By: Shaun Donnelly, USCIB
I was pleased to read earlier this week that Secretary of Commerce Penny Pritzker had appointed 19 leading representatives from the public and private sectors to the new Investment Advisory Council (IAC) which had been established earlier this year to advise the U.S. government on issues related to Foreign Direct Investment (FDI). We at the US Council for International Business certainly welcome this new IAC and the increased focus on FDI issues. FDI is, indeed, critical to American economic growth and jobs.
But, unfortunately, a little bit of digging with Commerce staff after these appointments were made confirmed my fears that the Department and the U.S. Government are still stuck in a bygone era and clapping for FDI with just one hand. The U.S. Government still seems stuck in an outdated mercantilist world view where inward FDI is good and deserves strong U.S. government support while outward FDI by U.S. based firms, the other side of the FDI coin and the other hand that could be clapping, is somehow bad and should be punished. Some in the U.S. Government and on Capitol Hill still seem to think, somehow, that U.S. firms are investing abroad simply to outsource production. Nothing could be further from reality. Studies show American firms invest abroad to tap new markets and grow their companies. Over 95 percent of the production of U.S. investments overseas is sold overseas, generating new revenues and new jobs here at home.