By The Hill Staff - 05/10/07 07:59 PM EDT
“A free and open international investment regime is vital for a stable and growing economy, both here at home and throughout the world,” Bush said in the statement released yesterday morning. The move marks the first time since 15 years ago, when Bush’s father was in office, that a sitting U.S. president has offered such a statement, sources from business groups said.
“This update of longstanding U.S. policy is a signal that the United States continues to welcome international companies to ‘in-source’ capital and jobs to the United States,” said Todd Malan, president of the Organization for International Investment (OFII), which had called for a statement. He said international business leaders “have wondered” whether the U.S. was hostile to foreign investment.
The Bush statement acknowledged that the threat of global terrorism had caused the U.S. to focus more intently on how national security is affected by foreign investment, but promised his administration “recognizes that our prosperity and security are founded on our country’s openness.”
The statement said the U.S. “unequivocally supports international investment in this country,” and added that the country is committed to securing fair treatment for U.S. investors abroad. “I urge other nations to join us in supporting an open investment policy and protecting international investment,” Bush said.
This part of the statement reflects a worry U.S. companies have had that the actions taken by Congress to thwart a U.S. investment by Dubai Ports World last year could encourage other countries to impose barriers to U.S. investment.
Bush highlighted his support for free trade policies as administration officials and House Democrats appear to be edging close to a deal on trade that could allow at least some agreements already negotiated by the administration to be considered by Congress. Bush said his administration would work “aggressively” to secure congressional approval of deals with Peru, Panama, Colombia and South Korea.
House Financial Services Committee Chairman Barney Frank (D-Mass.) welcomed Bush’s statement about the importance of foreign investment, but criticized Bush for failing to mention that policies allowing the unfettered free flow of capital have increased economic and social inequalities.
“He leaves out the negative effects of some of these policies on the average American,” Frank said.
The House earlier this year approved a bill reported by Frank’s committee that reforms the Committee on Foreign Investment in the U.S. (CFIUS), an inter-agency body that reviews foreign investments for national security threats. Frank said that bill, which was supported widely by the business community, had the effect of welcoming foreign investment, and predicted the Senate would move on a bill soon.
Bush’s statement came as Treasury Secretary Henry Paulson prepared to give a speech yesterday on the importance of an open U.S. economy. Paulson was set to speak on a panel that also included Frank and New York Times columnist Thomas Friedman. Separately, Department of Commerce Undersecretary Frank Lavin in March announced a new “Invest in America” initiative to court foreign investment in the U.S.
Groups like OFII have been worried that CFIUS reviews have intensified in the wake of the Dubai Ports controversy. They have noted an increase in the number of CFIUS investigations, and an increase in conditions imposed on approved investments.
The Chamber of Commerce, Business Roundtable, Financial Services Forum and OFII criticized CFIUS last year for imposing an “evergreen” condition on its approval of the merger between France’s Alcatel and U.S.-based Lucent Technologies. This could allow the deal to be re-investigated or even undone in the future, the groups said in a letter last year to Paulson that warned such conditions could chill foreign investment in the U.S.