Posted on 03/12/2006 3:06:04 AM PST by PrinceOfCups
First it was P&O and now the Doncasters Group. The US phobia over the potential security risks in the two Dubai acquisitions exposes the Americans' typical approach towards free trade and globalisation. When things work out in their favour these are sanctified tenets that nobody can touch. But when it involves American interests, free trade is just a matter of convenience.
The acquisition of Britain's Peninsular & Oriental Steam Navigation Co by Dubai Ports World at a cost of $6.8 billion is, of course, a milestone in the company's history. But the change of management hardly makes a difference on the ground at the ports of New York, New Jersey, Baltimore, Philadelphia, Miami and New Orleans, the security-sensitivity of which has led to the political storm in the US.
For all practical purposes, the ports will continue to be staffed by the Americans. The overall control of security will be vested with the US Customs, the Coast Guard, and other authorities, and not the terminal operators. Further, the US officials have secured assurances from DP World that it would follow their security orders and allow access to records. According to reports, this was done in the middle of January, when the whole issue was subjected to a review.
Hue and cry
So, the hue and cry would seem to be no more than a card that the US politicians are playing to get mileage on the domestic turf. The huge international implications of this move are, however, not lost on the world. The attitude of the Americans actually exposes the depths of protectionist tendencies in the US. They have no problems with the billions of dollars that the Arabs hold in treasuries and other dollar-denominated assets in the US. But they don't want the Arabs to directly own anything.
Not just the Arabs, the Americans apparently cannot relish the idea of their strategic assets getting into the hands of anyone, for that matter. Last year, the China National Offshore Corporation's bid for Unocal met with rather the same results. A concerted round of China bashing even prompted the Chinese government to intervene and pull the plug on the move so that the Americans were not discomforted.
US politicians argue that the port deal is a political issue concerning national security and that overrides all other considerations free trade, globalisation or whatever. But the big question is whether the Americans are prepared to leave such political issues aside when they negotiate free trade deals with Gulf countries.
Sensitive sector
The US negotiators have put great pressure on the Gulf countries to open up the economy, including the sensitive government procurement sector, in the interest of global free trade and have not hesitated to include political components such as the reforms agenda in the trade negotiations. The Gulf countries, in turn, must insist on excluding the politically sensitive issues such as the agency law and restrictions on ownership of land and other assets by foreigners from the purview of the trade negotiations.
For instance, the Gulf countries with their peculiar demographic situation need to protect their domestic populations from unrestricted entry of immigrants, whether as investors, owners of land and properties or as workers. These are issues that affect the national identity of the local populations. As highly politically sensitive issues, these must therefore be placed above any trade negotiations. The US Trade Department has no right to complain about restrictive land and company ownership regulations in the GCC countries.
In this respect, the stand taken by Egypt that trade negotiations with the US can be launched only if Washington stops attaching political strings to the deal deserves special attention. Trade negotiations must be held on the basis of issues concerning trade and investment and nothing else, the Egyptian foreign trade minister declared at a joint press conference with a senior official. Cairo's stand must not only be applauded, it is worthy of emulation too.
- The writer is a UAE-based journalist.
I'd like to see what the leadership of Dubai would say if an Israeli firm tried to buy its ports.
You know we had a free trade agreement that was in the works with the UAE. Now its been put on temp hold for oblvious reasons. Who knows what was in the background in that as to Israeli.
Thanks for posting this, and the other articles I see you have up, which I will now go read.
Survival is rather convenient.
I'd say the author could have stopped there, and been right. Protection of strategic assets is a valid (and perfectly sane) aim.
There is nothing that qualifies as "free trade" about government owned and operated businesses. Is the UAE company a government or is it a business? It can't be both and qualify as a free market system. Under the western free enterprise system Governments do not compete with private business in the market place and business does not get to govern. As we march boldly into the globalist future we Americans will have to decide what type of "business" model we want to promote. If we want to preserve our freedom -- both personal and economic -- we will not promote the UAE or the Chinese government ownership model.
The TVA was created by legislation to serve an area that private business did not serve. During the early years of electrification rural areas were not being served by private entities because of the increased costs -- it was not profitable. So, under our democratic system, legislation authorized the government either to create such services, in the case of the TVA, or more frequently to support the creation of non-profit rural electric coops.
You have, however, put your finger on the difference between the US and the government ownership model of the UAE. Under our free market, competitive economic system government owned and operated "businesses" are really services and these are generally limited to activities that are called natural monopolies or that intrinsically involve employing the coercive use of force, such as law enforcement and the military, and therefore cannot legitimately be delegated to private entities under our republican political principles. They are also operated on a non-profit basis and they do not go out and compete in the open market with private enterprises. Whether these governmental services (like the TVA) should remain defined as natural monopolies or should be privatized is always an issue up for decision by the people through our elected representatives. One such hot and heavy debate has been waged for many years about privatizing educational services.
Does the UAE firm/government operate in the market in competition with other businesses for profit? Does it allow public input into its operation and control over whether it even continues to exist? Merging the roles of government and business will return us to a mercantilist economic model in which business and government elites will rule and individual political and economic freedom will be imperiled. In America, the line that separates the legitimate roles of government and business is generally still respected, as it must be should we wish to maintain our heritage of liberty and self-government.
Are you aware much of this free trade agreement that is now stalled between us and the UAE. Were there proposals in it that would have helped out local business owned by Americans. Just curious. Also I keep hearing all business's have to be owned in part by the UAE. I am pretty sure that would have to be false. Also as to land ownership is it similar to how other countries operate where you cant buy land but have a 99 year lease.
Well that's certainly a crock of uninformed nonsense...
Fiscal conservatives have been objecting to this for years.
Foreigners own half US debt, tipping point unclear
I want an America that is free, independent, self-reliant and NOT IN DEBT.
"Think what you do when you run into debt;
you give another power over your liberty."-- Benjamin Franklin (1706 - 1790)
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