Foreign Investment in U.S. Benefits Economy, Bush Advisers Say
Washington -- Foreign direct investment in the United States benefits the U.S. economy by stimulating growth, generating jobs for U.S. workers, promoting research and development, and financing the current account deficit, say President Bush’s key economic advisers. Recently, foreign direct investment in the United States has stagnated, according to the annual Economic Report of the President released February 12. The share of employment credited to foreign investment declined slightly between 2000 and 2004 and the share of foreign investment in the U.S. capital account has declined since 1999. The current account deficit is the broadest measure of U.S. transactions with the rest of the world. The U.S. capital account is the flow of money both into the United States and from the United States for investment, grants and loans.
(Media-Newswire.com) - Washington -- Foreign direct investment in the United States benefits the U.S. economy by stimulating growth, generating jobs for U.S. workers, promoting research and development, and financing the current account deficit, say President Bush’s key economic advisers.
Recently, foreign direct investment in the United States has stagnated, according to the annual Economic Report of the President released February 12. The share of employment credited to foreign investment declined slightly between 2000 and 2004 and the share of foreign investment in the U.S. capital account has declined since 1999.
The current account deficit is the broadest measure of U.S. transactions with the rest of the world. The U.S. capital account is the flow of money both into the United States and from the United States for investment, grants and loans.
The report did not explain the reason for the decline but said the administration will take every step to ensure that the U.S. economy remains open to foreign investment while making certain such investment does not jeopardize national security.
Foreign investors "must continue to receive fair and equitable treatment," said the report, which is prepared by the president’s Council of Economic Advisers.
"Historically, the United States has opposed the use of government actions that distort, restrict or place unreasonable burdens on foreign investment," the report said.
Another source of productivity growth, job creation and rising average living standards in the United States is U.S. direct investment in multinational companies abroad. This outward form of direct investment is important because it helps provide global market access for U.S. firms, the report said.
Countries with open investment climates are able to attract foreign-owned companies and the efficiencies and expanded services they bring, it said.
Investment from companies and individuals from all over the world goes to every part of the United States and is financing companies engaged in food production, mining and manufacturing and services in the finance, telecommunications, and wholesale and retail trade sectors, it said.
Because foreign investment is not concentrated in any particular area, it "implies a general broad-based confidence in the U.S. economy," according to the report.
"For many U.S. firms, foreign direct investment is a more significant path to access foreign markets than are exports," the economic report said.
The report also said nontariff barriers that result from government polices aimed at protecting domestic companies from international competition might be more trade-restricting than tariffs.
The U.S. Department of Commerce has determined that of 49 countries surveyed, a "problematic regulatory environment" was cited by 43 countries as inhibiting trade and by 14 countries as the leading impediment to trade.
( USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov )
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