TCS Daily


A Victory for Xenophobia

By Pejman Yousefzadeh - March 14, 2006 12:00 AM

Alas for Robert Green, his eminently sensible article concerning the benefits of the Dubai Ports World deal came too late to save the deal from destruction. The negative consequences of this descent into unthinking nativism, protectionism, and the placement of politics over principles that would aid American security interests in the long term may not come fast and furious. But they will come. And we will not like them.

They will come, as Dan Drezner points out, in the form of further capitulations to nativism and protectionism that will serve to further undermine American economic and national security. Writing in the aftermath of the rejection of the ports deal, Professor Drezner observes:

And might I finally add that I feel ultrasafe upon hearing word that the U.S. Trade representative is planning to postpone talks for a USA-UAE free trade agreement. We sure sent the proper signal to foreign investors — and it's not like the UAE could retaliate or anything.

With just a little more effort, I'm convinced that U.S. lawmakers can convince everyone in the Middle East that it doesn't matter how much you try to buy into the U.S.-promoted liberal economic order, no one will really trust you.

Drezner may be underestimating matters. It would appear that whatever may come of future protestations of the benefits of buying into "the U.S.-promoted liberal economic order," the lack of trust is already palpable:

So the Dubai ports deal is done, a United Arab Emirates-owned company has backed down, and CNN anchor (and deal opponent) Lou Dobbs is going to have to find something else to talk about. But the after-effects are likely to be felt in boardrooms across America as well as on Capitol Hill and in Arab capitals from Riyadh to Bahrain and Cairo.

That's because while the decision Thursday by Dubai-based DP World to complete its takeover of the U.K.'s P&O while transferring or selling the U.S. operations may placate opponents on Capitol Hill, it's likely to worry major American exporters such as Boeing (Research), GE (Research) and other companies that see growing opportunity in the oil- and money-rich Gulf.

<>"Our members are very concerned about what the failure of this deal means," says Bill Reinsch, president of the National Foreign Trade Council, a Washington trade association that represents large U.S. multi-nationals. "They haven't wanted to be visible but they're very concerned about the signals the U.S. is sending out."

Indeed, The Hill, a Washington newspaper that covers Congress, reported that Dubai's royal family is "furious at the hostility both Republicans and Democrats on Capitol Hill have shown toward the deal."

And with Boeing hoping to land a major order for its new 787 Dreamliner with Dubai-based airline Emirates down the road, the stakes are high. Elsewhere in the region, the UAE's Etihad Airways has already ordered more than $1 billion worth of 777s, and Egyptair and Royal Jordanian are longtime Boeing buyers.
<>
"These are important customers for us in an important, growing market," says Boeing spokesman John Dern. "We are with these customers all the time. We haven't seen any impact at this point, and have no indication there will be an impact." Dern wouldn't say whether Boeing execs have specifically discussed the ports controversy with potential customers, but he notes that "we're certainly monitoring the situation."

Don't expect news of any public threats or cancelled orders to come from the Gulf in the coming days or weeks. "That's out of character for the Gulf states," says Reinsch. "It's more likely they'll just act, and suddenly a deal is off."


And of course, it would be understandable if there was a lack of trust displayed regarding future enticements on the part of the United States to get other countries to join the liberal economic order. After all, if others around the world look at the debacle surrounding the Dubai Ports World deal, and then consider that the operations of every other major American port is handled at least in part by foreign companies, then it is easy to see why others around the world would conclude that the United States, as an inconstant friend, is far more dangerous to their interests than would be a constant enemy.

Naturally, when one reads the Washington Post article explaining the depth and breadth of foreign involvement in the management of American ports, one cannot help but wonder whether the U.S. will be as bound and determined to root out all foreign influence in port operations, or whether it will restrain itself to situations where a company whose roots are in an Arab country — never mind the excellent reputation of said company and the fact that the Arab country in question is a strong ally of the United States in the War on Terror.

We should understand that the management of American ports by foreign companies is not some stark or alarming deviation from the norm. Rather, it is the norm and as such, is entirely emblematic of the nature of the global economy. Similarly, the ability of American culture and companies to pervade the cultural and economic life of other countries is part and parcel of the global economy. Autarky — never an attractive option — is now permanently out as an approach to business management; whether or not that management significantly impacts domestic security.

Unfortunately, the political dinosaurs who all too prominently inhabit the terrain of policymaking when it comes to dealing with the challenges of the global economy and domestic security don't appear to recognize this fact. So instead, they are content to demagogue the issue for short-term political gain (including their own political gain should they eventually decide to run for President) while doing a monumental injustice to the facts and sacrificing the long term economic and security interests of the United States. At some point, one expects that this brand of political antediluvianism will give way to a brand of thinking that is with the times and in tune with the facts. But that does not appear to be ready to happen anytime soon.

We as a nation appear to be content to muddle along and botch routine, yet valuable opportunities to craft reasonable and sensible policies. We cannot claim not to have been warned of the fact that eventually, we will reap the whirlwind of this inattention to facts, details and the realities of the world in which we live. But the lack of surprise that we should feel at the attendant consequences of our policy failure when it comes to the Dubai ports deal should hardly serve to mitigate the regret at an opportunity lost and at a determined effort on the part of American policymakers to undermine the values our country is supposed to stand for and the methods by which we could make ourselves safer and more prosperous.

Pejman Yousefzadeh is a TCS contributing writer.

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28 Comments

Let's roll it back
Completely agree with the view. Its certainly opened the door for plenty of selective, illiberal policymaking in other countries. Politicians in India, for example, have long held the view that Foreign Investment in telecom, aviation and broadcasting are inimical to national security and that in broadcasting it opens the door for cultural colonialism. Well, the leader of the liberal, global and free world has just agreed with them with the stand on Dubai ports.

A beast of our own devising
It doesn't happen often, but Pejman and I are of the same mind on this one. We're shooting ourselves in the foot. But it's a problem of our own making.

After 9/11 the country was in a mood to go totally on emotion, and go on a rampage across the Sands of Araby until our fear had worn off and become replaced by our more comfortable smug complacency. Of course, let the record show that it hasn't yet turned out that way.

Our leaders seconded that emotion, knowing that popular leaders in times of war tend to get re-elected. So they saw our Afghanistan and raised us an Iraq. Now we're in it hip deep and it's getting worse each passing month. Not the best time to tell everyone that djellaba-clad relatives of the WTC bombers will now be unloading the containers at all our east coast docks.

Patient minds tried to explain to us that Arabs wouldn't ree-ally be doing the work-- that company management in the global age is an abstract thing, and that probably Brits, Aussies and American execs would have actual operational control. But we weren't listening.

Our minders have spent a lot of effort and exercised a lot of craft in turning us into a country that can be herded on the basis of fear. And they have succeeded. Now they have to live with their own creation.

Well said
Hear hear Roy Bean, very true, well said.

Who knew the constant beat of fear from Republicans to ride Bush's toughness to election victories would come back and take a rip at their seams. How ironic to hear screams of national security for so long, so the Administration could do whatever it wanted and not face accountability, now to have their faces shoved in doo-doo over a somewhat routine business deal because they ignore national port security. It must be nice to pick your values on a case-by-case basis.

"We as a nation appear to be content to muddle along and botch routine, yet valuable opportunities to craft reasonable and sensible policies."
YES! Why did it take 6 years to realize this???

"We cannot claim not to have been warned of the fact that eventually, we will reap the whirlwind of this inattention to facts, details and the realities of the world in which we live."
This is so beautiful, I'm vaclempt. We've known since before 9/11 the nature of the Bush Administration. Their misdeeds have only grown and multiplied over the years. Why in the hell does 37% of the country still approve of Bush? Its in the quote above- inattention to facts, details and realities of the world in which we live. It is the modus operandi of the Administration, and thus becomes the perception of its supporters. I'm glad to see someone else saying it too. The truth hurts sometimes.

International Port Security is Indivisible
Port Security Requires a Global Security Regime

Should the US approve the proposed sale to Dubai Ports World of a company which currently manages a number of US port terminals? And what are the factors that have to be considered when such a decision is made? While it is true the process used in this decision was flawed, this reflects a failure to make changes to the legislation which requires a secretive process. Throughout the 1990’s a very large number of US terminals came under the control of foreign entities, including China whose track record on proliferating both nuclear and missile technology is terrible. About which many of the current critics of the DPW deal were then silent.

Keeping the current political environment in mind, the issue of port security is far too important to be left on the Washington playing field to be kicked around in order to score cheap political points. If our goal is to prevent nuclear weapons from entering our seaports, such material must be kept from leaving foreign ports. This will require international rules to be put into place, to create a level playing field among shippers, port owners, and terminal managers.

If one argues that DPW will not enforce or implant the best security rules here at US ports, then one has to assume such security measures will not be put in place in the numerous terminals operated by this company in Hong Kong, Singapore, and ports worldwide. These ports are not made more secure by turning down this proposed deal.

However, the proposed deal does give us an opportunity to bring to bear technologies and practices that would dramatically improve our port security environment and significantly reduce the prospects of a catastrophic terrorist event The US government has done serious work since 9/11 on this matter, including adoption of the mega-ports directive, and the Proliferation and Container Security Initiatives, (PSI & CSI). At least, $1.6 billion is now being spent on this and related security.






The administration is putting into place a series of security layers. First, we have the Nunn-Lugar program that secures nuclear materials in the former Soviet Union. This program, including European and allied nation pledges of support, will reach $1.7 billion annually. Countries such as China, Iran and North Korea are not part of such a voluntary agreement. Thus the PSI allows the US and its allies to interdict on the high seas nuclear weapons technology. We intercepted thousands of nuclear centrifuges bound for Libya and stopped a freighter loaded with explosives equal to Hiroshima.

Nuclear radiation detectors, low-level gamma ray machines and a host of other screening technologies are being developed, tested and installed at our nation’s ports. $300 million has been invested to date on portal monitors which are but one of numerous technologies required to do the job. While current monitoring screens 80% of the cargo at our ports, additional layers of screening capabilities are needed.

One such innovation is a radio frequency chip, to be used to screen cargo leaving the port of St Petersburg under a grant from the US Department of State. The Defense Logistics Agency is also testing the new device which tracks cargo, determines whether the freight’s integrity has been violated, whether the ship has traveled only to those ports previously scheduled, and what cargo is being transported. The chip is encrypted and can be imbedded in the container and is impervious to tampering. In this way, once cargo has received “the nuclear free good housekeeping seal of approval”, it can be subsequently tracked and identified.












One new nuclear detection technology has been successfully tested as an integrated part of the loading cranes at US terminals. Some 3200 cranes operate worldwide. At a cost of less than $750 million, every terminal loading crane in the world could detect nuclear materials, with such screening impervious to the owner of the terminal or port.

Technology, therefore, has to be the bridge between ports operating in the pre-9/11 mode and those operated today. The commercial supply chain of goods and services cannot be brought to a halt by hand inspections of all cargo. With technology, ports here and abroad can be brought into a world-wide initiative that protects the world’s trade economy from being brought to a halt. The system has to be implemented here and abroad. American companies do not operate these ports now and will not in the future. Thus the technology that can protect us has to be adopted. That should be the test of any port deal.

Xenophobia, a word and a concept for life's losers
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The Ports
GE, Boeing, etc. are not as important as the security of the US. This is but the first step in protecting our country from the crazies of the world (we have enough of our own). These countries weren't buying from GE, Boeing, etc. to win our hearts. They were doing it because they felt that it was the best deal. The only nice guys out there is the US; and you know what Leo said about them.

contradiction
Conversly then--where were the brave multi-culti defenders from the left on this one? They were as xenophobic on this deal as the GOP turned out to be. Does it mean they've been beaten into submission by the constant beat of fear from the GOP? That would be hard to prove since the left seems to define itself by what it is opposed to rather than what it is in favor of. I would like somebody to explain the contradiction in this case.

Agree with you, but
this isn't really a left-right issue. Just read the post by spiritof76 for examples of jingoism and bigotry at its worst. It's about xenophobia, and some folks have it and some don't, irrespective of their place on the political spectrum. Both Dems and Reps joined hands on this issue, showing that both were engaged in political showmanship at the expense of substance. There is a tendency to blame the Bush administration here, and certainly they made some political mistakes, but the villains of the piece are Congress, both parties, and a slavering, jingoistic media.

Bond, Sukuk Bond
Economic jihad and U.S. ports?
by Rachel Ehrenfeld & Alyssa A. Lappen
Washington Times, March 13, 2006

...According to a fatwa issued on July 10, 2002 by Hussein Shihata, Professor of Islamic Economy at Cairo's al-Azhar University, ECONOMIC JIHAD'S "primary aim is to weaken the economy of the Zionists, the Crusaders and their allies, while at the same time, it strengthens the Arab and Islamic economy in a way that make it a self-dependent economy."

...To help finance the purchase of P&O, DP World has issued "the world's biggest-ever Islamic bond issue," a $3.5 BILLION SUKUK BOND -- together with Dubai's Ports Customs and Free Zone Corp. (PCFC).

Since ISLAMIC LAW GOVERNS THE SUKUK, all these non-Muslim investors will subscribe to Islamic laws along with their bond purchases. This extremely attractive variable yield of 7.25% to 8.25% is some 250 to 350 basis points more than that offered on a two-year dollar Libor swap. In the current fixed-income market, where two-year U.S. Treasuries yield 4.66%, it is virtually impossible to find an investment-grade two-year bond with such a high interest rate anywhere else.

...With such tempting returns, it is not surprising that Western investors have been lured into supporting the GROWING INFLUENCE OF THE SHARIA-CONTROLLED ISLAMIC FINANCIAL SYSTEM. This is one way in which the West weakens its financial underpinnings while strengthening "the Arab and Islamic economy in a way that make it a self-dependent economy," as advocated by Hussein Shihata's fatwa.

http://washingtontimes.com/op-ed/20060312-101234-5706r.htm

One in every crowd.
Did you get your bag of lollies stolen as a kid?

no contradiction
ColinH has it correct. People are people, the masses tend to be stupid and irrational, so we had a knee-jerk reaction to this ports situation. Then the politicians clamored for political points, and we are where we are.

The masses are even more irrational since 9/11, and since the Administration pounds fear into us constantly. It affected left and right. Its how Bush got re-elected. He convinced and scared enough rational thinking people to vote for him. It utterly amazing he got re-elected. Its a testament to Rove and that team's ability to campaign, and conversely, Kerry and his team's inability to effectively campaign. People pay very shallow attention to politics.

they don't know who they hate more
The Democrats are not xenophobic, they are Republicanphobic. They are confounded by being unable to choose who they hate more - Bush or Frist. American voters and apparently our "leaders" are fixated on personalities and polls, with no rational thought given to issues at all(except for abortion and Gay Rights). Democrats, due to their lack of real positions are paralyzed by refusing to side with either faction of the Republicans. I'd like to see the end of both of these parties!

It wasn't xenophobia
It wasn't xenophobia it was a "get Bush" mentality.

If it was xenophobia, we would hear a lot more about the COSCO running of the port in Long Beach. Until last year when shares were sold in the Hong Kong Stock Exchange, COSCO was owned by the Communist Chinese military.

While there probably is some xenophobia is some opponents, that lack of efforts to kick the Chinese oout of Long Beach proves that xenophobia can't be the prime motivation for stopping the DP World deal.

Who knew xenophobia was rampant?
Only 17% of the US public supported the ports deal. Leave it to ordinary Americans to have far more common sense than the Administration.

Assuming the deal has in fact collapsed (that's not 100% clear yet) it's a huge relief to know this potential avenue for exploiting our nation's endless security weaknesses has been closed.

By the way, there are no valid commercial arguments to defend the deal. That's pre-9/11 thinking. Our security is not for sale.

Likewise, the argument we need to be likeable doesn't hold water. Over there, they back the strong horse. Concessions earn their comtempt. When we stand up and show we won't be pushed we earn their respect and admiration. The opposite happens when we sit around wringing our hands asking "will they hate us if the deal doesn't go ahead." Here's the news: they hate us now, and there's a hole in the ground in Manhattan to prove it.

There's a war on, so act like it. Save the feelgood gestures and the business-as-usual sophestry for after we achieve victory.

Wrong
You make the incorrect assumption that there is a direct connection between ownership and security. It was the port management that was for sale; port security was not a technical issue. The fact that 83% of Americans were led by the nose by demagogues such as Lou Dobbs is evidence of nothing.

Worse than that
he is the unfortunate justification as to why the most extreme members of the left wing might occasionally have a point. In so doing, such silliness makes life for the rest of us all that much more difficult. We really don't need such a huge target for the dolts at DailyKos to cite as examples of why they are right. He makes grandiose claims about where his ancestors were in the Am Rev, but with attitudes like that, he'd have been one of the Hessians.

a defeat for clarity of expression
"But the lack of surprise that we should feel at the attendant consequences of our policy failure when it comes to the Dubai ports deal should hardly serve to mitigate the regret at an opportunity lost and at a determined effort on the part of American policymakers to undermine the values our country is supposed to stand for and the methods by which we could make ourselves safer and more prosperous."

Has a lack of expected surprise *ever* mitigated regret?

If Iran had tried to negotiate the port deal instead of UAE, I'd wager this article would be much easier to write and parse. "Iran wants to run American seaports. We don't like Iran. Therefore, they will not run our ports. We prefer to save those plum deals for countries that let us use them as a gas station/military base."

A Victory for Xenophobia
Your incomplete approach of focusing on the ports deal's contractual aspects and what these do and don't relate to misses the forest for the trees.

The American people are directionally correct. To take a simple example, they would know, without reading a position description, that it's not OK to let a Russian spy join the maintenance staff at the Pentagon. Naturally, right after declaring so, they would be accused of Xenophobia, and worse.



So what
Since the UAE is as opposed to terrorism as is the U.S., your comparison with Russian spies is both deceptive and meaningless. The American people were not "directionally correct" on this, but that's democracy. People are allowed to be idiots and to vote idiots into office. What they are not allowed to do is evade the consequences of their idiocy by snivelling about bogus security concerns.

Weigh the deal from the right perspective
You write "Since the UAE is as opposed to terrorism as is the U.S."

If that's what you think, no wonder you've wandered down the wrong path. Start with this:

http://www.forbes.com/global/2004/0419/041_print.html

Here's a thought to help lead you out of the trees: it's not just the Dubai of today that's a concern, but the Dubai of a decade and more from now. Because we can't forsee that, it's critical we close off potential threats by shutting down the deal. That's what preemption is all about. Strategic thinking is about tomorrow as well as today. Before you decide something is meaningless, try asking yourself, "in terms of what?"

Perspective is indeed important
The Forbes article shows geography to be a factor, not port ownership. Moreover, as the world's most modern port operators, they are in a far better position to monitor and track incoming and outgoing cargoes than is the current U.S. port management.

My original comment stands. If the U.S. persists in alientating its allies, the day will come when it has none. This is a far more important perspective than speculation about weakened port security.

Let's go with what we know
I'm glad you mentioned speculating, because this would be a good time to recognize that it's you, and the people who agree with you, who are doing the speculating.

Those of us who oppose the ports deal are the ones refusing to speculate that it's safe to rely on Dubai.

Last I heard, geography matters in that neck of the woods -- just ask the just ask the Kuwaitis. If the likes of Iran Finlandizes the Emirates, anything can happen. Hezbollah in Lebanon is the model for Islamist colonization, which is now being exported to the West Bank and Gaza. Don't underrate the enemy.

No
it's you and people like you who are doing the speculating by indulging in unfounded fears about security and pushing the panic button. You completely missed my point about geography; U.S. ports are located on the Atlantic and Pacific, not the Persian Gulf. As to Finlandization, you appear unaware of what that term actually meant in terms of the country of origin. Suggesting that Iran is somehow going to "Finlandize" UAE can only be made by suggesting that Islam is a monolithic bloc.

I don't underrate the enemy, but you make the cardinal mistake of failing to distinguish between friends and allies, and those to which we are opposed.

Moreover
I am not interested in speculating, I'm interested in causes and results. One of Al-Qaeda;s principal goals is to drive divisions between the United States and any or all of its allies. The ports debacle is a significant victory for them. This is a result, not speculation, and from Al-Qaeda's perspective, what makes this victory even more important is that they didn't even have to use any suicide bombers to achieve it.

Congratulations, Osama has just managed to lead you and the rest of the paranoids around by the nose.

Good points, but still conflicted
Good discussion, I actually find myself somewhere between the positions of ColinH and lastango.

At first I thought the ports deal is no big deal. Its a multi-national corporation, its a free market, they have experience running ports, UAE is an ally (but thats a gray area), etc. Why are people reacting like this?

Then I caught a snippet on cable news and the person was pointing out that Dubai wouldn't control security for the ports, but they would have access to security protocols and methods and schedules, etc. It made me think, how likely would it be for a UAE person or people at the port to be bribed to arrange/let a container slip through the security. UAE is not a democratic society, their government is plagued by corruption even more than we are. These thoughts make me think no, we should not let the ports deal go through. It would be a gaping hole in port security, if we even have much to begin with.

So I concede I just don't know enough to make a good decision, I'm conflicted, but I tend to think we should not do the deal because of what I explain above. I'd venture to say most Americans don't know enough about it to make a good decision, so given the environment we're in, its understandable the way people have reacted. But not acceptable. Knee-jerk reactions do make us look stupid. If not the people, at least Congress and other leaders should take time to analyze the issue so a good decision is made. I thought the 45 day cooling period was a good idea, even if Bush did it just so he could give us another hard-sell on his policies.

Regardless, the spectacle is fun to watch. Anything that contributes to ripping apart this power center that Bush-cons have within the Republican party and the government, is a good thing.

Don't go all wobbly now
You can't get misled by unimportant red herrings such as this but deal with the facts. First, port security in the UAE is better than that in the U.S. in terms of container inspection. Second, understanding the protocols and schedules doesn't mean you can bypass them, because they're under the control of the U.S. coast guard, customs, et.al. When the U.S. security services indicate that this deal is not a security threat but may in fact mean a security enhancement, that should mean a lot more than ignorant ranting from talking heads (Dobs) and irrelevant speculation from so-called media sources.

For a good lefty, I'm astounded that you would be in agreement with Faux News.

How soon your forget
"Congratulations, Osama has just managed to lead you and the rest of the paranoids around by the nose."

Even after 9/11 you manage to mistake agreeability for strength. There's a war on. We win by fighting back.

They would not let us manage anything in the middle east so why should we allow them here?
Let's be practical and realistic. The muslims-have proven there are no moderate muslims-that they only wish to destroy and kill everything non-islamic. Why should the USA allow a nation friendly to Osama *******, "manage" a group of our largest port facilities. Those murderers do not allow non-muslims to walk or enter Mecca because we are infidels. Why should we allow them access to our ports. What would they tell us if we wanted to bid for prividing security to the city of Mecca? They would tell us no. We must start acting realistic and stop pretending the islamic world loves America or any western nation. My last comment is for the GED flunkie that claims DP provides great harbor management or even the best? Let me educate you...which nation has more shipping, cargoes, materials, and other items moved around the world? America or the tiny dot of a nation in the Persian Gulf? How can you compare thousands of ships a month to 7 or 8 in Dubai you mavros?

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