Does anyone out there believe in globalization?
The dispute over whether a Dubai company should be able to operate U.S. ports is only the tip of the (xenophobic) iceberg.
NEW YORK (FORTUNE) - The dispute over whether Dubai Ports should be able to buy a British company that operates several U.S. ports may be about national security; the rights of Congress; and the quality of decision-making about foreign investment, as the many critics of the deal say it is. But it is sure looking like a xenophobic catfight, too.
Consider the remarks of Senator Barbara Boxer (D-California) who told CBS News, "We have to have American companies running our own ports." The thing is, lots of U.S. ports are run by foreign companies, including many of those in California, including the ones under dispute. If the Boxers in Congress have their way -- and she is not alone -- foreign operators of U.S. ports will be forced to sell up.
Okay, it probably won't go that far. Maybe Congress will stop short, about where Republican Senator Bill Frist wants, and give itself the right to scrutinize all business deals involving foreign companies. Just how long do you think it would take Congress to go from vetting deals for national security to defining national security as, say, making cotton underwear in South Carolina? It was not that long ago that the infinitely elastic security card was played to pressure China-owned CNOOC away from buying Unocal.
Moving on to Europe, there is Jacques Chirac, deciding that Mittal Steel's hostile $22.1 billion bid for Luxembourg-based Arcelor is not in the latter's interest -- a matter that is surely for its shareholders to decide. Mittal, whose roots are in Calcutta and whose management is largely Indian, is a global company based in the Netherlands.
Chirac was not worried when Mittal bought up post-communist rustbuckets in places like Poland and Kazakstan, but Luxembourg is too close for comfort. The bid is "Purely financial in character," sniffed Chirac, "devoid of all industrial intents."
Meanwhile, the EU is set to introduce anti-dumping duties against shoes made in Vietnam. The decision harks back to the "bra wars" of last summer, when the EU enacted special provisions to limit the import of Chinese textiles.
It's easy to suspect racism, and certainly that charge did not take long to surface. But it's wrong and misses the larger point: These incidents are the result of fear -- not of a different skin color, but of the future.
When the U.S. and Europe were creating the post-war global economic architecture, they were the only economic powers that really mattered. It was not always smooth sailing, but there was a degree of comfort and familiarity; they worked things out. Eventually, other countries wanted to get in. Japan was the first, and today's disputes might sound similar to the kinds of ugly grunts that accompanied the emergence of that country in the 70s and 80s.
Now more countries are knocking on the door. That's the ultimate validation of the ideas that led to the West's own post-war boom, and an absolutely good thing. Dubai may be the most dynamic, diversified, open, and entrepreneurial part of the Arab world -- and in large part because of that, the closest thing the West has to a buddy there. Economic openness in China and Vietnam has not only helped to lift hundreds of millions of people out of poverty, but has led to a larger degree of personal freedom than either place has known since their respective Communists took over.
The term "anti-globalization" used to call up images of scruffy college kids, professional activists who considered capitalism a neo-imperialist plot, and cynical autocrats who wanted to protect their highly-feathered nests. But look around the world now, and the most consequential resistance to globalization is coming from those places that have benefited most from it. If you were sitting in Mumbai, you might suspect that the rich world was more comfortable with an India that was importing aid workers than one that is exporting world-class products.