Friday, February 24, 2006

Xenophobia Run Amok

The thing that depresses me the most about the controversy over Dubai World Port’s purchase of the assets of the British P&O Line is that it is not an isolated instance of nationalist, tub-thumping xenophobia run amok.

Recall last summer’s fever over efforts by the Chinese petroleum company that goes by the initials CNOOC to acquire the Unocal Corporation. The Beijing company eventually pulled out of the deal after it became clear that Congress might intervene to block it on national security concerns.

Also last summer the House of Representatives voted to forbid the Export-Import Bank to help fund Westinghouse’s sales of nuclear reactors to China. This was accompanied by considerable nationalistic breast-beating about using taxpayer money to subsidize foreign countries.

This is because Westinghouse is owned by British Nuclear Fuels – a British company, for God’s sake. (BNF is currently negotiating to sell Westinghouse to Toshiba). There was also much high-minded talk about transferring precious national technology to China.

Go back a few more years to another port controversy involving a state-owned foreign company leasing the old Long Beach Navel Base, which the defense department was turning over to the Port of Long Beach for civilian cargo. The port, in turn, sought to lease it to COSCO, the state-owned Chinese shipping firm.

The right wing went bonkers over the deal, accusing the Clinton administration of wanting to turn the former naval base over to the People’s Liberation Army or worse. San Diego Rep. Duncan Hunter managed to insert a clause in a defense appropriations bill to kill the deal.

COSCO simply moved next door to the Port of Los Angeles where it has run one or more of its container terminals there without controversy and without any threats to our national security for half a dozen years now. So one wonders what the opponents of the Long Beach deal really accomplished.

Strangely, I haven’t noticed Rep. Hunter being in the forefront of the opposition to the Dubai ports deal, considering the leading role he played in scotching the Long Beach deal, not to mention that he chairs the House Armed Services Committee and presumably is interested in national security.

But then I haven’t noticed that many West Coast lawmakers taking a stand on the ports controversy. Of course, the ports in question are on the East Coast, but I suspect that most of the westerners are praying that the whole controversy blows over before Congress does something really stupid, such as passing some law to ban foreign operations of port terminals. That would cause chaos on the West Coast.

Take for example, the Port of Seattle. Of the three terminals, one is leased to an American stevedoring firm MSS America, one to Hanshin, the South Korean shipping line, and the other to the American President Lines (now APL) which, despite it venerable patriotic name, is actually owned by Singapore.

Port management is an international business that is dominated by foreign interests. That’s not hard to understand since there are obviously close synergies between ships and terminals. And an American merchant marine scarcely exists.

I said last year when the Unocal flap arose that if national security is so important in these issues, then why not nationalize Unocal. Why doesn’t Washington bid for the P&O shares itself? Add a few gild-edge shares to the national portfolio now filled with IOUs to China and Japan.


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