Saturday, February 25, 2006

Can anti-port activists dodge the "protectionist" label?

Ports of Gall
The new protectionists use national security as their cover.
Opinion Journal, Wall Street Journal

In Mrs. Clinton's "hearts and minds" crusade, this will not go down as a good week. A United Arab Emirates government allied with America, that provides a Persian Gulf base for U.S. military operations, and that was the first Middle Eastern country to join the U.S. Container Security Initiative, has been rewarded with Congressional demagoguery that a company it owns can't be trusted to manage commercial operations in U.S. ports. With Mrs. Clinton herself leading the jeers.

And why? For no other reason than that it would be an Arab-owned company. If it is "foreign" ownership that's alarming, the same politicians would also be denouncing the Chinese, Singaporean and British companies that already manage some U.S. port operations. So the message that all Arabs need not apply comes through loud and clear.

Perhaps, before we go any further and voices raise up is dismay, saying this has nothing to do with UAE being Arab and is all about the fact that it is state owned, let's go back to the head cheerleader on this, Chuck Schumer, and his statement which lays out quite clearly his objections.

"This United Arab Emirates government-owned and operated company could be perfectly qualified to operate ports around the world," said Senator Chuck Schumer, the most vocal among the group. "But the question that needs to be answered is whether or not they can be trusted to operate our ports in this post 9-11 world," he said, referring to the Muslim emirate.

This cannot be misinterpreted or spun any other way. Schumer says despite any viable qualifications, it is a matter of *trust*, post 911. Yet would this "trust" question arise if, say, the P&O purchaser were an Australian gov't company?

While no one can speculate what would have been the reaction to an Australian gov't owned company on the other end of the P&O dea, I'd say it's pretty safe that the "trust" issue would not have come up as the dissenting factor. And that nuance smacks of racial judgement.

Which brings us to the true underlying factor of the battle. Is it a lack trust of UAE (i.e. racial profiling)? Or is it a labor issue (protectionism and isolationism)?

The port-management business is dominated by non-American companies in part because high labor costs drove U.S. firms out of the business. That's also in part the handiwork of the International Longshoremen's Association, an affiliate of the protectionist AFL-CIO.

And, lo, the New York Sun reported this week that "nearly every politician who has been at the forefront of the opposition to the Dubai deal is on the receiving end of some Longshoreman largesse" in the form of campaign contributions. They include New York Representatives Peter King (R), Jerry Nadler (D) and Vito Fossella (R) and Senators Clinton, Robert Menendez (D., N.J.), Chuck Schumer (D., N.Y.), Chris Dodd (D., Conn.) and Barbara Boxer (D., Calif.).

Another sign of the protectionism at work here is the call to give Congress a larger say in vetting such transactions. But the Committee on Foreign Investment in the U.S. (CFIUS), the interagency panel that reviewed the DP World contract, is an executive branch function precisely to avoid the parochial concerns that dominate Congress. If Congress ran CFIUS, every Member would have a chance to interfere with every private foreign investment.

In fact, under the CFIUS statute Congress is barred from being involved in the review process until it is over, and the political meddling we see with respect to the DP World deal is the reason. Such confidentiality is important because companies are often asked to disclose proprietary information to the government. This also explains why the Bush Administration didn't brief Congress up and down about the deal in advance.

Thank heavens Congress had the wisdom (or didn't they notice?) to write their own approvals out of the CFIUS equation until the process is done. Waiting for this group to accomplish anything besides spending like crazy is as rewarding as watching grass grow.

But there's no denying the Longshoremen's interests (or fears) at at the heart of the demonstrations taking place here in the US. And that is an age old story.... they fear their union paying jobs will be outsourced. A fear shared by so many others in manufacturing and industry, and one that has been going on for decades. Witness the US steel industry's gradual power demise starting back in the 70s.

Part of sussing thru all the emotional hype and misinformation on this deal is to find out exactly what all the objections are, and address them. And while the dissenters may not admit to a protectionistic stance, the effect on the union workers at the port indicate that too is ball in play. Yet the union contracts in the sale have been addressed.

But since too many aren't listening, it is now a matter of making public the details of the sale that speak to the fears that have everyone a'fire.


Ros said...

I am leaning towards protectionism. And if it was Australia it would also definitely be pay back time. As DP World is already in Australia and doing a very good job, and staffed by Aussies, not much opportunity for it here.
I note that vocal opponent to DP World, Bentley (as they say longtime friend of longshoremen) seems to be far less concerned now about the need to be efficient on the wharves.
Helen Delich Bentley, a consultant at the Port of Baltimore and a longtime friend of the ILA, focused on a different aspect of the Maritime Transportation Safety Act of 2002 and the drastic changes that will go into effect with this legislation. The more than 700 pages of regulations threaten to choke American ports with burdensome reporting rules such as the “twenty-four hour rule,” which requires advance notice of the contents of all incoming containers, as well as crew-members’ names on foreign flag vessels for background checks.
And the ILA’s view of the legislation to protect US ports in 2004.
Ed Wytkind, Executive Director of the Transportation Trades Department, AFL-CIO also spoke out against unfair proposed criminal background checks for port workers, noting that if “we watched incoming cargo half as much as we watched America’s dockworkers” our ports would be much safer.
This misguided legislation endangers the health of our nation’s ports and therefore is harmful to ILA members. The further insult of proposed background checks is a slap in the face to the ILA, which has a deep tradition of patriotism and long has considered itself a committed part of the port “family” rather than the suspect outsider and weak link to which it has been likened.
An outsider might think that like Australia there are a few criminals on the wharves who need protecting.

MataHarley said...

Yup, ros. I'm coming to the conclusion that this is less about "security" and more about powerful unions and their beefs.

The 24 hour rule is one that Radm Gilmour (Asst Coast Guard Commandant for Prevention) discussed at the CFIUS briefing to SASC this past week. It's primary purpose is a prescreening of cargo PRIOR to loading at the port of origin. They can't possible inspect all containers or shipping efficiency would come to a halt. Thus they "score" containers for possible risk, and the 24 hour rule is a large part of that scoring process. Can't see anyway around it.

He emphatically noted that the port ops mgmt is *not* in possession of what containers were slated for inspections. And the "scoring" system now sheds more light on the "only 5% of containers are inspected" charge.

Wytkind's comment about watching incoming cargo is viable, but not something that is ignored. They are putting more and more checks in place to do just that. But that doesn't eliminate the need to also stay vigilant on the dockworkers as well. It is a sensitive issue for security. And both aspects - dockworkers and incoming cargo precautions - are necessary, IMHO.

Personally I think the port workers will just have to get over the "insult" of background checks. Hang... I don't work in that industry, but in my job, I was required to have a background check run, and supply full fingerprints to the FBI, in order to get my license. Fact of life, and not something I believe is a legitimate beef.

Besides, for any new port workers that come in under port operations, this will ease the public's troubled minds over who is working the docks.