27 February, 2006


The possible takeover of the management of six US ports by Dubai Ports World (DPW) has created what Asia Cable’s Todd Crowell calls, and AsiaPundit agrees, xenophobia run amok.:

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.

PandoTake 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.

There was also similar uproar about the Hutchison Whampoa’s takeover of the Panama Canal, with critics alleging that Hutchison’s Li Ka-Shing was ‘too close’ to the Communist Chinese. That may be true from some perspectives - AsiaPundit doesn’t imagine that Hutchison has any desire to reform Hong Kong’s LegCo along more democratic lines. But suggesting that Li would put US security at risk is risible.

While Li has inarguably been enriched by the Hong Kong cartel system and Li’s cozy relationship with governments, British as well as Chinese, his shipping conglomerate was enriched by Hong Kong’s ability to function as a free port. The Panama Canal pursuit was based on nothing more than that.

Similarly, Dubai - more than anywhere else in the Middle East - has benefitted from running its own free port. The Emirate is not energy-rich compared to its neighbors and has gained its wealth by modeling itself after Singapore and Hong Kong. The investment by DPW should be no more feared than the investment by Hutchison, or any investment by Singapore’s PSA.

When it comes to keeping its ports operational, a bigger concern for US authorities should be the country’s own labor unions - who regularly tie up container traffic and resist automation that would help detect terrorists threats.

AsiaPundit would like to see America be a bastion of free trade and investment. If the country is to insist on liberalization abroad, it should practice it at home.

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by @ 11:45 pm. Filed under Singapore, Hong Kong, Asia, East Asia, Economy

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