U.S. dollars and start pricing it in euros instead.
And who could possibly blame them? They can't eat dollars, so when they sell oil to us they have to use those dollars to buy/invest in assets that are priced in dollars (U.S. government securities, U.S. real estate, etc.). If the U.S. government impedes them from buying legitimate, profitable business interests in the U.S., then our currency isn't worth a damn thing to them.