Tuesday, March 07, 2006

What hypocrisy?

UAE Forbids Americans From Controlling Companies
Some advocates of the deal that would allow a company controlled by the government of the United Arab Emirates to manage port operations in the United States argue that opponents of the deal are protectionists who want to restrict free trade. Leave aside the question of whether a government-owned company can ever engage in "free trade."

U.S. citizens are prohibited by law from controlling businesses in the UAE.

MiddleEastLaw.com advises: "Foreign investors are permitted to hold an equity ownership in U.A.E. companies as long as 51% of the equity is held at all times by U.A.E. nationals."

Not that there is a double standard or anything. I'm all for free trade and open markets but it seems as if many times our country engages in an enterprise in the name of free trade while our "partners" take advantage of us.

It is not "free trade" if one country devalues it's currency to keep the price of exports low and the price of imports high. It is not "free trade" to open our markets to foreign investments from countries who do not allow the same for us.

To cling to a notion of free trade while there is an unlevel playing field is not being conservative, it's being stupid.

5 comments:

Anonymous said...

"Foreign investors are permitted to hold an equity ownership in U.A.E. companies as long as 51% of the equity is held at all times by U.A.E. nationals."

Isn't the issue with the UAE and the running of the US ports based mostly on the fact that it's the UAE government that owns the company? Not individuals, but the government.

Idler said...

Off topic, but you must see this, the Illegal Alien Gold Card.

CapitalistPig said...

Most countries in the world have these silly laws limiting foriegn investment in their firms. The only people this hurts is their own citizens. The productivity of any individual worker is directly a function of how much capital has been invested in that worker (capital = computer equipment, machine tools, state of the art electronics, factories, training, etc...) The amount workers get paid is directly a function of their productivity. Therefore, foreigners willing to invest money in your country is an extremely good thing. It makes everyone in your country wealthier. It's especially important for pisant little countries like the UAE, which don't have a whole lot of native capital to invest in their people.

So yeah it isn't fair that foriegners can only own 49% of a UAE company, but the people it hurst are the common workers in the UAE, not us. Restrictions on capital investment in the UAE only encourages capital to move into freer markets such as ours.

The United States which has the freest capital markets is, and has always been the number one location for foriegners to park their money at. Every country in the world competes for capital to flow into their borders, and most of it comes into ours. (Among other things this allows us to have our national debt financed at artificially low interest rates.)

To respond in kind, restricting foriegners from investing in our nation to make it "fair", would only make us all pooerer. Trade does not need to be "fair" to enrich us. In this case we get capital investment in our ports financed courtesy of UAE tax revenues, and we encourage the UAE government to align its interests with our own, without having to send them billions of dollars of financial aide. Sounds like a winning situation for us.

Daniel said...

The gold card! How about "Mexican Express?" Now accepted at more DHS offices than anywhere else.

Scottiebill said...

A great many of the members of Congress are voting against President Bush on the UAE deal. They are saying, in effect, that the UAE is going to OWN the ports. They are only going to MANAGE them, nothing more. We all know, or should know, that the cities those ports are in OWN those ports. But the ports are in reality controlled by the Longshoremen. If someone in management even sneezes in the wrong direction, the longshoremen will walk and keep the ports closed for as long as they want them to stay closed. If the UAE runs into that problem, they would likely wish they had never gotten involved in the first place.

I am no fan of unions, but this hypothetical scenario is very possible.

Also, many of these rino Republicans are going to be up for reelection this coming fall I wonder how many of them will survive the primaries in their states. It will be interesting, to say the least.