Just the beginning

Just the beginning

It was impossible to watch the events surrounding the DP World purchase of P&O without wondering who to blame for the debacle that followed. It's not like the deal was shrouded in secrecy. It has been all over the trade press for months. Then again, maybe that was one of the problems; the general press ignored the story. When it finally climbed aboard, it showed its ignorance about port security. But the story doesn't start or end there.

The story starts with the review of the deal conducted by the Committee on Foreign Investment in the U.S. It reviewed the deal and, with input from Homeland Security and other departments, the deal was approved. You can't blame the civil servants who performed their duties as part of the CFIUS review for what followed. What was amazing was the political appointees around those civil servants who didn't see the furor coming. Whether you're a Democrat or a Republican, you had to admire how the Bush administration played politics, at least early on. But talk about making the critical error when the game was on the line! It makes the ball that went through Bill Buckner's legs during the 1986 World Series look like child's play!

You have to give Eller & Co. credit. It played hardball politics, and its efforts framed the issue - Arabs, and untrustworthy ones at that, were taking over U.S. ports! Once the fire-storm started, there was no stopping it. Eller, which provides stevedoring services in Miami through a joint venture with P&O, started the maelstrom by saying it would be damaged by having to be in that joint venture with DP World. It was Eller's claim that DP World would threaten port security that caused the general press to foam at the mouth. Eller managed to give just enough red meat to the press that it won the war despite losing the legal battles.

It didn't matter that Dubai was part of Customs' Container Security Initiative and agreed to upgrade and meet P&O's Customs-Trade Partner-ship Against Terrorism security standards. Nor was it of consequence that the head of Israel's largest liner carrier, Zim Integrated Shipping Services, came to DP World's defense against claims of discrimination under the Arab League's well-known boycott. Lost in the hysteria was that Horizon Terminals, a subsidiary of Dubai-based Emirates National Oil Corp., operates a bulk liquid storage facility in Djibouti that was to store more than 100,000 metric tons of petroleum products, chemicals, vegetable oils and liquid petroleum gas. The U.S. Navy pushed to triple its capacity. There remains a tremendous need for bunker and jet fuel for the Navy fleet and aircraft.

DP World also has a 20-year concession to operate the Djibouti Port and Free Zone, as well as the nation's airport. The port is a key transshipment point to Africa and the Mideast. Dubai's Port of Jebel Ali is operated by the domestic arm of DP World. It is a key support base for the U.S. Navy. About 600 military-chartered cargo vessels transited that port last year. The Navy leases a secure area there to stow and consolidate cargo.

Why raise all of this when DP World has agreed to divest itself of P&O's U.S. operations? Because if what happened to DP World didn't scare the blazes out of you, please share whatever drugs you are taking. This fiasco is the best example of everyone's greatest fear of what will happen with trade and security.

There is no question that Congress as an institution is discharging its role as the independent legislative arm of the government, but come on! At least frame the issues properly. DP World was never taking over the ports. Does anyone beyond the most xenophobic of us really believe the threat starts upon arrival?

So we've talked about how the administration botched this effort. But let's be fair. The trade community didn't do its part, either. Where was the Business Roundtable? Where was the U.S. Chamber of Commerce? If we want to have reasoned and realistic rules and regulations controlling our daily international trading lives, then be afraid, be very, very afraid, because the groundwork is there for this to happen again. Just look at the legislation introduced in the aftermath of DP World.

There are so many bills in the legislative hopper that it is impossible to summarize them. If we are serious about security, then it has to come from reasoned and calm discussion. Is that possible with a lame-duck president in an election year?