Will killing Dubai deal hurt U.S. exporters?

Effect on U.S. port operators
The House member in whose district Boeing’s largest aircraft assembly plant is situated, Rep. Rick Larsen, a Democrat, said, he didn’t know whether the Dubai tussle would chill US exports but he added, “I would expect there may be some reciprocal action by other countries if we ban foreign ownership of port terminal operations. We do have to address the security concerns that many people have about this (Dubai Ports) deal. But the flip side of that is that we should expect reciprocal action by other countries.... If there are reciprocal actions it may focus strictly on U.S. terminal operators operating in other countries as opposed to spilling over into larger economic transactions between those two countries.”

Larsen cited a Seattle firm, SSA Marine, which operates port facilities in Mexico, Panama, Chile, New Zealand, and Iraq, as well as in the United States, as one that might be affected by a backlash to congressional action limiting foreign firms running U.S. port operations. SSA Marine is the world’s largest privately held container terminal operator and cargo handling company.

Another Washington member of the House who is closely watching the Dubai furor is Democrat Norm Dicks, a firm ally of free trade — he was one of only 15 House Democrats to vote for last year’s Central America free trade accord. Dicks has been a Boeing supporter for years.

'Highly emotional issue'
Asked if a Dubai backlash might hurt American exporters, Dicks said “I certainly hope it won’t. I hope that they (Dubai investors) will realize that this is a very highly emotional issue here in the United States.”

Reprising the arguments on both sides — some of the 9/11 hijackers' financing flowed through Dubai banks, yet, according to Joint Chiefs of Staff Chairman Gen. Peter Pace the U.A.E. has been a reliable ally of the United States since 9/11 — Dicks concludes, “this is a very tough issue.”

As for Boeing employees, Dicks said, “Boeing is going to continue to survive with or without a future order from the U.A.E. In fact, they’re having a hard time producing all the planes people want right now.”

So far the ports furor has not become a big issue in the Senate race in Washington state where first-term Democrat Sen. Maria Cantwell faces GOP challenger Mike McGavick, the former CEO of the Safeco Insurance Cos.

Cantwell said last month that she was “deeply disturbed” by the Bush administration’s decision to OK the Dubai Ports World proposed acquisition of port operations.

McGavick said the right approach to the ports controversy is to "slow down and learn more."

He said, "the thing I'm most interested in learning is the security risk — if any — in this transaction." On that issue, he said, "the jury is still out."

He described much of the reaction to the ports deal as "everybody decides immediately according to a political calculus." He added, "I refuse to jump in" and join "the reactionary behavior I'm seeing. To immediately assume this (deal) is a security risk is false."

He said among the factors to be weighed is "the exposure of companies like Boeing" if the Dubai deal is killed.

"If we decide we will reject allowing the U.A.E. to have relations with us that many other nations have, it's going to be a clear offense to them. The risk we run is that they'll re-evaluate the relations they have with us."

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