|
|
episode exacerbated the perception among Arab business leaders that there is widespread anti-Arab racism in the United States – particularly in light of the fact that other foreign companies already manage port facilities in America. David Hamod, NUSACC’s President & CEO, noted, “DPW played by the [CFIUS] rules and won fair and square. Now some politicians want to move the goal posts. Inconsistencies like these send exactly the wrong message to foreign investors, and we are concerned that this debacle will have a ‘chilling effect’ on prospective investment in the United States. Capital is a coward, and if investors around the world get the sense that routine business deals here will require forays into domestic American politics, they will turn their backs on the United States.” Media outlets that interviewed NUSACC included CNN, CNBC, Forbes, Financial Times, Christian Science Monitor, Los Angeles Times, Reuters, and many others.
The deal also raised troubling questions about the appropriateness of the United States to serve as the standard-bearer for free trade and direct investment. The U.S. has been encouraging Arab nations to adopt laws that will promote the free flow of goods, services, capital, people, and ideas across national boundaries. This policy is clearly out of sync with the strong protectionist message sent by the U.S. Congress. Ironically, the United Arab Emirates is at the top of the list of Arab nations that are being urged to sign a Free Trade Agreement (FTA) with the United States. » |
||
|
INVESTMENT ADVOCACY Historically, investment plays “second fiddle” to trade when it comes to the U.S.-Arab economic relationship. But in 2006, foreign direct investment (FDI) issues loomed large. DP World’s efforts to invest in the United States captured the attention of the U.S. Congress and media for a solid month. And while Nero fiddled, Rome burned. According to The Wall Street Journal, in 2006, the United States grew more dependent on foreign investors to service America’s debt than at any time in the last 90 years.
Arab investors, for their part, continued two important trends in 2006 that began on September 11, 2001 in the United States. First, more than ever before, they “looked East” to markets in Asia – particularly China and India. Arab investors continue to appreciate the United States, but Asia has clearly captured their attention for the foreseeable future.
|
Second, Arab investors apparently sank unprecedented levels of FDI funds into projects in fellow Arab nations. According to one expert, Mohamed Ali Alabbar, Chairman of Emaar Properties and Director General of the Dubai Department of Economic Development, intra-Arab FDI inflows now account for more According to World Investment Report 2006, produced by the U.N. Conference on Trade and Development (UNCTAD), the number of greenfield FDI projects in the Arab Middle East (“West Asia”) jumped 100 percent from 2002 to 2005, and the results in North Africa were even more impressive (154 percent). DP World Debacle One of the biggest stories of the year in U.S.-Arab commercial relations was the attempted purchase by DP World (Dubai) of P&O (UK). Despite the fact that this was a routine buyout of one foreign company by another foreign company, the deal generated intense emotions in the U.S. Congress and U.S. media because P&O managed six ports in North America. The National U.S.-Arab Chamber of Commerce, which has always been a strong proponent of free trade and foreign direct investment, refused to be part of the “feeding frenzy” gripping Washington. NUSACC expressed concern that “some politicians are grandstanding in an election year and singling out DPW because it is an Arab-owned company . . . . The U.S. needs to be very careful that this situation does not become an exercise in Arab-bashing, with Members of Congress fanning the flames of anti-Arab hysteria.” There is no doubt that the DP World |
||
4 US-Arab Tradeline • 2006: The Year in Review