The Unocal decision: Bad for business, irrelevant for homeland security

Remember the firestorm which erupted when it was revealed that a Dubai company was going to own management operations at major U.S. ports? The reverberations of that storm are still being felt, and the Financial Times felt compelled to comment. The FT’s Lex Column offers insightful and useful analysis of important business issues of the day, and the eight writers and analysts who write the five or six short pieces which make up the column every day never confuse being serious with being somber or boring. A couple of days ago, under the heading “Homeland Insecurity,” Lex wrote that Capitol Hill had just chalked up a pyrrhic victory in the decision to keep Unocal in American hands, as part of Chevron. The political storm in Washington which forced CNOOC, the Chinese oil group, to drop its bid will do longer-term damage.

Lex writes that there was never a sensible rationale for trying to block CNOOC’s bid. The Chinese would probably have pledged to sell Unocal’s U.S. assets. The Asian assets that CNOOC wanted represent no security threat to the United States. The argument that Beijing was offering an unfair source of interest-free financing holds some weight