http://www.dfw.com/mld/dfw/business/13983763.htm

ALL BUSINESS: Knee-jerk reaction to ports deal is a riskBRUCE MEYERSONAssociated PressNEW YORK - National security is a legitimate worry, but behind the dispute over whether to let a Middle Eastern company run U.S. ports lurks the nagging discomfort Americans feel whenever the growing pains of free trade and globalization hit home.
Last year, it was a Chinese company's attempt to buy a big U.S. oil company. Before that, there was outrage over U.S. companies "outsourcing" jobs to India and other lower-wage markets. And for the better part of three decades, there's been dismay at just how open our borders are to Japanese cars and other imports.
There was a time when our high-quality, lower-priced products were flooding other markets, generating fortunes in export revenue and a healthy dose of foreign resentment. That often led to tariffs, trade barriers and no shortage of angry protest from Washington
Those days are long gone. Imports of foreign goods exceeded exports of U.S. goods by a record $726 billion in 2005. This imbalance prompts frequent calls by politicians, companies and unions to retaliate against China and other nations who they say view free trade as a one-way street, or to subsidize those segments of the U.S. economy taking the biggest hit from imports.
The head of the United Auto Workers union, Ron Gettelfinger, has urged President Bush and Congress to "recognize that the foreign auto firms who are gaining market share in the United States did not succeed while their countries let `free markets' run their course. Japan, Germany, South Korea and other countries actively intervene to support their industries."
Among the unlikely "interventions" proposed by the UAW president was national health insurance. Such a massive federal program would neatly eliminate one of the most hobbling burdens for Detroit rather than forcing the automakers and UAW to come up with a sustainable business model - including health benefits much less luxuriant than autoworkers currently enjoy.
Other critics say it's naive for the United States to be so open to imports from countries that don't return the favor.
No doubt the general U.S. devotion to free trade has been abused. It may sound fair to respond with punitive tariffs and barriers. But that would be counterproductive and futile if one acknowledges the longer-term, less-emotional reality that market forces tend to be irrepressible, whether it's in China, the United Arab Emirates or the United States.
And despite the earnest desire to buy American, it's hard to find products that don't derive any benefit from globalization - an "impurity" that brings smiles at the cash register and would be sorely missed if the United States turned too tough on trade.
The near-term pain of trade deficits is the price for preaching capitalism to the world.
That's not merely high-minded symbolism. There is material payback for this leadership-by-example.
The flood of outsourced jobs to India, China and eastern Europe is boosting wages in those markets. As pay rises overseas, it becomes less economical for U.S. companies to find a labor bargain. Already, outsourcers are looking beyond India, a process that's likely to ripple through the world economy for decades. And with more disposable income on hand, consumers in developing markets come to demand products not made locally, including American goods.
Meanwhile, with all the dollars going to imports, from cars and appliances to the billions worth of foreign oil per day it takes to power those products, there's still major global demand for one American product that no low-cost producer has managed to replicate: the good name and credit of the United States.
We gripe that the Chinese are not buying our goods. They are. With all those dollars coming in, the Chinese government is one of the biggest customers for a unique American product called U.S. Treasury debt. An estimated three-quarters of China's $800 billion in foreign currency holdings are in dollars, and Treasuries account for most of it.
Likewise, hard U.S. assets remain an appealing place for foreign concerns to park their dollars, though often not without controversy.
In the eighties, Japanese real estate purchases were a hit to American pride. Now national security has emerged as a top objection. Last year, CNOOC Ltd.'s bid for Unocal provoked a political firestorm similar to the current spectacle over the sale of U.S. port operations to Dubai Ports World of the United Arab Emirates.
In the Unocal deal, politicians bristled at ceding control of U.S. energy resources to foreign interests. The opposition prompted Unocal's management and shareholders to accept a lower bid from Chevron Corp. It was a pragmatic decision, but not in keeping with the capitalist spirit this nation touts at home and abroad.
Generally lost in the current debate is the reality that the American ports in question have already been under foreign control for some time. Granted, the current owner is based in Britain, an ally in the fight against terrorism, whereas Dubai Ports World is a company with secretive finances in a region politicians have linked with terrorism.
But the democracy the United States is attempting to "seed" in that part of the world is in no small way dependent on the spread of free markets and capitalism.
So the answer here may be to proceed cautiously, protecting national security, but also ensuring that the United States doesn't send the wrong message with a knee-jerk rejection of the ports deal.

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