United States Sen. Chuck Grassley (R-Iowa) and Sen. Debbie Stabenow (D-Mich.) are supposed to introduce legislation today that will add food security to a process used by the federal government to review foreign acquisition of U.S. companies.
Had this variable been in effect in 2013, the Chinese acquisition of the Virginia-headquartered Smithfield Foods Inc – the largest producer of pork and pork products in the world – may have turned out differently. You can read some of my earlier Smithfield posts here (2016), here (2015), and here (2013).
According to Reuters, the bipartisan legislation “would add the secretaries of the Agriculture Department and Health and Human Services, which oversees the Food and Drug Administration, to a panel that reviews mergers and other deals to ensure that transactions do not harm national security.”
The Obama administration tried many times to downplay the potential problems of the Smithfield acquisition by the Chinese. In fact every now and then the Voice of America, a U.S. government entity, would run stories about how great things were going and the ‘little changes‘ that have, in their view amounted to nothing to be concerned about. I guess being the world’s worse abuser of human rights and labor rights, as well as being the world’s top economic scofflaw, are concerns that do not rank as important issues these days.
My beef with the China Smithfield acquisition had little to do with food safety, although that is a significant consideration, but rather the location and the access it affords Chinese nationals on U.S. territory. Smithfield’s global corporate headquarters, located in the heart of Virginia’s Tidewater region, is the home of the world’s largest military naval facility as well as other strategic U.S. military and other assets.
Presidential advisor Peter Navarro has said that Communist China, rightly so, is parasitic. Indeed. When it comes to commercial relations and trade, China is a cheat and it has been taking advantage of U.S. generosity for a long time. Access to the U.S. market is privilege, not a right. Albeit a small part of the China puzzle, the CFIUS reform legislation will put food security in the CFIUS-review basket once and for all. If reciprocity review is included, even better.
More is needed, of course, but updating the CFIUS review process is a good first step that will help advance U.S. security and protect against foreign meddling from powers such as Communist China.
UPDATE: S. 616, a bill to amend section 721 of the Defense Production Act of 1950, was introduced yesterday. I’ll embed it here as soon as it is available.