Protectionism or Protection?

Disapproval of Foreign Direct Investment (FDI) ventures by the Democrat-controlled Congress is said to be sending a wrong message contrary to America’s efforts to win the hearts and minds of Arab and Moslem allies on global war on terrorism.

Speaking at the Heritage foundation last week, Senator Christopher “Kit” Bond, Vice Chairman, Senate Select Committee on Intelligence said that as global economy grows larger and more interdependent, we are increasingly facing such difficult policy questions about how to handle foreign investments, how to balance the need for economic growth, job growth with our paramount national security interests.”

However, he said “embracing protectionism and isolation as the first step however, will protect us from nothing and will surely isolate us from the economic and security benefits in trading and engaging nations abroad.”

He added that unfortunately Congress is increasing “an isolationist, protectionist and certainly in some cases xenophobic attitude for free trade and foreign investment.”

The forum was aimed at evaluating the National Security Risk of Chinese Investment in the United States specifically, Bains Capital decision to include Chinese technology company Huawei Technologies Company Limited in its acquisition of 3Com.

There have been concerns that acquisition of 3Com, a company that supplies U.S. Department of Defense with technology may raises risks of cyber attacks from China.

It was noted that there is increased concern about this deal following a cyber attack on the Pentagon early this year, purportedly by some entities in China; the surfacing of Chinese submarine off Okinawa a few miles from the aircraft carrier U.S.S Kitty Hawk; and the successive test of an anti-satellite weapon that destroyed a Chinese civilian satellite.

Senator Christopher Bond admitted that “a successive cyber attack on appropriate targets can have an impact on our economy more devastating than 9/11.”

Eight U.S. lawmakers called on President Bush to block the proposed buyout of 3Com Corp (COMS.O), a Massachusetts-based technology group arguing that Huawei technologies’ $2.2-billion transaction “threatens the U.S. national security.”

In this year’s Pentagon Report to Congress on the Military Power of the People’s Republic of China, United States Immigration and Customs enforcement officials rated China as the leading threat to U.S. technology.

Emmanuel Opati is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia.