WASHINGTON — Congress turned up the pressure on the Bush administration on Thursday to take a more aggressive stance on trade scrutiny and enforcement.
Sen. Charles Schumer (D., N.Y.) questioned U.S. Trade Representative Rob Portman at a Senate hearing about an escalating controversy over the impending acquisition of U.K.-owned Peninsular & Oriental Steamship Navigation Co., which currently oversees seven U.S. ports — New York and New Jersey; Philadelphia; Baltimore; Norfolk, Va.; Miami; New Orleans, and Houston — by Dubai Ports World, a company owned by the government of Dubai, United Arab Emirates.
Also in the Senate, Sen. Max Baucus (D., Mont.) introduced legislation Thursday with two other senators that would give the Office of the USTR more tools, funds and support to tear down trade barriers blocking U.S. exports, strengthen enforcement and help preserve U.S. jobs.
These actions came as Portman laid out an ambitious trade agenda over two days of hearings in the House and Senate at a time of tense partisanship in Congress, punctuated in part by differences in trade policy. Many lawmakers voiced concerns about China’s trade practices and currency policy, as well as the current round of global trade talks and labor provisions in free trade deals the U.S. is negotiating.
During Portman’s testimony before the Senate Finance Committee, Schumer addressed the controversy over the sale of the major U.S. ports to a company owned by the government of Dubai, which he and other senators claimed had ties to the 9/11 hijackers. Schumer asked Portman to explain why an interagency committee, on which USTR sits, failed to conduct a full 45-day investigation into the pending deal.
Schumer said the Committee on Foreign Investment in the United States, “which is charged to investigate these takeovers, somehow very strangely issued, at least according to the company, an approval before the merger actually occurred, which I haven’t known them to do very often in the past. Many of us are concerned with this. Even if the head of the company and even if the government of Dubai is at the moment friendly to the United States, UAE has been a center of terrorism in the world.”
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Portman said he would have to look into the matter. Schumer and six other senators sent a letter Thursday to Treasury Secretary John Snow inquiring about the acquisition, laying out their concerns and requesting a formal investigation by CFIUS.
A Treasury spokeswoman said the interagency committee conducted a “rigorous review” of the proposed acquisition and “did not object to the transaction going forward.”
The senators wrote in their letter that DP World, as a port operator, is responsible for securing cargo coming in and out of the port, the port facility itself and the hiring of security personnel.
Anthony R. Coscia, chairman of the Port Authority of New York & New Jersey, sent a letter to Snow and Homeland Security Secretary Michael Chertoff stating the Port Authority must and will conduct its own thorough review of DP World as part of a due diligence process conducted on all prospective port tenants before it allows the company to take control of one of its terminals.
“In view of the concerns raised by federal, state and local officials over this approval, the Port Authority must ensure that a full and comprehensive review of this matter is complete,” said Coscia in the letter.
He also said New York officials are seeking answers to the nature of the review process conducted by Treasury and Homeland Security before approving the application, whether a background investigation was completed during the review process and whether a specific security review was conducted prior to approval of the company’s application.
A spokesman for the Port Authority, a key entry point for apparel and textiles, said DP World has only bought an interest in 50 percent of one of five terminals. The other four terminals are owned by separate business enterprises. He said DP World would control half of the operation of that terminal, which means loading and unloading ships and moving cargo containers, among other duties.