House, Senate Battle President on Ports Deal

The House Appropriations Committee approved (62-2) a bill Wednesday that would prevent United Arab Emirates firm DP World from taking over the management of US ports. Currently, UK-based P&O -- which is being acquired by DP World -- manages more than 20 facilities from Maine to Texas.

In the Senate, Charles Schumer (D-NY), a New York Democrat, proposed blocking the deal with an amendment to the lobbying-reform bill; the Senate does not require that amendments have "nexus" (be related) to the parent bill.

The issue has become a political hot potato because almost two-thirds of American voters oppose the deal, according to a CNN/Gallup/USA Today poll. The British Court overseeing the deal approved the sale on Wednesday, rejecting objections of Florida-based Eller Company, which had contracts with P&O.

According to a DP World executive, the "US component [is] a small part of the deal and less profitable than other parts of P&O’s container terminals business." The Financial Times reports that "[p]rivate equity groups have approached DP World about buying the US operations."

Media continue to under-report the scope of P&O's operations in the United States, although they now refer to the famous six ports as "container" facilities. The P&O website shows 21 facilities; another Florida contract is pending.


In addition, media reports, such as this at the BBC, ignore the revised list of affected ports that appears on the Department of Homeland Security website:

• Baltimore
• Houston
• Miami
• Newark/Elizabeth
• New Orleans
• Philadelphia

Globalization Backlash
Americans are now on the receiving end of what others around the world have had to endure when US corporations made major investments in their infrastructure or culture. And the ports deal is on the tip of the investment iceburg.

The BBC reports that a surplus of oil money has led to a buying (or investment) spree. "n the past 18 months alone, UAE based companies have bought a $2bn stake in Time Warner, a $1bn stake in DaimlerChrysler, a $700m hotel in New York, the port assets of America's CSX Corporation and a 25% stake in a Canadian aluminium smelter."

Bloomberg reports that half of the "more than $475 billion in [multinational mergers announced in 2006 are] cross-border deals." This is the "busiest start for any year since 2000." Foreign direct investment was $897 billion last year, a 30 percent increase, according to United Nations data.

In addition to the US-UAE deal, there are controversial acquisitions proposed in China (national security is the rationale for barring "foreign investment in Chinese television networks and publishing houses"); France (controversial $23 billion offer for Arcelor SA, with 26,000 French employees, by Rotterdam-based Mittal Steel Co.); Poland (the government is blocking an Italian firm's proposed purchase of a Polish bank); and Spain (Barcelona-based Gas Natural SDG SA's and Germany's E.ON AG are fighting over Madrid utility Endesa SA).

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