No surprise, perhaps, that the House and Senate have—without much debate and no opposing voices—come up with well-meaning legislation that will only throw more sand into the gears of global commerce.
The goal is to expand the role of the Committee on Foreign Investment in the United States (CFIUS) and its review procedures for foreign investments in U.S. enterprises deemed to be “controlled” by foreign governments. The impetus for this was the prospect of DP World, a Dubai owned company, operating, indirectly, six major U.S. seaports.
DP World abandoned its plan earlier this year after U.S. authorities expressed concerns over port security.
The present legislative responses smack of doing something just to appear to be doing something, with results that are typically counterproductive and often harmful.
By any objective standard, the DP World deal was good for the U.S., but it was torpedoed by an act of uninformed congressional populism, poor executive-legislative communications and bad public relations. The proposed new congressional initiatives would improve communications by force, imposing new reporting mandates and broader legislative oversight of CFIUS reviews of foreign investment in the U.S.
Bringing members of Congress into the deliberative process so early may head off some of their grandstanding—one hopes—by exposing them as part of the problem rather than the solution. If that makes it easier to sell America's obvious economic interdependence to a restive public, so much the better.
But these bills—especially the Senate version, which threatens indefinite delays and brings governors, business rivals and everyone but the American Idol crew into the process—have endless potential for mischief. Serious, time-limited, tightly focused analyses aimed at flushing out major national security issues have an important purpose, but unlimited delays for cross-border deals mean trouble.
Legislation like this belies our belief that the free flow of goods, services and ideas around the globe is desirable. Economic openness is not only compatible with safeguarding national security, but indeed a fundamental component.
The “Dubai problem” can be fixed in a way that upholds mutual economic interests; such deals don’t need to be blocked whenever someone in Nebraska gets the vapors. The proposed CFIUS legislation risks hindering, not furthering, our economic and national security. If Congress doesn’t get that, it may take a decisive exercise of presidential leadership to set them straight.