Trading with the 'enemy'
8/13/2002 12:00:00 AM - Frank Gaffney
As America grapples with a two-front challenge -- the global war on
terror and the need to reinvigorate the U.S. economy -- its leaders are
hoping that expanded international trade can help solve both problems.
Unfortunately, if the machinations of the Chinese conglomerate Hutchison
Whampoa are any indicator, an indiscriminate approach to trading with
potential enemies could cost the United States dearly on both fronts.
Recent debates over granting President Bush Trade Promotion
Authority (TPA), according Communist China permanent "Normal Trade
Relations" status and permitting taxpayer subsidized trade with Cuba have
all implicitly, if not explicitly, shared a dubious conviction: Since
overseas commerce is an inherently good thing, the more of it the better.
This sentiment takes an extreme form among those who favor what
might be called a "trade uber alles" philosophy. These advocates tend to be
less than sensitive, to put it charitably, to the potential national
security risks associated with putting their philosophy into practice. Even
the relatively tangible repercussions -- such as the loss of indigenous
industrial capability and the attendant, increased reliance on foreign
suppliers for key components of weapon systems -- are typically dismissed,
or at least subordinated to the perceived greater good of developing
globalized relationships with trading partners.
To be sure, the most doctrinaire of Free Traders typically try to
conceal their insouciance about the defense implications of their policies.
They often assert that trading with authoritarian regimes that are either
our enemies today or that might become foes in the future can be safely
undertaken since it will inexorably transform them by creating a middle
class imbued with capitalist impulses and, in due course, with irresistible
This thesis may even be true in the long run. The problem is that
in the short- to medium-term, ill-advised trading with potential adversaries
can serve not only to prop up their regimes, but afford them opportunities
to do us great harm.
A case in point would appear to be Hutchison Whampoa, a Hong
Kong-based commercial empire founded and largely owned by a Chinese
multi-billionaire named Li Ka-shing. Li, who U.S. intelligence believes is
closely tied to the Communist leadership in Beijing, has turned Hutchison
into a global colossus described in a recent company press release as having
"over 120,000 employees worldwide, operat[ing] and invest[ing] in five core
businesses in 37 countries: telecommunications; ports and related services;
property and hotels; retail and manufacturing; and energy and
As noted in this space last month, one of Hutchison's subsidiaries
secured long-term leases at either end of the Panama Canal two years ago and
is currently hard at work acquiring a presence for China at other strategic
"choke points" around the world, including notably the Caribbean's Bahamas,
the Mediterranean's Malta and the Persian Gulf's Straits of Hormuz. At a
moment inconvenient to the United States, such access could translate into
physical or other obstacles to our use of such waterways.
An even more troubling prospect arises from a bid Hutchison Whampoa
and two partners (one an American company called Savi Technology) are making
to win U.S. government contracts to enhance security at American ports. The
lack of such security is widely understood to be one of the most serious
vulnerabilities facing those charged with homeland defense. Turning over
the design of a cargo-monitoring system to a company closely tied to the
regime in Beijing could mean affording the latter insights into how that
system can be defeated.
It would be decidedly in the interest of the Chinese People's
Liberation Army and its clients -- which include all the world's
terrorist-sponsoring states -- to know how to circumvent the techniques used
by the United States to protect American harbors from deadly attacks using
containers and/or the vessels that transport them. But it is certainly not
in our interest.
The same probably can be said of Hutchison Whampoa's just-announced
purchase of a 61.5 percent majority interest in the bankrupt Bermuda-based
telecommunications firm, Global Crossing Ltd. Global Crossing was the
original winner of a 10-year, $450 million contract to operate a high-speed
classified research network for Pentagon scientists. After the company went
belly up, WorldCom got the deal last April.
Even before the latter's corporate financial meltdown, however,
Global Crossing and other telecommunications companies were demanding that
the award be reconsidered. With Li Ka-Shing's infusion of $250 million into
Global Crossing, it may be seen as a viable competitor, assuming security
considerations are not allowed to get in the way. And why should they? If
Li and his friends are considered a safe enough bet to be put in charge of
monitoring what is coming into our ports, how could anybody object to fiber
optic cables he controls being used as the conduit for classified Defense
There is surely a place for genuinely free and fair trade in
America's war on terror. Those who are truly, as President Bush put it,
"with us" in that war should be among the beneficiaries of our efforts to
maximize reciprocal access to markets. However, some thirty years of
ever-expanding Chinese opportunities to sell in the United States have yet
to translate into comparable opportunities for American companies in the PRC
-- let alone transformed the government in Beijing into one that is reliably
on our side in the present global conflict, to say nothing of democratic.
Trade uber alles means, by definition, subordinating national
security considerations to the ambitions of those who seek profits through
commerce. In a time of war like the present, we simply cannot afford to
pursue such a policy to its illogical, and potentially highly destructive,