[VIEWPOINT]Show appreciation to allies

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[VIEWPOINT]Show appreciation to allies

Consider the following three pieces of news from the part of the world ― the West ― that has profited more from globalization and the explosion of trade and investment in the last 200 years than any other area. In France, the government has pushed two huge utilities, Suez and Gaz de France, which are partly state-owned, into a merger so as to prevent a takeover of Suez by its Italian rival Enel. In Spain, the government is blocking a bid by Germany’s energy giant E.on for the country’s largest electricity producer, Endesa. In the United States, Congress is up in arms because the Bush administration has given permission to Dubai-based DP World to buy into six American ports including Miami and New York.
Of course, the argument is always about strategy and security, but at least in the French and Spanish case, the real reason is economic nationalism. Listen to French Prime Minister Dominique de Villepin: “Taking into account the strategic importance of energy, the merger of Gaz de France and Suez seems the most appropriate track.” But what he really means to say is: “no foreigners!” In the U.S., fear of foreigners was a bit harder to stoke because those six ports are already owned by a non-American company, namely Britain’s Penin-sula & Oriental Steam Navigation Company. So congressional critics of the transfer invoke 9/11 and the war on terror.
Led by New York’s Senator Hillary Rodham Clinton, the opponents of the deal complain that Dubai’s DP World is government-owned and that two of the terrorists who destroyed the World Trade Center were citizens of the United Arab Emirates, of which Dubai is a part. This argument does not hold much water because the security of the ports will still remain under the control of the U.S. government, no matter who runs them.
The U.S. Coast Guard is, and will remain, in charge of overall security. The U.S. Customs Service will continue to check ships and containers for terrorist contraband. They are assisted by special harbor patrols and the harbor police. In other words, the Dubai company would manage operations, but the American authorities would, as always, take care of border security.
In the French and Spanish cases, the government invoked not terrorism, but “energy security.” This is even more of a bogus claim than the argument about leaving America open to terrorist infiltration. In the European takeover battle, the other side does not consist of Arab states, but private companies based in Germany and Italy, countries that are members of NATO and the European Union, which is dedicated to a single European market for goods, capital and labor. How can Germany’s E.on threaten French security? Is Italy going to invade Spain? This is the 21st century and not the eve of World Wars I and II.
The gist of this tale is a classic 17th century reflex, when kings believed that a nation’s strength came from autarchy and maximum control over the economy. Every-thing was “strategic” ― not only arms making, but also wheat production, porcelain manufacture and import monopolies. The theory was known as “mercantilism” and the rule was to export aggressively to other countries, but to protect one’s own industries from imports and competition. It took the Europeans the next 300 years to learn that the road to prosperity and growth led exactly in the opposite direction: toward competition and specialization, free trade and free investment.
Spain and France want to turn the clock back to the 17th century. While encouraging their own companies ― especially telecoms and utilities ― to expand across borders, they are simultaneously creating “national champions” strong enough to repel such incursions from other countries. This is nothing but “neo-mercantilism.” If they succeed, their neighbors will retaliate with economic nationalism of their own, and there goes the dream of a single European market of 450 million consumers.
But the battle is not yet lost, and so the European Commission, the guardian of European integration, has threatened to take legal action against Spain’s and France’s neo-protectionism, which is a cardinal sin against the very idea of Europe. One also hopes that the Bush administration will prevail against its Congressional foes. His best argument is a geopolitical one. It turns out that Dubai has been one of America’s best friends in the Greater Middle East.
Last year, more than 500 U.S. Navy ships docked in Dubai, and American warplanes have been flying support missions for Afghanistan and Iraq from Dubai airfields. Or as Republican Senator John Warner put it: “We can’t treat this country like a second-class citizen. We are dependent on countries like Dubai, Qatar, Bahrain and Kuwait. We cannot mess this deal up.”
Senator Warner, a possible candidate for the presidency in 2008, is right. The small Gulf sheikdom of Qatar, which like Dubai is part of the United Arab Emirates, hosts the largest American air force base outside the United States.

* The writer, the publisher-editor of Die Zeit in Germany, is currently teaching U.S. foreign policy at Stanford University, where he is also a fellow at the Hoover Institution.

by Josef Joffe
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