WASHINGTON - US Congressional leaders are
pressing ahead with new legislation that would
give the secretary of defense and the US
intelligence agencies the right to oversee
acquisitions of certain US assets, and Congress
access to confidential business information
surrounding such deals.
The move comes as
a resurrection of protectionist policies, a hard
sell for the past few years during one of the
highest tides of corporate globalization, is
suddenly taking hold in Congress. But
some
prominent US business lobbies are resisting the
changes and warn that they could be
counterproductive.
Senator Susan Collins,
a Republican from Maine who chairs the Homeland
Security Committee, introduced a bill on March 13
to overhaul the national security review process
for foreign investments in the United States
following the controversy over a bid by a Dubai
company to operate port facilities in six US
cities.
The bill would place the Committee
on Foreign Investment in the United States
(CFIUS), which represents 12 US departments and
agencies and is now chaired by the secretary of
the treasury, under the direct management of the
Department of Homeland Security. It calls for the
secretaries of defense and the treasury to serve
as vice chairs, while the director of national
intelligence would be designated as a standing
member, in order to ensure that important
intelligence information was part of the
deliberative process.
Collins' bill, which
is backed by several other influential senators,
including Joseph I Lieberman of Connecticut,
requires that members of Congress be briefed in a
timely manner about prospective acquisitions in
the United States. "The Committee on Foreign
Investment in the United States focuses too much
on the financial component and not enough on
security," Collins said.
A number of other
lawmakers have introduced similar bills.
Democratic Senators Robert Menendez and Hillary
Clinton have sponsored legislation to block the
sale of US port operations to foreign governments,
while Representative Duncan Hunter of California,
best known for his "Buy American" crusade, said he
would use opposition to the ports deal to further
place protections on US jobs and businesses at
home.
Similarly, Representative Benjamin L
Cardin, the lead Democrat on the House Trade
Sub-committee, and the chairman of the
sub-committee, Representative Clay Shaw,
introduced legislation to prohibit foreign-owned
operations at US seaports.
And Senator
Norm Coleman, a Republican from Minnesota, has
introduced his own bill that would also bar
foreign government-controlled companies from
managing a national security-related "facility or
investment". That bill, however, would permit
foreign governments to own and invest in such
facilities provided that the foreign government
established a US-based corporate entity.
All these initiatives are being pushed
despite the fact that the Dubai deal collapsed
last week when the company said it would divest
its US ports holdings. And as lawmakers continue
to revisit the issue, they are likely to hammer
away at legislation targeting foreign investment
in the US.
Senator Charles Schumer, a lead
critic of the ports deal, said he would continue
to ask for specific information from the company
as to its withdrawal timetable. "We will do
whatever it takes to make sure DP World and
American ports are totally separate," he said.
Dubai Ports World, which is owned and
operated by the United Arab Emirates, backed out
of the US$6.8 billion deal, which had been
approved by CFIUS last month, after Congress'
House appropriations committee voted 62-2 to bar
DP World from holding leases or contracts at US
shipping facilities. In a statement on Tuesday, DP
World said it expected to sell the US ports assets
within four to six months to a US buyer.
The Democrats in particular are hoping to
capitalize on the unpopularity of the deal, and
appear intent on making protectionist measures and
national security a centerpiece of the campaigning
for midterm elections later this year in the
United States.
"This debate is not over,"
said Democratic National Committee spokesman Luis
Miranda in a recent statement. "Democrats have led
the fight to close the gaps in our nation's
security, and have stood firm in insisting that
America's security is America's business.
Republicans owe the American people answers as to
where they really stand, and should join Democrats
in working to do what they were elected for:
keeping America safe."
The only opposition
to this re-energized protectionist sentiment in
Congress so far has come from US business groups
that fear a backlash against their expansive
presence and free trade agenda across the globe.
On March 14, eight groups representing the US
business community cautioned against some of the
changes, including a proposed requirement of
disclosing confidential information on prospective
investments to Congress.
"Congress must
proceed with care as foreign investment is a
critical component of the US economy and vital to
future US economic growth," said John J
Castellani, president of the Business Roundtable.
"The danger in counterproductive legislation is
real," he said. "Congress must step back and make
certain any changes to the current system are more
than political window dressing."
The Bush
administration has generally sided with the
business groups, warning against the protectionist
backlash but approving an overhaul of the review
process for foreign investments. "It is vital that
we avoid taking steps in the name of national
security that instead are isolationist, having the
effect of choking off vital investments in
America," US Treasury Secretary John W Snow said
on Tuesday.
