The facts about the portsLast week, a $6.8 billion deal put the operation and control of the Port of New York and New Jersey in the control of Dubai Ports World, a firm in the United Arab Emirates owned by the government of Dubai.
Now, says N.J. Governor Jon Corzine, New Jersey is suing the Bush administration to block the deal.
What does it mean that the Port of New York and New Jersey will be in the hands of Dubai?
The port is already under foreign control, under the management of the London-based Peninsular and Oriental Steam Navigation Co. (P & O). The government of Dubai recently won a bidding war for the company and, as a result, will assume control of most operations at six ports on the East Coast, including New York, New Jersey, Baltimore, New Orleans, Miami, and Philadelphia.
U.S. lawmakers who learned of the sale after it was a "done deal " have expressed outrage. A bipartisan group of legislators has called for the Treasury Department to carefully review the new arrangement and to scrutinize all security issues before control is turned over completely. Calls for President Bush to intervene have fallen on deaf ears, and the president has said he will veto any attempt to stop the sale, insisting it will not compromise national security.
Some legislators, including Sens. Robert Menendez (D-N.J.) and Hillary Clinton (D-N.Y.), plan to offer a bill banning companies owned or controlled by foreign governments from acquiring U.S. port operations. Apparently, similar concerns were raised when a Chinese state-controlled oil company tried to acquire the U.S. oil company Unocal. After pressure from American lawmakers, the foreign company eventually dropped out of the bidding.
The Committee on Foreign Investment in the United States, which reviews the security implications of foreign takeovers of strategic assets, did not object to the UAE transaction. Nor did Homeland Security Secretary Michael Chertoff, who said the government always builds in "certain conditions or requirements" companies must observe in the interests of security. Nevertheless, legislators are questioning not only port ownership by a country with a dubious record on terrorism but also whether the government did an exhaustive analysis of this particular deal before approving it.
The United Arab Emirates has been cited as an operational and financial base for the perpetrators of September 11. In addition, the country continues to recognize the Taliban as the government of Afghanistan and is said to have been an important transfer point for shipments of nuclear components sent to Iran, North Korea, and Libya by a Pakistani scientist.
Except for cargo screening performed by the Department of Homeland Security, the port operator is responsible for securing cargo coming in and out of the port, the port facility itself, and the hiring of security personnel. Legislators are now questioning what checks have been put in place to ensure that the ports even if they are run perfectly will not be infiltrated.
Opponents point out that our ports have long been considered the most vulnerable targets for terrorist attacks. Many experts agree that shipping containers are the best way to smuggle weapons of mass destruction into the country. In addition, only five percent of containers entering our ports are actually inspected by the government, with the rest under the control of the port operators. The Port of New York and New Jersey has seen a significant increase in sea cargo over the last few years. According to Sen. Charles Schumer (D-N.Y), the port off-loaded 1,654,483 cargo containers during the first six months of ‘005.
Due to its strategic location, Dubai has long been a major center of trade and commerce. Today it is a prime contender in the global economy and has one of the most open foreign trade policies in the region.
The Dubai Development & Investment Authority boasts that the country with 1.8 billion people and 53 languages has extremely "business friendly regulations." The group reports that "a critical mass of multinational companies are operating out of Dubai today with a significant representation of the Global 500, including all of the top 10." Dubai has also become a leading exhibition center and conference venue.
The UAE is a federation of seven emirates Abu Dhabi, Dubai, Sharjah, Ajman, Fujairah, Ras al-Khaimah, and Umm al-Qaiwain. Political power is concentrated in Abu Dhabi, which controls the vast majority of the UAE’s economic wealth and resources. The current head of state, Sheikh Khalifa bin Zayed al-Nahyan, took office in November ‘004, following the death of his father, Sheikh Zayed bin Sultan al-Nahyan.
The two largest emirates Abu Dhabi and Dubai provide over 80 percent of the UAE’s income. The UAE has been a member of the World Trade Organization since 1995 and in March ‘005 began negotiations with the United States on a possible free trade agreement.