The change in ownership at U.S. ports doesn't resolve issues of globalization

S ome Americans are breathing more easily now that Dubai Ports World has sold the last of its U.S. interests to American International Group, the insurance conglomerate. Dubai Ports, of course, is the company whose roots in the United Arab Emirates caused widespread consternation in this country after it acquired a British firm that operated a half-dozen U.S. seaports.

The frenzy about Dubai Ports' control of such key points of entry included numerous overheated speeches in Congress, a spate of Arab-bashing in the media and a torrent of comment in cyberspace and in the pages of newspapers. The backlash caused the company to agree to sell the U.S. portion of its newly acquired holdings.

So now the ports will be in the hands of AIG -- the company founded in Shanghai to sell insurance to the Chinese. The conglomerate with headquarters in New York now operates in more than 130 countries, from Argentina to Zimbabwe, including the United Arab Emirates.

About the time the Dubai Ports World controversy inflamed the pundits, AIG accepted a deal from the Department of Justice, the office of the New York attorney general, the Securities and Exchange Commission and the New York Department of Insurance, which accused the company of various illegal accounting, reporting and brokerage practices, as well underpaying certain workers compensation premium taxes. The deal, which cost the company at least $1.6 billion, doesn't settle the various antitrust accusations still proceeding against the company.

Nor does it resolve the uneasy issues of globalization that so troubled America last winter. The port management business is international, with companies owned by the government of Singapore managing the Port of Oakland and 80 percent of the terminals at the Port of Los Angeles under foreign control. Most ocean cargo is carried on ships of foreign origin.

If America really wants to debate its domestic security vulnerabilities, that would be welcome, because it has many. But it must also be willing to discriminate among governments that are friendly to the United States and those that are hostile. Specifically, it must be willing to decide that the Arab world isn't monolithic. The United Arab Emirates, for example, are moderate and affluent. The "links" to the terrorist attacks of Sept. 11 are made of vapor and since then, the affiliated emirates have been helpful in prosecuting the wars in Afghanistan and Iraq, the White House says.

Amazingly, after everything that's happened here and in the Middle East, the United Arab Emirates still regards themselves as U.S. friends. American military personnel still go on recreational leave in the UAE to the tune of tens of thousands a year. The affiliated emirates still buy Boeing aircraft.

And fortunately, they still let U.S. Navy ships dock at the many ports in Dubai, which are managed by Dubai Ports World.

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