This morning I received a Treasury Department email reminding me of the damaging encounter that America had with Dubai and many Arab moderates and modernists when a bipartisan Congressional crowd forced the White House to privately tell the Dubai government owned DP World to drop its acquisition plans for a number of American port operations.
I received an announcement from the Department of the Treasury with a statement from Deputy Secretary Robert Kimmitt about an effort to modify the Foreign Investment and National Security Act (in part to avoid more debacles like the U.S.-Dubai fight):
The Foreign Investment and National Security Act is a well-balanced bill, and I commend this bipartisan effort by the Congress. This bill updates the Committee on Foreign Investment in the United States (CFIUS) and strikes the important balance between protecting national security in a post-9/11 world and advancing the open investment policy set out by President Bush on May 10 of this year.
I haven’t analyzed what changes to CFIUS have been made, but I do know that there is lasting damage in the United Arab Emirates and across the Gulf Cooperation Council as a result of the sloppy rejection of DP World.
The fear that many Americans had is that a multinational global firm based in the Arab world could not be counted on not to be “secure”; that Islamic jihadists might penetrate DP World and thus be able to smuggle people or WMD materials into the United States through port operations it was trying to acquire in Miami and elsewhere.
I don’t want to get into how shallow that debate is given the reality that Dubai and the UAE are vital to American national interests — and that this small emerging Hong Kong of the Middle East is among our best hopes is showing the promise of melding modernity and Islam.
I met UAE Economic Minister Sheika Lubna al-Qasimi during a trip to Dubai last year organized by Arab American Institute President James Zogby and heard from her that she was meeting or had recently met high-powered commercial missions from Korea, Japan, Germany, China, France, Australia, Russia, and Brazil, among others. But she said that “no American Commerce Secretary had made an official visit or brought a commercial mission to Dubai.”
This is somewhat shocking given Dubai’s importance to us — particularly given the tumult going on in that neighborhood and also given that many of Iran’s most internationally-minded elites hang out and invest in Dubai. Just to meet and know this part of Iran’s portfolio would be valuable.
Zogby, who as a close friend and aide to the late Commerce Secretary Ron Brown, thought that Brown had made a commercial visit to Dubai — but in checking the records, I have not found such a trip. Brown was clearly interested in building bridges to the Middle East which is commendable and should be noted, but as of this writing, I have not found evidence of a commercial excursion of American corporate players and government officials to Dubai.
(I have since writing this piece received a note from a Commerce Department official indicating that both Commerce Secretaries Brown and Daley did make trips to the UAE in the mid-1990s, so I stand corrected on the issue of Democrats going to the UAE — but stand by the view that the collapse of the ports deal was politically significant enough to justify further economic diplomacy from the Bush administration — but this has not happened.)
The DP World deal can’t be replayed to solve the wound of rejection that many Arab modernists feel. And I don’t know if the new CFIUS measures strike a clearer and better balance that would have preempted the mistakes made in this M&A deal.
However, I do think that much can be done on the public diplomacy side of things if Commerce Secretary Gutierrez began to use his position to help engender responsible, credible commercial engagement between American interests and those in Dubai and more broadly in the Gulf.
After the rejection of DP World, the first thing President Bush should have called for was a mission to the region and Dubai to demonstrate our commitment to modernists there.
— Steve Clemons
Side Note: DP World does remain interested in investing in the U.S. as evidenced by its acquisition of the Hotel Washington, right across the street from the Department of Treasury.