HOW CAN THE U.S. REOPEN FOR BUSINESS TO THE ARAB WORLD?

The following is an edited transcript of the forty-third in a series of Capitol Hill conferences convened by the Middle East Policy Council. The meeting was held on April 7, 2006, at the Center for Strategic and International Studies (CSIS), with Chas. W. Freeman, Jr., presiding.

CHAS. W. FREEMAN, JR., president, Middle East Policy Council

I am just back from the Gulf region, as I believe a couple of others here are. I found it full of British, French, German, Chinese, Singaporean, Japanese and Korean businesspeople. You may notice an absence on that list, as I certainly did. I can report that the fallout from the Dubai Ports World debacle is widespread. For many people in the region who had spent the last several years. as they told me. defending the United States, a country for which they have great affection, this was the last straw. It demonstrated that Arabophobia. a fear of Arabs and Islam, was not simply a regional or elite phenomenon but was deeply rooted throughout our country, and it demonstrated that passionate prejudice would be exploited with shameless demagoguery by our ruling political class. We are at CSIS rather than on the Hill for the first time because members of Congress on whom we normally rely to provide us with a venue were afraid to do so. All of them stated that they wish to be to the right of the president on this issue; in other words, Arab-bashing rather than defending relations with the Arab world. This is a sign of the times.

It's worth noting that on this issue the president was very much on the correct side, defending the integrity of the deal and looking at it strictly in its security dimensions, which were minimal. This was unlike his performance last summer when the Chinese National Offshore Oil Company [CNOOC] attempted to buy Unocal; he was silent and allowed the xenophobia to roll. In the region, therefore, he doesn't get any credit for being on the right side. Rather, he is accused of having pandered to populist prejudice and engaged in fear mongering, which helped to create the atmosphere we now sit in. Here, of course, the only accusation that has been made against the president is that he tailed - or I should say, perhaps, to use his word - "misunderestimated" the ugly ignorance of the public and the shameless irresponsibility of the American political class. So the public and the irresponsible people of the political class escape all blame, but the president, having failed to correctly analyze their ignorance and shamelessness. is blamed. So be it. I will note finally, with regard to the president, that in the region he is rapidly replacing Arab dictators as the butt of the ever-ingenious Arab joke. This is definitely a first for a leader of the United States.

This ugly image comes on top of other difficulties that have been there for a while: inhibitions on financial transfers from the region to the United States that constrain willingness to do business with American companies, as well as to support organizations like the Middle East Policy Council; harassment by lawsuits in the United States; waits for visas and visa procedures that are perceived as onerous in the extreme; fear of humiliation by prejudiced people at border crossings or at airports; and an endless stream of frankly racist commentary in our media. All of these add to the difficulties facing our companies in the region. We have had longstanding problems in bringing customers here to see our showrooms, in arranging training for those who buy our products, or delivering them where delivery is free onboard or in the case of, for example, aircraft, fly-away from the factory. This has now been compounded, I'm sorry to say, by an impression that to do business with the United States is to risk a political mugging by xenophobes. In short, the impression is that the United States doesn't want Arab business or investment anymore.

There are obvious dangers to this kind of impression, given the fact that the United States is by far the largest debtor country in the world. We're giving foreigners the impression that we don't want to take our currency back in payment for goods and services on our side that they want to buy. I don't think this is an overblown description of the situation in this particular region. Unfortunately, it has echoes in other regions as well. In politics, perception is reality, and this is a reality with which we and American business must deal. The point really is not to bemoan it or lament it. We need to understand it correctly. Perhaps I've misstated it. But the issue is, how do we correct the impression? How do we promote our economic and commercial interests with the Arabs? How do we sell our goods and services to them and invite their investments and job creation in the United States under these circumstances? How do we show them that we are open for business, given all that has happened?

This relates to the larger issue of balance between the requirements of national security, which are real, and the requirements of trade promotion, which are equally real. To use the language of the American Constitution's preamble, we are forced to balance concerns about our domestic tranquility with concerns about the general welfare. And arguably, at least in this little corner of the world that we're talking about, our performance so far has been somewhat less than ideal.