The furor over the proposed sale of a London-based firm that operates facilities at some U.S. ports to a company in the United Arab Emirates has focused Congress’s attention on the issue of maritime security.
The U.S. part of this deal appears to be dead, but real dangers remain — specifically, that Congress will implement policies that will not make Americans safer and could actually harm U.S. interests. There are at least four bad proposals on the table that Congress should reject.
Bad Idea No. 1: Throw money at the problem.
Congress’s first inclination will be to increase port security grants, which are popular among many Members’ constituents. However, Congress has already dumped hundreds of millions of federal dollars into these grants. The Homeland Security Inspector General found that this money is already being wasted and many of these grants brought only minimal benefits. One, for example, went to a Fortune 500 company with $1.2 billion in profits—to buy a fence. Spending billions to turn U.S. ports into mini-Maginot Lines is a losing strategy. Investing federal dollars in the Coast Guard, counterterrorism operations, intelligence, and law enforcement activities makes more sense because all of these keep bad things and bad people out of U.S. ports to begin with.
Bad Idea No. 2: Adopt protectionist policies.
One proposal would require that all maritime infrastructure be U.S.-owned. This would lead to a substantial divesture of assets by foreign firms that have already invested in America. By some estimates, upwards of 80 percent of port facilities are foreign-owned. This ownership represents "in-sourcing" that creates jobs for Americans, makes imports cheaper, and makes U.S. exports more competitive. Divesture would cripple trade and destroy foreign investors’ confidence in the United States — to the great detriment of U.S. workers. And it won’t necessarily improve security — Enron, after all, was an American-owned company that did as much damage to the U.S. economy than a terrorist attack. Security standards have to be the same no matter who owns the ships and facilities that service our ports.
Bad Idea No. 3: Cripple foreign investment in the United States.
Some in Congress will propose to revise the law that governs the Committee on Foreign Investment in the United States (CFIUS), the panel that vets transactions in which foreign ownership might affect national security interests. Many Members of Congress fault CFIUS for its approval of the port facility sale. It is true that that the current system is too informal and should be improved. However, reforms should not encumber sales that do not impinge upon significant national security interests. Nor should any changes allow Congress to politicize the process.
Bad Idea No. 4: Inspect everything.
Inspecting every container that is shipped to the U.S. makes no sense. Doing so would cost billions of dollars and drown authorities in useless information. Nor is it clear why every container would need to be inspected. The "nuke-in-a-box" scenarios deployed to justify such drastic measures are highly implausible. Physically inspecting every container will not make Americans much safer but will increase the cost of just about everything that American consumers buy. Already, the United States evaluates every container coming into the country and inspects the suspicious ones. This is not a perfect system — it can be improved — but it is a reasonable precaution and reasonable deterrent.
Congress should do better than adopting proposals that will harm the U.S. economy while doing little to prevent terrorism.
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