Top U.S. Official Pledges Support for Overseas Investment
Washington, D.C. March 12, 2010 - As it emerges from a deep recession, the United States must reject protectionism and economic nationalism, and champion foreign investment as a key driver of U.S. prosperity, according to a top State Department official.
Addressing a conference on cross-border investment on Wednesday organized by the United States Council for International Business (USCIB), Robert Hormats, under secretary of state for economic, energy and agricultural affairs, said both inward and outbound FDI contribute to U.S. growth, employment and competitiveness.
“We need to maintain a positive environment for international investment,” stated Mr. Hormats. “The U.S., along with other governments, needs to resist protectionism and economic nationalism. We also need to recognize that FDI contributes enormously to our economic success. And we need to pursue policies that will increase confidence of foreign investors. This is the key to extending our economic recovery and global economic growth.”
With many speakers at the conference calling for a forceful statement from the Obama administration on the contributions of open investment policies to the American economy, Mr. Hormats said the U.S. will seek to craft policies to support investment both in this country by foreign firms and overseas by U.S. multinationals.
“We know that some overseas investments by American companies can lead to job losses in the United States. But for many companies, expansion abroad tends to support employment and dynamic opportunities here at home. For many, foreign affiliate activity has tended to complement, not substitute for, key parent activity in this country, boosting wages, employment and capital investment.”
Later this month, USCIB and the Business Roundtable plan to unveil updated research by Dartmouth Professor Matthew Slaughter that further demonstrates the sizeable domestic returns of overseas investment by U.S. companies, in terms of jobs, exports and R&D. The two groups published research by Professor Slaughter last year that was directly referenced by Mr. Hormats in his remarks.
At the USCIB conference, a diverse array of speakers from business, government, international organizations, labor and NGOs addressed key challenges for foreign investment in the United States and other major markets. Most agreed that the terms of public debate over cross-border investment had changed in the wake of the economic crisis, with wariness in many countries over certain aspects of inward FDI largely giving way to skepticism of the value of outbound investment for home countries.
“Jobs and exports are the main issues on the minds of policy makers,” said Jeffrey Shafer, vice chairman of Citigroup, summing up the conference’s lessons. “We need to get the facts out about how open investment policies benefit ordinary people, while keeping the pressure on governments to resist protectionist impulses.”
Most speakers agreed that bilateral investment treaties are essential to provide foreign investors with safeguards against political risk, while multilateral deliberations of investment policy can provide an important safety valve to avoid a potential protectionist backlash again investment.
“The worst-case scenarios have not been realized - yet,” according to Angel Gurría, secretary general of the Organization for Economic Cooperation and Development, commenting on policies in the G20 countries since the onset of the global recession. He said the OECD, which coordinates economic policies among the most advanced industrial economies and key emerging markets, planned to undertake a review of bilateral investment treaties worldwide with a view toward developing best practices, or even a model treaty.
Conference panels examined challenges to foreign investors in global markets, investing in green technologies, foreign investment and jobs, and addressing societal problems. Speakers included David Rubenstein, managing director of The Carlyle Group, Jim Quigley, CEO of Deloitte Touche Tohmatsu, Deputy U.S. Trade Representative Miriam Sapiro, Professor Ted Moran of Georgetown University, Thea Lee, deputy chief of staff at the AFL-CIO, and Margrete Strand, director of the Sierra Club’s labor, worker rights and trade program. Executives from Chevron, Fedex, Goldman Sachs, Wal-Mart, Google and Cadbury were also on the program.
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and prudent regulation. Its members include top U.S.-based global companies and professional services firms from every sector of the economy, and with operations in every region of the world. With a unique global network encompassing leading international business organizations, including BIAC, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment.
More information is available at www.uscib.org.
The American Chamber of Commerce in India (AmCham India) is an association of American business organisations in India, with over 300 members. AmCham India is accredited to the Chamber of Commerce of USA®, and is also a member of the Asia Pacific Council of American Chambers (APCAC).