Dealing with Dubai Ports World

Protectionism is the wrong solution to the port threat in the United States.

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This piece first appeared in the Baltimore Sun.

Criticism of a proposed merger that would give a United Arab Emirates company control of operations at six U.S. ports, including Baltimore, misses the point.

The deal between Peninsular and Oriental Steam Navigation Co. and Dubai Ports World (DPW) merits close scrutiny, but strategically should be viewed as a long-term security asset, not a liability.

Gov. Robert L. Ehrlich Jr. and Democrats and Republicans in Congress are right to ask tough questions about the merger. The Bush administration must demonstrate that it has performed due diligence through the Committee on Foreign Investment in the United States (CFIUS) process. But while there are many reasons to be concerned about port security, which company writes the checks for American longshoremen is the least of those worries.

In fact, the merger should not pose national security concerns because maritime security is a global challenge. The real solution is not protectionism, but to build a truly integrated and effective global system that secures supply chains from the point of manufacture through foreign and U.S. ports all the way to local store shelves. That requires making maritime security a higher homeland security priority.

Our economy, and therefore our security, depends on the free and secure flow of goods to and from our shores. About 90 percent of the manufactured goods we import arrive by sea. About 9 million shipping containers each year flow through 361 U.S. ports. Baltimore, for example, is the 14th-largest port in the United States in terms of tonnage and seventh in cargo value.

Any interruption in the global movement of goods, whether because of terrorism, a storm or a dockworker strike, can instantly cause billions in economic losses. If a nuclear or radiological device were smuggled into the United States through one of these shipping containers, it could shut down the world economy.

There are shared incentives among governments, port authorities, the maritime industry and the private sector to ensure this does not happen. Maritime security standards have been strengthened nationally and internationally since 2001. Success depends upon cooperation among a wide range of players — manufacturers, freight forwarders, port operators, ocean carriers and insurers; most are foreign-owned.

In fact, the leading port operators worldwide that process the majority of shipping containers bound for the United States are owned by companies based in Hong Kong, Singapore, Denmark and Britain as well as Dubai. So our maritime security already depends upon the cooperation of foreign governments and foreign-owned businesses.

The UAE is the United States’ third-leading trading partner in the Middle East after Israel and Saudi Arabia. It is a leading ally in the Persian Gulf region.

Before 9/11, the UAE’s record in combating terrorism was mixed, particularly with respect to lax banking regulations and oversight. The UAE was used as a staging area and commercial hub by some of the hijackers. But cooperation has improved significantly since then. Dubai is one of 37 international ports that participate in the Container Security Initiative (CSI), a program that attempts to identify anomalies with shipments before they leave for the U.S. It is part of the global maritime security system.

There are better ways to improve port security in Baltimore and across the country than trying to block the merger. Specific actions can dramatically improve port security.

First, the Department of Homeland Security needs to make port security its top priority. Since 9/11, DHS has devoted three times as much to aviation security as maritime security. This is like fighting the last war.

The Coast Guard estimates that $5.4 billion is required to implement port security improvements called for in the Maritime Transportation Security Act. Yet Congress appropriated only $175 million in port security grants this year. Congress should triple that.

Second, customs agents physically inspect only 6 percent of the 9 million shipping containers that flow through U.S. ports annually. Every suspect shipment should be scanned using the best available radiation detection equipment. Every U.S. port should be required to have radiation isotope identifier devices to reduce the chances that a nuclear or radiological device can be smuggled into the U.S.

Third, DHS should expand the number of personnel assigned overseas (with language skills) to work at foreign ports, inspect more shipping containers before they are loaded on ships destined for the United States and verify the security of foreign supply chains. Smart containers with tamper-proof seals and global positioning systems should be introduced as soon as possible.

It is Osama bin Laden and his virulent followers who want to disconnect the Middle East from the rest of the world. Integrating the Middle East into the global trading system and linking countries such as the UAE and companies such as DPW to international norms, profits and responsibilities are the ultimate solution to jihadism and extremism. This requires the United States to think strategically and act globally, not parochially.


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