Port Split

Larry Kudlow
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Posted: Mar 05, 2006 12:05 AM
As the review period intensifies over plans for Dubai Ports World to take over some operations at six U.S. ports, President Bush is facing an uphill battle to get the deal through. Congressional opposition is widespread and a number of polls say the American public is largely against it. Unfortunately, conservatives are badly split on the issue. Commentators like Charles Krauthammer, David Brooks, Jack Kemp, and myself are in favor of the deal, while others like Bill Bennett, Michelle Malkin, and Pat Buchanan are very much opposed.

From my standpoint, taking into account all the editorializing, talk-show tempests, and political sound bites of recent weeks, I have yet to see any real evidence that the deal will compromise U.S. national security. Objections raised by the Coast Guard have been resolved, and the fact stubbornly remains that along with U.S. Customs and Homeland Security, it is the Coast Guard, not DP World, that will ultimately run the show when it comes to protecting port operations. If additional screening and surveillance safeguards need to be built into the deal, including radiation tests, so be it.

U.S. Coast Guard (Ret.) Captain John Holmes, who headed ports in Los Angeles and Long Beach, California, on 9/11, made the point to me that the same longshoreman and stevedores now employed at U.S. ports will continue to unload cargoes, although a thoroughgoing check of all personnel credentials is essential. He also reminded that U.S. companies have been out of the port management business for some time; this is a foreign-run function and will remain so.

Meanwhile, some conservative critics have latched on to the sixty-year-old Arab League boycott of Israel. But this is more rhetoric than reality. State-owned DP World operates out of the United Arab Emirates, but the UAE is a member of the World Trade Organization and is negotiating a free-trade deal with the United States. More, DP World does huge business with Israel’s largest shipping line, Zim Integrated Shipping. Zim’s chairman, Idan Ofer, defended DP World in a Wall Street Journal story, expressing his “complete dismay at the way [DP] is being pilloried in the United States.”

In fact, the Bush administration’s plan to create a U.S. free-trade zone across the Middle East is one of the most positive initiatives in the effort to defeat fundamentalist Islamic terrorism. Let’s not forget that the UAE in the post-9/11 world has become a strong American ally. They were one of the first nations to join the U.S. initiative to inspect cargo in foreign ports and have greatly strengthened their anti-money-laundering and terror-financing clause. They also accept U.S. aircraft carriers and subs at their deep-water ports and dry-dock facilities. Among these facilities is the DP World administered Jebel Ali port in Dubai. More, they allow U.S. military planes to land and refuel at their air bases. If the UAE ever retaliated and cut off U.S. military access, we would never be able to conduct operations anywhere in the region.

Yes, DP World is a state-owned enterprise, but if that criteria were used to oppose an economic relationship, we’d have to terminate all activity with communist China and state-owned oil companies in Saudi Arabia, Russia, Venezuela, and Mexico. Instead, I would argue that increased economic connectivity, supported by the free flow of trade, investment, and labor, makes for better political relations between nations. Connectivity liberalizes authoritarian regimes in the direction of democratization.

When you scratch this debate among conservatives deep enough, what you are left with is a clear demarcation between free-traders and protectionists. Those conservatives who oppose the deal are lining up with xenophobic protectionists like my old friend Patrick Buchanan. On the other hand, conservatives in favor of the deal align themselves with the pro-growth, free-trade tradition embodied by Jack Kemp. The Kemp adherents believe in breaking down global barriers in order to enhance prospects for prosperity and freedom everywhere. That’s in large part what the UAE/DP World episode is all about.

Whether it’s anti-Arab Islamophobia or anti-Mexican Hispanophobia, the fear-mongers in the conservative ranks do not truly believe in economic opportunity. Nor do they believe in Ronald Reagan’s “City on a Hill” vision of America, where it is our charge to lead the world toward free-market prosperity, political democratization, and true freedom for all peoples.

Yes, there is a rift in the conservative ranks. Opposing President Bush are those with a vision of pessimism, defeatism, and fear. Supporting the president are those with a Reaganite vision that brims with opportunity, victory, and success in the spread of freedom and democratization. Can there be any serious question that the resounding conservative Republican ascendancy and success of the past 25 years launched by Ronald Reagan and advanced by George W. Bush is built on optimism -- and positive results? I think not.