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March 9, 2006
The Smart Move For Everyone

Dubai Ports World has just put an end to the controversy generated over its purchase of P&O and the operations contracts held in six major American ports. They have agreed to sell the American business to a "US entity", allowing all of the hot air to escape this debate:

A Dubai-owned company said Thursday it is giving up its management stake in some U.S. ports, a move made as congressional leaders warned President Bush that both the House and Senate appeared ready to block the takeover. ...

"Because of the strong relationship between the United Arab Emirates and the United States and to preserve that relationship, DP World has decided to transfer fully the U.S. operation of P&O Operations North America to a United States entity," DP World's chief operating officer, Edward H. Bilkey, said in the statement that Warner relayed to other senators. The announcement did not specify which American company would be involved.

The move came as the White House, facing a Republican rebellion in Congress, played down President Bush's veto threat and said he was trying to find a compromise to resolve the uproar over the company's plan to take over significant operations at several U.S. sea ports.

DP World said it will transfer all interest in U.S. port operations to an American-based company, but it was unclear immediately how DP World would manage the divestiture. The company indicated that details of the surprise deal were still being worked out.

It looks like the compromise found the White House instead. This solution has been suggested by many people, including my occasional co-blogger Dafydd at Big Lizards when the issue first arose. It took a fortnight of hysteria, hypocrisy, and rampant misinformation to resolve this dog of a deal, a process which should thoroughly embarrass everyone involved.

The new deal works for the President; he can maintain credibility with a strategic partner in the war on terror, and as more facts come out as the shouting subsides, his position will improve. Congressional Republicans get to claim their independence from the White House. Congressional Democrats get to brag about their insistence on ignoring their own call for a second security review and claim the result as a win. DP World gets to dump the worst part of the P&O deal onto an American company that will get to deal with the political fallout of the controversy.

The only losers appear to be Hillary Clinton and the state-owned foreign firms doing exactly what DP World wanted to do with these terminals. Hillary still has to explain why she so vigorously opposed a deal that her husband actively facilitated, which promises some interesting rhetorical contortions later in the election season. The other firms from China and Saudi Arabia should face the same level of scrutiny as DP World, if Congress actually gives a damn about port security and all the concerns they raised over the DP World deal.

Of course, that's a mighty big if.

Sphere It Digg! View blog reactions
Posted by Ed Morrissey at March 9, 2006 1:25 PM

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