This paper focuses on the positive side of the debate should DP World have been allowed to buy the U.S. ports. This is the view from my own opinion of the deal which took place in 2006. The introduction gives an overview of DP World Company and the body discusses the arguments for this debate. On the other hand, the it also discusses facts which support the opposition side for this debate. It goes further to provide the rebut of the opposition points illustrating them through examples. Finally, the conclusion gives the final opinion in support of the motion that is DP World should have been allowed to buy the U.S. ports.
Dubai Ports World is a leading in international marine terminal which offers operations and development, logistics and other related fields. It focuses on ensuring efficiency and expertise through their leadership to foster innovation and commitment to their customers across the world. It has its operations stretched in more than 60 terminals in six continents. Its container handling is estimated to generate revenue of 80% of its total earnings. Furthermore, the port has its services in other 13 countries and thus it can be said that its services are efficient (Kirkwood, 2006).
Following the motion in hand, DP World had approached the Committee on Foreign investment in the United States (CFIUS) in the year 2005 with an aim of acquiring the British firm P& O. It also expressed interest in purchasing six U.S. ports something which led to the rise of the debate in hand. People took different opinions on the same with some supporting the deal and others opposing it. For instance, the intelligence and security officials were not for the deal since they had a feeling that the deal would compromise the U.S security. The following paragraphs of discuss the arguments for the deal and also there is some points arguing against the deal.
Main Arguments supporting the debate
It is true that Dubai Ports World to buy the U.S Ports. First and foremost, since 1999 Dubai Ports World had begun a strategy to expand its growth. Following operations in thirteen countries it implies that DP World has experienced an increase in its foreign direct investment inflows. Holding its operations in several different countries gives the company an advantage in handling the U.S. ports without any problem. This point argues that DP World has had good operation relations and it has never been compromised because of any insecurity issues. DP World has its operations in 13 countries and be it any cases of insecurity involved with its operations the company could never had any foreign direct investments with the super power countries such as British. In addition, the comments given by the countries to where it has operations are that they are happy with this company and they look for further investment with the company. An outstanding example is the comments from the Zim Integrated Shipping Services CEO that not at any single period has he heard any security issue its ports or in any other port operated by DP World. It should not be forgotten that it’s the work of the U.S. to oversee the security of its country.
Secondly, the company being situated in UAE gives the company an upper hand to be allowed the deal. This is because the UAE is a greatest partner of the U.S. in several other foreign based investments most important being the focus on the global war towards terrorism. In addition from President Bush point of view, DP World should have been awarded the deal since he believed that UAE could not allow DP world temper with the bilateral trade relationship with the U.S. since it was a beneficiary in the same (Kirkwood, 2006).
Furthermore, the investment of DP World in the U.S. ports would let the U.S. enjoy the privileges related to investments by large companies. There is a huge foreign investment flows to the U.S. from UAE. This to imply that the investment of DP World Company in the U.S. ports would help the country to control its huge investment outflows it dedicates to the operations of this ports. Therefore, welcoming the deal will give an advantage in the U.S. to reduce its large expenditures related to these ports.
Moreover, the acceptance of this deal would have strengthened the relation between the U.S. and the UAE. This means that U.S. could have stood a chance to invest more in the United Arab Emirates. The deal would also help the UAE government officials believe that there is a strong bond with the U.S. towards investment. Holistically, it would help in reducing the feeling from the UAE that an aspect of commercial relationship is the main agenda in foreign investment partnership. Finally, it would be good for DP World to have been allowed the deal to reduce the criticism which stands that the U.S. discriminates the Arab countries (Kirchgaessner, 2006).
Facts supporting opponents Position in this debate
Although my opinion in this case is to support the debate, there are some points which support the opposition side of this debate. First, the move to buy the U.S ports would compromise the security. This is because ports are subject to the introduction of illicit weapons and also raise the levels of terrorism. This is to imply that if DP world was allowed to buy the U.S ports then there was a likelihood increased concern of the U.S. security. The September 11, 2001 attack in the U.S is an outstanding example which supports the point that if the transaction was allowed to take place then security would have been compromised. From a research carried in the ports in relation to security levels, it’s true to say that about 95% of shipping containers enter a country through the port without an inspection. This leads to increased chances of terrorist’s activities which may cause harm to the country (Carter, 2008).
Furthermore, following that instance many had the argument that no foreign government should be permitted to buy strategic assets in the U.S. This is to say that the security of the U.S ports should be in hands of American firms where there is enough control from the American government. Moreover, in support of this argument, DP World is based in UAE’s whose past actions are linked to funding of the terrorist groups something which meant DPW’s ownership to increase discomfort over the deal.
Nevertheless the argument that the U.S feared to offer the deal to DP World in consideration of the impacts involved for the U.S. government to arbitrate trade and free enterprise. The U.S. regulations towards the privately owned business are excess and thus they affect negatively the ability of business to run efficiently at a profit. Though foreign direct investment has more advantages, the U.S. had a feeling that the acquisition of its ports would have an adverse effect to its economy. The idea is that increased foreign investments in the U.S. would compromise the growth of local companies.
Rebut for the facts supporting the Opponents side.
Though, DP world is opposed in getting the deal due to fear concern on terrorism, Israel’s largest shipping firm opposes these sediments. It argues that for long it has operated with DP World in Zim Integrated Shipping Services and not at any single period has it ever had any security issue in its ports or in any other port operated by DP World. The CEO of Zim Integrated Shipping Services Idan Ofer expresses his contention with the DP World and proudly invites the company to operate even in the future. Furthermore, it can be argued that UAE joined efforts with U.S. in the global war on terror and thus declining the DP World deal on security reasons should not be the concern. Moreover, UAE stands as a strategic partner of U.S. after having allowed its military access its airspace, ports and land for controlling operations in Iraq and Afghanistan (Carter, 2008).
On the other hand, although the use believes by allowing the deal will affect its local industries performance negatively, much concern should be on the number of benefits which accrue from the transaction. First, is the commercial relationship of the U.S. with the Arab countries giving it an advantage to invest more in these countries. In addition, it would serve as a proof that the U.S. does not discriminate the Arab countries in way when it comes to foreign direct investment.
Conclusion
On the other hand, U.A.E. has also proved to be a partner of the U.S. in fighting terrorism Afghanistan by allowing the U.S. military to use its airspace, land and water space in accessing Iraq and Afghanistan. It’s actually impossible for a country to allow another country to use its resources and still terrorist intention towards the country. This is to imply that DP World have no intentions whatsoever to compromise the U.S. security when awarded the deal. Therefore, it’s in my opinion that the DP World should be allowed to buy the U.S. ports.
Carter, R. G. (2008). Contemporary cases in U.S. foreign policy: from terrorism to trade (3rd ed.). Washington, D.C.: CQ Press.
Committee on Foreign Investment in the United States (CFIUS), one year after Dubai Ports
World: hearing before the Committee on Financial Services, U.S. House of
Representatives, One Hundred Tenth Congress, first session, February 07, 2007.. (2007).
Washington: U.S. G.P.O. :.
Kirchgaessner, Stephanie (February 28, 2006). "US Coast Guard warned on Dubai ports deal - FT.com". Financial Times. Retrieved 21 September 2012.
Kirkwood, R. C. (2006, March 20). Sink the Dubai Ports Deal! Our Ports Are Gateways to
America, and It Does Not Make Sense to Put Them under the Control of a Foreign
Power-Particularly an Islamic Regime Tied to Al-Qaeda. The New American, 1, 2.
Rubin, T. (2006, March 1). The real threat to safety of U.S. ports isn't Dubai.. The Philadelphia
Inquirer, p. 260
Links
http://www.nti.org/analysis/articles/dp-world-and-us-port-security/
http://www.greatamericanjournal.com/editor/archives/Should%20%27Dubai%20Ports%20World%27%20Take%20Over%20Our%20Ports_.htm
http://www.uspolitics.about.com/od/dpworldpurchase/DP_World_Purchase_of_UK_Port_Firm.htm
http:// www.globalstrat.net/case_studies.php
http://www.insidebiz.com/news/dp-world-backlash-was-hysterical-many-maritime-leaders-agree
