International Investment

America benefits tremendously from international investment, including investments by foreign firms in the United States and investments abroad by U.S. companies.  Dynamic economic growth, more and better-paying jobs, and increased returns for shareholders are just some of the fruits of America's longstanding "open door" policy on international investment.  

Consider the facts on foreign companies investing in the United States:

• Foreign companies have invested over $1.6 trillion in the United States, with more than 90 percent of these investments coming from Europe, Japan, Canada and Australia. 
• Foreign companies employ more than five million Americans in the United States.
• Americans working for foreign companies in the United States earned total compensation in excess of $325 billion in 2005.

By the same token, the United States also benefits when U.S. companies are free to make investments abroad:

• U.S.-owned foreign assets total about $9 trillion, including direct investments abroad by U.S. companies totaling $2.1 trillion. 
• The primary focus of U.S. multinational corporations is the U.S. market.  U.S. parent companies account for about three-fourths of multinational firms' total gross product, capital expenditures, and employment. 

Today, Congress is considering proposals to amend the procedures of the Committee on Foreign Investment in the United States (CFIUS), an inter-agency committee of the U.S. government.  CFIUS administers U.S. investment policy through reviews that protect national security while maintaining the credibility of our open investment policy.  

The U.S. Chamber has no higher priority than national security, and it is entirely appropriate for foreign investment in the United States that affects national security to be subject to special review by appropriate government agencies.  However, it is critical that the strengths of the current process and other national security priorities not be undermined through hasty and ill-conceived reform efforts. 

In this context, the U.S. Chamber endorses the following principles to guide any reform of the CFIUS process:

• During a national security review of any proposed foreign investment in the United States, the integrity of the process must be sustained.  Congress should not intervene in any case while it is under national security review.  The review process must also protect the full use of classified information, proprietary information, and other confidential information.
• The national security investment review process must be objective, fact-based and analytically rigorous.  Such attributes are critical to ensure that national security interests are fully and properly protected.  Altering the objectivity of the process will only encourage other countries to impose unjustified barriers to U.S. investments abroad.
• National security is a sufficiently broad and flexible term to allow the administration to examine all relevant transactions.  Extending the review process to a broader set of so-called economic security issues could have harmful effects on U.S. investment abroad if other countries seek to adopt similar provisions and deny U.S. companies access to key sectors.  At the same time, and recognizing that national security is complex and changing by its nature, the review process must operate on a case-by-case basis and retain flexibility.
• The national security investment review process must be conducted in a timely manner because, quite simply, time is money.  Most foreign investments in the United States do not implicate in any way U.S. national security interests.  Consequently, it is strongly in the U.S. interest to continue to maintain a timely, time-limited process where decisions can be made and that further review is available if warranted.
• This review process must not become a substitute for other existing tools to protect U.S. national security.  For example, the Coast Guard and other units of the Department of Homeland Security run security at our nation's ports. Improvements can always be made to port security, but focusing primarily on the nationality of the ownership of the companies running port terminals or other critical infrastructure is not likely to result in any measurable improvement in port security.

The bottom line is that our "open door" policy on investment brings tremendous benefits to U.S. workers, businesses, and the economy writ large.  At all costs, Congress must avoid closing the door on these benefits.