17 Mar Foreign Investment Survey: Yes, No, Maybe
17.03.06
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There is an interesting Pew Research poll published this week regarding the public’s attitude regarding foreign investment, free trade, and the Dubai ports deal. While discussing the survey results, I want to weave comments from Richard Posner and Gary Becker into the discussion because I find their take to be an intellectual articulation of what appears to be the survey results. They are not addressing the survey, but their comments illuminate the findings.
A full 58% of the public sided with Congress in supporting its strong stance against the deal. “Most Americans (58%) believe Congress acted appropriately in strenuously opposing the deal, while just 24% say lawmakers made too much of the situation.” Clearly the ports deal has been bad for Bush. The public mood about President Bush is also at its lowest in his presidency, with just a 33% overall approval rating, about the same as Democratic and Republican congressional leaders (34% and 32%). This survey suggests that security concerns remain a high priority for most Americans and Bush was outflanked on the right by Congress.
Perhaps most Americans unwittingly concur with Richard Posner’s take on the ports deal: “The defeat of the … transaction was the result of a groundswell of American popular opinion … that is more plausibly interpreted as anti-Muslim and anti-terrorist than as protectionist. Dubai is an Arab nation with pre-9/11 links to al Qaeda, and U.S. port security is notoriously lax. No serious person thinks that Dubai would actually connive in a terrorist attack on the United States. The fear is rather that an Arab company is more easily penetrated by Islamic terrorists than a non-Arab one…. It is not, as some defenders argue, ‘racist’ for Americans to differentiate Islamic nations and peoples from other nations and peoples with regard to security precautions. It is merely realistic.”
On the broader issues of trade and investment, the Pew survey found that Americans clearly are not sour on foreign investment, with only 36% saying foreign investment in the United States is bad for America. Moreover, two-thirds think free trade is good for America. But then when you ask them whether outsourcing is bad for America, a stunning 71% say yes. And ask whether foreign ownership is bad for the country and 53% will say yes.
Posner’s take is that opposition to the ports deal had little to do with “fears of foreign investment in general, since the transaction was between two foreign companies (P&O and DP World). Protectionism is not a compelling explanation for opposition to the sale of assets by one foreign company to another even if some of the assets are located in the United States.” To which Becker responds (more consistent with survey results) that “Posner too readily dismisses the degree of opposition in some American circles to the takeover by foreign companies of certain types of American assets…. American protectionist sentiment arises whenever it can be disguised as concern over national security, terrorism, health, and other legitimate issues.”
So let me see if I can translate. Americans appear somewhat befuddled about their views on trade and investment. But not without reason. They like free trade, but not outsourcing. They like foreign investment, but not foreign ownership. The message is invest in us, but don’t take a controlling share. Give us the benefits of free trade, but don’t take away our jobs. And most of all, do not compromise our national security for the sake of trade and investment. As Becker puts it, the scuttling of the ports deal is a “signal to the world that when conditions are ripe, protectionist sentiment in the US will gain the upper hand.”
A full 58% of the public sided with Congress in supporting its strong stance against the deal. “Most Americans (58%) believe Congress acted appropriately in strenuously opposing the deal, while just 24% say lawmakers made too much of the situation.” Clearly the ports deal has been bad for Bush. The public mood about President Bush is also at its lowest in his presidency, with just a 33% overall approval rating, about the same as Democratic and Republican congressional leaders (34% and 32%). This survey suggests that security concerns remain a high priority for most Americans and Bush was outflanked on the right by Congress.
Perhaps most Americans unwittingly concur with Richard Posner’s take on the ports deal: “The defeat of the … transaction was the result of a groundswell of American popular opinion … that is more plausibly interpreted as anti-Muslim and anti-terrorist than as protectionist. Dubai is an Arab nation with pre-9/11 links to al Qaeda, and U.S. port security is notoriously lax. No serious person thinks that Dubai would actually connive in a terrorist attack on the United States. The fear is rather that an Arab company is more easily penetrated by Islamic terrorists than a non-Arab one…. It is not, as some defenders argue, ‘racist’ for Americans to differentiate Islamic nations and peoples from other nations and peoples with regard to security precautions. It is merely realistic.”
On the broader issues of trade and investment, the Pew survey found that Americans clearly are not sour on foreign investment, with only 36% saying foreign investment in the United States is bad for America. Moreover, two-thirds think free trade is good for America. But then when you ask them whether outsourcing is bad for America, a stunning 71% say yes. And ask whether foreign ownership is bad for the country and 53% will say yes.
Posner’s take is that opposition to the ports deal had little to do with “fears of foreign investment in general, since the transaction was between two foreign companies (P&O and DP World). Protectionism is not a compelling explanation for opposition to the sale of assets by one foreign company to another even if some of the assets are located in the United States.” To which Becker responds (more consistent with survey results) that “Posner too readily dismisses the degree of opposition in some American circles to the takeover by foreign companies of certain types of American assets…. American protectionist sentiment arises whenever it can be disguised as concern over national security, terrorism, health, and other legitimate issues.”
So let me see if I can translate. Americans appear somewhat befuddled about their views on trade and investment. But not without reason. They like free trade, but not outsourcing. They like foreign investment, but not foreign ownership. The message is invest in us, but don’t take a controlling share. Give us the benefits of free trade, but don’t take away our jobs. And most of all, do not compromise our national security for the sake of trade and investment. As Becker puts it, the scuttling of the ports deal is a “signal to the world that when conditions are ripe, protectionist sentiment in the US will gain the upper hand.”
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