When Chinese National Offshore Oil Corporation, Ltd. (CNOOC) attempted to buy American-owned Unocal Corporation, it unleashed a "perfect storm" in Washington. Members of Congress immediately called upon President Bush to invoke his Exon-Florio authority to prevent the transaction. After the president claimed action would be premature, Congress quickly coalesced to block the deal. The Chinese expressed surprise at the political backlash and ultimately CNOOC was forced to withdraw its bid.
The purpose of this study is to explain the fervor that arose over CNOOC's proposed acquisition of Unocal. The study builds upon the theoretical approach of new institutionalism which emerged in response to the shortcomings of theories that diminished the importance of political values and collective choice in foreign policy making. Since institutionalism emphasizes the significance of history and assumes the infusion of societal values over time, the study applies historical research methodology to the case study. Sources of data include the U.S. Constitution, statutes, judicial opinions, congressional hearings and reports, White House papers, administrative rules, and published biographies. Secondary sources include the media, journals, and think-tank publications.
The study examines how the president and Congress rely upon formal rules for making policy, and how these rules reinforce the status quo and create obstacles for change. Over the years, the president has acquired greater foreign policy making authority which has upset the balance of power between the two decision-making bodies. Since policy making is incremental, members of Congress have needed to be resourceful in devising informal mechanisms for change. One such mechanism is politicization of an event to raise public awareness, elevate an issue to the top of the policy agenda, and build coalitions essential to passing legislation.
The research finds that competition between the president and Congress over foreign and national security policy authority is played out in Washington and is reflected in policy outcomes. In the Unocal acquisition case, politicization allowed members of Congress to advance their agenda to tighten up the president's process for reviewing foreign acquisitions and to give Congress greater oversight authority.
This study is important and timely because China has become a major player in the global economy and is driving the global search for new and reliable sources of energy. As China extends its reach, competition with the U.S. and other major energy importers will increase. Although competition is considered essential for a healthy capitalist economy, other factors influence whether competition will have a positive or negative impact on competitors. One of these factors is the perception of how China's emergence in the global economy will affect U.S. national security. The future of U.S.-China relations will depend upon the ability of our political institutions to achieve balance and compromise in energy, foreign trade, and national security policies.