Open Economies Policy - Invest in America (below)
On May 10, 2007 the White House issued a new "Open Economies" policy statement and press release as repeated below for reference.
This follows the earlier announcement on March 7, 2007 of a new "Invest in America" initiative at the US Department of Commerce.
Among other things, this will cause the attraction of foreign direct investment projects to become one of the priorities of the US Foreign & Commercial Service (FCS) officials of the International Trade Administration (ITA) and other diplomats serving at US embassies and consulates around the world.
In the past, the FCS officers were tasked primarily with US export promotion and other work related to trade policies, rather than the attraction of foreign investment.
This also establishes the policy framework, authorization, and new direction for Commerce officials based in the USA to collaborate more closely with state and local economic development agencies, government leaders, and business leaders as they compete for foreign investment into their regions.
Under Secretary of International Affairs Franklin (Frank) Lavin at the US Department of Commerce is in charge of this initiative, which is led by Director Aaron Brickman. This policy has also been promoted recently in speeches by Treasury Secretary Hank Paulson and others.
In short, this new Policy Statement establishes the strategic direction by the President for the various government offices involved to work together on the policy implementation details since foreign direct investment is related to many other national interests.
One factor behind this initiative seems to be concern about the potential misperception in other countries about how open the US economy is to foreign investment after highly publicized controversies during the 2006 election cycle about the Dubai ports deal and the interagency review process known as CFIUS - Committee on Foreign Investment in the United States. CFIUS routinely screens foreign direct investments for considerations such as national security risks, particularly when such investments are led or potentially directed by foreign governments.
See also: recent news below about Invest in America
References - and related media coverage and interest groups
Invest in America home page on the US Department of Commerce - International Trade Administration website http://trade.gov A new website www.investamerica.gov has been set up for this initiative.
They have also published a useful list of state contacts for reference by potential foreign investors, such as for executives who may be planning to set up or acquire new business operations anywhere in the USA..
May 10, 2007 White House press release on the Open Economies policy - repeated below - or link to the original press release
May 10, 2007 Open Economies policy statement - repeated below
March 7, 2007 US Department of Commerce press release about the launch of the Invest in America initiative - repeated below
US Department of Treasury - May 10 press release repeated below - or refer to this fact sheet about the Open Economies policy at www.treas.gov or their press room for other recent releases.
The Economic Development Administration at the US Department of Commerce works with many state and local economic development agencies on various types of initiatives to improve their communities.
Other Information Sources
Refer to our unique Search: Americas tools on this website to easily find content from state and local economic development websites in the USA, Canada, or Mexico.
Invest in the USA - our own directories list state and local economic development agencies in all US states, and many related information resources including professional service providers, as part of the global sources and content we openly share through www.gdi-solutions.com for the benefit of business executives and their professional advisors anywhere. We also maintain a directory of various business forums and philanthropic groups with interests related to this niche, as well as links to more than 25,000 other sources worldwide.
USA Search - our tool at www.OnTheShortList.com selectively searches websites of state economic development agencies. There are also several other tools to support research into places to do business worldwide, such as Area Search, Europe Search and Media Search.
fDi Links - is our tool to easily search back issues of fDi - Foreign Direct Investment magazine - published by the Financial Times group, which reaches C-level executives worldwide about the globalization of business, including strategic business location selection issues. This includes global research work such as the North American Cities of the Future awards. An independent panel of experts ranks participating cities of all sizes as potential places to do business according to common site selection criteria reflecting more than 60 facts about their areas. The April 2007 issue of fDI included an article about the CFIUS review process and the expected changes for the USA to try to attract foreign investment.
|The White House - Press Release - May 10, 2007
||White House News - Open Economies Policy Statement
|For Immediate Release
Office of the Press Secretary
May 10, 2007
President Bush's Statement on Open Economies
White House News
The United States has a longstanding commitment to open economies that empower individuals, generate economic opportunity and prosperity for all, and provide the foundation for a free society. Economic freedom, supported by the rule of law, reinforces political freedom by encouraging and supporting the free flow of ideas. To continue the advance of liberty and prosperity, my Administration will work vigorously to promote open investment policies and free trade on a level playing field.
A free and open international investment regime is vital for a stable and growing economy, both here at home and throughout the world. The threat of global terrorism and other national security challenges have caused the United States and other countries to focus more intently on the national security dimensions of foreign investment. While my Administration will continue to take every necessary step to protect national security, my Administration recognizes that our prosperity and security are founded on our country's openness.
As both the world's largest investor and the world's largest recipient of investment, the United States has a key stake in promoting an open investment regime. The United States unequivocally supports international investment in this country and is equally committed to securing fair, equitable, and nondiscriminatory treatment for U.S. investors abroad. Both inbound and outbound investment benefit our country by stimulating growth, creating jobs, enhancing productivity, and fostering competitiveness that allows our companies and their workers to prosper at home and in international markets. My Administration is committed to ensuring that the United States continues to be the most attractive place in the world to invest. I urge other nations to join us in supporting an open investment policy and protecting international investments.
My Administration is also committed to advancing free and fair trade in multilateral, regional, and bilateral negotiations. We will work aggressively to conclude the World Trade Organization's Doha Development Agenda negotiations and to secure congressional approval of the free trade agreements with Colombia, Panama, Peru, and South Korea. The prospects for the Doha Development Agenda negotiations to produce significant new economic opportunities, particularly in developing countries, demand that we do everything possible to reach an outcome that creates new trade flows and strengthens global development.
President Bush's Policy Statement on Open Economies
In advancing open markets, the United States will:
- Reinforce the principle that a domestic climate conducive to foreign investment strengthens national security. Meeting the challenges of a post-9/11 world need not require securing one at the expense of the other. The United States recognizes that growing inflows of foreign investment are necessary to expand levels of employment, innovation, and competitiveness in this country. Only those safeguards that are clearly necessary to protect our national security should be maintained. (Ed. note - emphasis added)
- Actively target unreasonable and discriminatory barriers to investment. The United States encourages a broad acceptance of the national-treatment principle in all countries and places a premium on the protection of U.S. investments abroad. The United States opposes measures that distort international investment flows, including trade-related or other performance requirements, discriminatory treatment of foreign investment, and expropriation without compensation. In turn, when countries promise to protect investment and eliminate such distortions, investors must have the ability to enforce those binding promises in neutral international settings that are free from the political intervention of governments. Further, countries need to be responsive to the needs of investors for access to innovative cross-border financial services. The United States will continue to allow foreign investors open and fair access to investment opportunities under our statutes and regulations and in accordance with international law, and will continue to welcome investment through programs such as the Invest in America initiative.
- Work with our partners in the WTO to strengthen the rules-based trading system so that it continues to promote open markets, trade reform and new opportunities for development and growth. My Administration is committed to completing the Doha Development Round with an agreement that opens markets for goods and services, ensures reform of agriculture and strengthens WTO rules, including in key areas such as trade facilitation. The predictability, certainty, and transparency of the system enhance opportunities for international investment by building investor confidence.
- Promote an international environment in which international investment can make the greatest contribution to the development process. The United States has initiated the Millennium Challenge Account, which assists developing countries that create and maintain sound policy environments, including governing justly, investing in people, and encouraging economic freedoms. Through our bilateral and multilateral economic assistance programs, the United States will continue to explore ways to increase both public and private capital flows and support international investment in the developing world. As countries continue to adopt free market principles and democratic reforms, international investment is necessary to nurture market-oriented development and reduce debt service burdens. Economic freedom is one of the single greatest antidotes to poverty worldwide, and a positive link exists between the liberalization of investment flows and greater international trade.
|Invest in America announcement - US Dept. of Commerce
||Open Economies policy - US Dept. of Treasury
For Immediate Release: March 7, 2007
Contact: Charlie Skuba/Matt Englehart (202) 482-3809
COMMERCE TO LAUNCH NEW FEDERAL INITIATIVE TO ATTRACT FOREIGN INVESTMENT
U.S. Commerce Under Secretary for International Trade Frank Lavin today announced the creation of a new U.S. Government Invest in America initiative, housed in the International Trade Administration, which will promote the United States as a destination for foreign investment. This initiative will be the primary U.S. Government mechanism to manage inward investment promotion.
“The United States welcomes foreign investment and the jobs and prosperity it creates here,” said Lavin. “We are seeing increasing global competition for investment flows and we need to make sure that international investors understand the unique advantages of the United States, including the best workforce in the world.”
Commerce’s Invest in America initiative will highlight the advantages of investing in the United States. Investment from foreign subsidiaries employs more than 5 million American workers. U.S. subsidiaries also spent $29.9 billion on research and development activities in the United States in 2005.
The Invest in America initiative will have three key responsibilities:
||Outreach to the international investment community
||Serve as an ombudsman in Washington, D.C., for the concerns of the international investment community as well as work on policy issues that affect the attractiveness of the United States to foreign investment
||Supporting state and local governments engaged in foreign investment promotion
The initiative will also include the creation of a task force within the International Trade Administration charged with the responsibility of educating and coordinating the efforts of the 2,300 ITA employees in offices around the world on inward foreign investment.
The Commerce Department’s International Trade Administration is responsible for developing U.S. trade policy, identifying and resolving market access issues, administering U.S. trade laws, enhancing the global competitiveness of the U.S. manufacturing and services sectors, and coordinating U.S. trade advocacy efforts on behalf of U.S. business.
For additional information regarding the Invest in America initiative, please visit www.investamerica.gov.
There is a related Wikipedia entry at
May 10, 2007 - US Department of Treasury
An Open Economy is Vital to United States Prosperity
Today, President Bush reaffirmed America's continuing commitment to advancing open economies at home and abroad, including open investment and trade.
"The United States has a longstanding commitment to open economies that empower individuals, generate economic opportunity and prosperity for all, and provide the foundation for a free society. . . . A free and open international investment regime is vital for a stable and growing economy, both here at home and throughout the world."
- President George W. Bush
Focusing on the benefits of open investment, Secretary of the Treasury Henry M. Paulson Jr. will moderate a panel discussion on the gains to the United States economy from foreign investment here.
"Foreign investment in the United States strengthens our economy, improves productivity, creates good jobs, and spurs healthy competition. Americans have prospered as foreign companies have put their money to work here."
- Secretary Henry M. Paulson Jr.
Foreign Direct Investment (FDI) in the United States Creates High-Paying Jobs
Foreign companies in the U.S. employed more than 5 million U.S. workers in 2005, providing 4.5% of all private sector employment in the United States.
Manufacturing jobs accounted for 33% of the jobs created by foreign companies in the U.S. (2004 data). The manufacturing sector accounts for just 12% of overall U.S. private sector employment. Thus, FDI is disproportionately bolstering this important sector.
An additional 4.6 million U.S. jobs indirectly depend on foreign investment in the U.S. (2005 data). Foreign companies in the U.S. buy 80% of their inputs from U.S. companies. This additional business indirectly supports almost as many U.S. jobs as FDI creates directly.
Compensation at foreign companies in the U.S. is on average 30% higher than the U.S. national average. Foreign-owned firms paid U.S. workers an average of $63,428 in 2004.
Foreign Direct Investment in the United States Strengthens Our Economy
Foreign firms in the U.S. account for 5.7% of U.S. economic output, as well as 10% of all investment in plant and equipment in the United States.
Foreign firms in the U.S. re-invested $48.6 billion (45% of their income) back into the U.S. economy in 2004. This investment furthers innovation and promotes economic growth.
Foreign firms generate 19% of U.S. exports ($153.9 billion in 2006). This contribution is greater than their overall percentage of U.S. economic output, which means they are doing more than their share to help improve the U.S. trade balance.
Foreign firms in the U.S. generate a disproportionate share of national R&D spending (13%, totaling $29.9 billion). This spending strengthens U.S. global competitiveness in pharmaceuticals, high-tech, and other key sectors and produces innovative products that help to improve our standard of living.
The economic benefits generated by inflows of foreign capital help strengthen economic leadership. In the late 1980s and early 1990s, some pointed with alarm to Japanese purchases of U.S. assets, fearing they foreshadowed the Japanese overtaking our economic leadership. Twenty years later, the resulting jobs and economic growth show those fears were misplaced.
Maintaining U.S. Competitiveness in Attracting FDI Requires Renewed Commitment
At $1.9 trillion, the total stock of FDI in the United States in 2005 was equivalent to 15% of U.S. GDP. Foreign investment in the U.S. is the ultimate vote of confidence in our economy. It signals a long-term belief in the strength of our markets and the skill of our workforce.
In the last few years, the United States has not received as high a share of total worldwide FDI as it did before 2000. This trend could be due to the growth of opportunities in emerging markets, burdensome U.S. legal, regulatory and corporate tax regimes, or the misperception that the United States is no longer open to foreign direct investments.
However, this trend is cause for some concern. In 2000, foreign firms directly employed 5.7 million people in the U.S. (5.1% of the private sector workforce) and indirectly supported 6.5 million more jobs. In 2005, those figures had fallen to 5.1 million (4.7% of the private sector workforce) and 4.6 million, respectively. Foreign firms' R&D spending as a share of total R&D spending in the U.S. has also slightly declined since 2000.
This trend reinforces the need for the United States to renew its commitment to open investment, and to policies that make the U.S. attractive for FDI.
Our National Security Review Process Has Not Restricted the United States' Openness to Foreign Direct Investment
Since 1988, the interagency Committee on Foreign Investment in the United States (CFIUS) has carefully reviewed the potential national security impact of proposed foreign investments in the United States.
CFIUS's recently more public profile has created the misconception in some quarters that the United States is becoming less open to foreign investment. However, CFIUS is continuing its long history of fairly, efficiently, and narrowly reviewing individual transactions for national security concerns alone, without any protectionist influence on its decisions.
Less than 10% of foreign investments in U.S. companies were reviewed by CFIUS in 2006, and the average since 2000 is about 5%. The vast majority of foreign investment does not raise national security implications – and is untouched by the CFIUS process.
|Recent news - Invest in America week
The following press release was issued by the US Department of Commerce. Link to the original announcement
For Immediate Release: May 5, 2008
Contact: Brittany Eck (202) 482-3809
Department of Commerce Announces Inaugural “Invest in America” Week
Commerce Officials to Highlight the Benefits Foreign Investment
Washington – Commerce Secretary Carlos M. Gutierrez today announced the inaugural Invest in America Week, May 5-9, 2008, featuring events spanning the United States. Invest in America Week will highlight the importance of foreign direct investment (FDI) for U.S. jobs and economic growth through a series of events in 18 states across the country.
More than five million Americans work in jobs created by foreign direct investment, and FDI accounts for 10 percent of U.S. capital investment, 15 percent of annual research and development expenditures, and 20 percent of U.S. exports. On average, U.S. subsidiaries of foreign firms pay 25 percent higher wages than that of U.S. establishments, making these jobs highly sought-after by U.S. workers.
“Invest in America Week highlights our commitment to open investment policies that are key drivers of economic growth. Millions of Americans are employed by foreign companies, with better than average wages. We need to continue attracting investment that promotes economic growth and produces jobs,” Gutierrez said.
Events will take place in Arizona, California, Connecticut, Kansas, Kentucky, Maryland, Massachusetts, Nevada, New Hampshire, New York, Pennsylvania, Rhode Island and Wisconsin.
The Department of Commerce created Invest in America in 2007 as the first federal-level U.S. investment promotion effort in a generation. Invest in America provides support for state governments' investment promotion efforts in all 50 states and is facilitating Invest in America Week activities to showcase the benefits of foreign investment in America.
Historically, the United States is the world’s largest recipient of FDI. Companies invest in the United States because, as the largest economy in the world, it is one of the most important markets for any global company. The United States is the most competitive and open economy in the world, and America’s pool of skilled labor is one of the best educated, most productive and innovative in the world. Foreign investors’ confidence in the U.S. economy has been and will continue to be critical to American economic growth.
In recognition of the importance of FDI for U.S. jobs and economic development, federal, state, and local officials across the country will highlight the benefits foreign investment has brought to American communities and families, as well as the broader benefits of encouraging an open investment climate. For additional information, visit www.investamerica.gov.
|This space left open for updates
|Related Media Coverage
||Related Special Interest Groups
USA Today, May 11. 2007 - Economy's 'Open' for Business
by David J. Lynch, St. Louis
"New rules for world trade"
(quoted from article about the new US "Open Economies" policy)
"Traditionally, the U.S. government did little to solicit foreign investment, instead banking on its inherent appeal as the world's largest market. That approach worked when half the globe was economically isolated because of communist rule in the Eastern Bloc and China or policy choices in places such as India.
In a global economy, where capital can seek out opportunities worldwide, the U.S. needs to be more aggressive. In March, the Commerce Department said it would begin trying actively to attract more foreign investment through its commercial attachés in U.S. embassies abroad and by working with state and local economic development agencies here.
The Commerce Department initiative - dubbed Invest in America - comes as the pool of foreign capital potentially at stake is set to grow. Asian central banks that have been investing their enormous stockpiles of foreign exchange in low-yielding government securities are creating investment funds that will steer some of that cash into investments offering higher returns. Some could wind up in equity investments."
Wall Street Journal, May 10, 2007 - White House Makes Push to Draw Foreign Capital, by Deborah Solomon
The Hill, May 11, 2007 - Bush invites foreign investment, vows balance with national security, by Ian Swanson
Forbes, March 15, 2007 - The World's Buying America, by Brian Wingfield
Forbes, March 10, 2007 - Yet Another Stupid Move by Congress, Notes On The News, by Paul Maidmont - about the risks of protectionist moves by Congress in the wake of the DP World (Dubai ports) deal
Forbes, March 8, 2007 - Who Should Own America? by Matthew Swibel and Brian Wingfield - about efforts in the House of Representatives to expand the role of the CFIUS review process
Kiplinger Business Resource Center, April 16, 2007 - Foreign Firms Welcome Again In the U.S., by Andrew C. Schneider
Fortune, March 5, 2007 - After Dubai Ports, U.S. courts foreign investment, by Nina Easton
Financial Times, February 28, 2007 - Heavy-handed CFIUS
OFII - www.ofii.org This association, the Organization for International Investment, is a Washington DC based lobbying group which represents the interests of more than 150 foreign-owned companies in the USA.
Their website includes links to PR and media coverage for this topic, and promotes the positive impact of foreign investment into the USA..
NAM - www.nam.org The National Association of Manufacturers focuses on representing the interests of US manufacturers, including their interests in US trade policies and the export promotion work of the US Commerce Department through the ITA and FCS officers worldwide. They can therefore be expected to provide a different point of view on the "open economies" policy and trying to attract foreign investment to the USA.
US Chamber of Commerce - www.uschamber.com The international division of the US Chamber is tied to American Chambers of Commerce Abroad (AmChams) as voluntary associations of American companies and individuals doing business in a particular country, as well as firms and individuals of that country who operate in the United States. The Business Civic Leadership Center (BCLC) of the US Chamber supports business involvement in America's communities through a variety of corporate citizenship initiatives, including corporate philanthropy as well as other community investment related to social issues in the places where they choose to do business.
AEA - www.aeanet.org - formerly known as the American Electronics Association, is a technology industry lobbying group which publishes such things as their annual Cyberstates report
BIO - www.bio.org - the Biotechnology Industry Organization is an association of many biotechnology and life sciences companies which regions around the world are competing to attract. Many economic development organizations exhibit at their annual convention as they compete for investment projects. BIO has sponsored recent research such as a Battelle study about regional industry clusters in this market.
fDi magazine (Financial Times group) hosted a May 8, 2007 event during BIO 2007 in Boston to present the latest consultant research about global investment trends in the biotech and life sciences industry.
We also publish a directory which makes it easier to research locations which are trying to compete for investment in the biotech or life sciences sector in order to find the latest information from their perspective.