DON'T SWEAT IT--JOHN PODHORETZ WILL UNLOAD THE SHIPS FOR US:

Port Deal: Not a Foreign Idea (Laura Meckler & Daniel Machalaba, 3/10/06, The Wall Street Journal)

Amid the political firestorm surrounding Dubai Ports World, one fact is often lost -- foreign companies already manage most of the terminals at American ports, the result of a longtime dominance of global shipping lines that often run the facilities that handle their cargoes.

Today, more than 60% of the container terminals at the nation's 10 busiest ports are at least partly managed by foreign operators, and in some cases, companies controlled by foreign governments. That figure rises to 80% at the biggest ports -- Los Angeles, Long Beach and Oakland in California and New York/New Jersey, which together handle half of all containers that pass through U.S. ports.

"I don't think Americans have any realization of the global nature of the maritime industry," says Peter Shaef, managing director of New York-based AMA Capital Partners LLC, a merchant bank focusing on the transportation industry.

Yeah, but they wear their ignorance like a thorny crown.

MORE:
The New Protectionists: How to create a real security crisis. (Opinion Journal, March 10, 2006)

What's especially dangerous here is that we're seeing the re-emergence of the "national security" protectionists. They were last seen in the late 1980s, when Japan in particular was the target of a political foreign-investment panic. The Japanese were buying Pebble Beach and Rockefeller Center, and so America was soon going to be a colony of Tokyo. A Japanese bid for Fairchild Semiconductor of Silicon Valley was seen as a threat to American defense. Those fears seem laughable now. But here we go again, with new targets of anxiety.

Is This the End of Globalization? (Heather Stewart, 3/10/06, The Guardian)

Paris is slamming the gates on Italian energy firms, US senators are railing against an Arab buyout of American ports, Brussels is slapping tariffs on Chinese shoes: across the world, politicians and voters are lashing out against unfettered free trade. Is globalisation under threat from a protectionist backlash? [...]

'You have to ask, in the world of economics, what impact does nationality actually have?' says Roger Bootle, economic adviser to Deloitte and Touche. 'It's just irrelevant. What matters here is what's produced where, and who earns the income.' He points to the competitive advantage - and the income - London has gained as a global financial centre by 'throwing open the gates' to foreign financial institutions. He understands, however, the powerful popular appeal of the nationalist, anti-globalising message.

'Protection remains a potent threat because, for large numbers of people adversely affected by international competition... it apparently offers an obvious gain - a no-brainer. Shutting out foreigners from "our" markets is obviously good for "us", although it is bad for "them",' he explained in his recent book, Money for Nothing.

'Trade is often viewed by the man in the street as a competition in which there can be only one winner, whose winnings are exactly balanced by the losses of the losers, or as economists would put it... a zero-sum game. But it isn't a zero-sum game. We all win. More than that, how much we can gain from trade depends on what they have to exchange and how much they can pay for what we have to exchange. In other words, we have a stake in their success.'

A recent book by two World Bank economists, Kym Anderson and Will Martin, found that if politicians used the current 'Doha round' of world trade negotiations to throw open their agricultural markets to competition from overseas, world GDP would be boosted by up to $300bn over the next decade.

History has shown that the most successful economies are those that open themselves to foreign competition. Another World Bank report, from 2001, compared the fortunes of open economies - including China and the Asian Tigers - with countries that have protected their home industries from foreign competition - in general, protectionism was a losing bet.

'Comparative advantage' - the compelling idea that everyone benefits if each country specialises in what it can do better, or more cheaply, than others - was developed by the British economist David Ricardo almost two centuries ago. But for a politician under pressure, the desire to find a foreign scapegoat for economic problems at home, and the clamour of those whose livelihood is being competed away, can outweigh any number of hefty economic textbooks.

Think Rick Santorum even knows what Smoot-Hawley was?

Posted by Orrin Judd at March 10, 2006 4:21 PM