Thursday, February 23, 2006

The United Arab Emirates: Friend or Foe?

I've been mulling over this issue with the port terminal sale to the UAE, and was prepared to write that I didn't have enough information to come down on one side or the other. However, as I have typed, I have had to go back and re-write because some elements of this discussion have become clearer to me. Some of the things I know:

  1. The company is owned by the government of the UAE.
  2. All the terminals in US ports are owned by foreign companies, some of which are government-owned. (Due to regulations, I suppose, it's not cost-effective to base a shipping line in the US. For this reason the US has no significant international shipping lines.)
  3. The UAE company is not buying entire ports in the USA. They are buying terminals in some of the ports.
  4. If the deal goes through the UAE, they will own one of the largest shipping lines in the world.
  5. The Bush Administration made a confidential deal with the UAE company.
  6. Such deals are normal (trade secrets) and rarely made public.
  7. The security at the ports will continue to reside in the hands of the Coast Guard.
  8. The potential for UAE terminals to facilitate terrorist activity is no different than with any other terminals.
  9. The UAE company will pay taxes to the US.
  10. Some terrorists have been UAE citizens.
  11. Some terrorists have been USA citizens.

My analysis based on this information:

  1. It's not wise to give the enemy quarter in your own country. However, the UAE is not our enemy. They don't have a spotless track record of support for the US, but neither has France or Germany.
  2. Having the one of the largest shipping lines in the world, it would not be wise for the UAE to compromise their standing among the nations in order to use their terminals to attack the US. The world would be immediately galvanized against them. In fact, it would behoove them to police themselves.
  3. Accusations that the Bush administration had a "secret" deal with the UAE are misconstrued. It is normal for a company buying such important access to bring their offer to the US executive branch to negotiate terms of operation. The results of these negotiations are classified, not for national security, but to protect private industry strategy. The President himself is not normally directly involved in such matters: he has people to handle these things. This is why President Bush didn't know about it right away.

While I'm cautious about this, it doesn't appear that the UAE is not interested in compromising the security of the USA. Otherwise, their strategy would not be to cooperate with and invest in the success of the USA. Shipping is a significant source of the national gross domestic product of the UAE. To compromise our security would be to compromise their own economy. Therefore, they are investing in the security of the USA, not trying to compromise it. If they wanted to sneak stuff into the US through our ports, the way to do it is to bring in supplies from a third location like many illegal drugs are brought in. They would then invest in those who would benefit financially from the damage they were about to create. I don't see this happening. Honest trade should be encouraged, not hindered.

From an economic standpoint, we need the terminals to run. Imports have increased and our active terminals are running at capacity. If the UAE doesn't run them, we need someone to, and regulation has been too high for a US company to start up. With the UAE joining the services avaiable in the US, our shipping destinations will increase and our capacity for creating wealth through international trade will improve. Hopefully, some of these will be exports, which will work toward balancing the trade deficit. This is what the UAE has invested in. This may be why the liberals are suddenly all about "national security". The congressional Republicans may be merely concerned that the liberals will take away their fire about "national security" and are proably just looking for a token "congressional oversight" in order to maintain their status as being strong on national security.

My conclusion is that the deal should be allowed to happen with a few stringent controls.

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