Regulating & Promoting FDI in the USA

1. Regulating & Promoting FDI in the USA Katie Praske ITRN 603 U.S. Legislation, Extraterritoriality & Global Competitiveness April 17, 2013

2. Executive Summary Foreign direct investment (FDI) is of vital importance to the US economy. The US remains the world’s largest receiver of FDI, but faces competition for investments with developed and developing nations. The governments of those nations are promoting investment in their countries, as state governments and the federal government are promoting investment in the USA. SelectUSA was established in 2011 “as a government-wide initiative to encourage and facilitate business investment in the United States.” In order to grow FDI, it is critical that the US regulations impacting FDI are aligned with the goals of initiatives such as SelectUSA. Regulations put in place with the best of intentions, to protect national security or generate tax revenue, can serve to prevent or discourage the investment the country is working so hard to promote. These regulations must be reviewed with consideration for their impact on market access.

3. Why FDI Matters to the USA • $174.7 billion: Amount of FDI in the U.S. in 2012 • 5.3 million: Workers employed by U.S. affiliates of foreign firms in the U.S. • $55 billion: Amount U.S. affiliates of foreign firms reinvested into the U.S. economy • 36%: U.S. affiliates of foreign firms pay on average 36% higher than the economy-wide average • 18%: U.S. affiliates of foreign firms generate 18% of all U.S. exports • $26.6billion: U.S. affiliates of foreign firms pay $26.6 billion in federal corporate income tax

4. SelectUSA • Established by an Executive Order (13577) issued June 15, 2011. http://www.whitehouse.gov/the-press-office/2011/06/15/executive-order-selectusa-initiative • SelectUSA is designed to complement the activities of our states—the primary drivers of economic development in the United States. • Select USA Services: Business Solutions for Investors, Ombudsman, Advocacy, Single Location Promotion, Facilitated Investment Mission and Economic Development Organization Counseling. • Ambassador Locke, “I want to make it very clear that America welcomes Chinese investment.” http://beijing.usembassy-china.org.cn/20120924-amb-locke-chengdu.html Other Initiatives • Make it in America Challenge – DOC and DOL award funds to communities to prepare them for investment.

5. Issues • National security concerns • Fear of job loss due to mergers & acquisitions • Corporate taxes • Visas • Infrastructure • Labor

7. Sources • http://www.stlrcga.org/Documents/library/Aaron_Brickman_presentation_3.10.10.pdf • http://www.investmentpolicycentral.com/content/barriers • http://selectusa.commerce.gov/investment-incentives • http://ofii.org/ • http://www.vcc.columbia.edu/

8. Sources (cont.) • http://www.vcc.columbia.edu/pubs/documents/FaganFinalEnglish_001.pdf • http://en.wikipedia.org/wiki/Invest_in_America • http://www.oecd.org/unitedstates/34383483.pdf • http://www.investmentpolicycentral.com/sites/investmentpolicycentral.drupalgardens.com/files/Importance%20of%20TPP%20Provisions%20Disciplining%20Performance%20Requirements.pdf • http://www.fas.org/sgp/crs/misc/RS21857.pdf • http://ehis.ebscohost.com.mutex.gmu.edu/ehost/pdfviewer/pdfviewer?vid=3&sid=88dd50be-8cbd-40dd-b073-15c30f09226e%40sessionmgr110&hid=116 • http://www.commerce.gov/news/acting-secretary-speeches/2012/09/28/remarks-council-foreign-relations-dialogue-increasing-us-i • http://beijing.usembassy-china.org.cn/20120924-amb-locke-chengdu.html • http://www.whitehouse.gov/the-press-office/2011/06/15/executive-order-selectusa-initiative