The Financial Times

Boost investment in US, senator urges

The US needs to do more to recruit and provide incentives for global companies to set up operations within its borders, according to Senator Richard Lugar, who chairs the foreign relations committee.

Mr Lugar introduced legislation late last week that would create a new office within the Commerce Department that would be responsible for attracting new investment in the US.

The office, to be called the United States Direct Investment Administration, would comprise secretaries of the Commerce, Treasury, Agriculture and the US trade representative, among others, and would co-ordinate efforts to attract investment in the US.

The introduction of Mr Lugar’s bill comes as lawmakers continue to negotiate legislation behind closed doors that would make national security reviews of foreign acquisitions of US assets more onerous. Critics of a bill that was unanimously passed by the Senate banking committee, and a separate bill that is being discussed in the House, have said that attempts to change the current vetting procedure, which is controlled by an inter-agency committee, or Cfius, would chill foreign investment and risked setting up new barriers for American companies seeking to enter markets abroad.

One business lobbyist on Friday said it was unclear whether proposals to reform Cfius would ultimately become law this year. Lawmakers were eager to revamp the process following an intense backlash against Dubai Ports World’s takeover of five US port terminals – a deal approved by Cfius but that many leaders in Congress said threatened national security.

But the that enveloped Congress in the early weeks after the DPW controversy has subsided in recent weeks following an intense lobbying campaign by foreign and domestic business groups in Washington, who warned that efforts to enhance the national security review process would have unintended consequences, such as scuppering US merger and acquisition activity.

Although it is unclear whether Mr Lugar’s bill would ultimately garner enough support to become law in the Senate or, at a later stage, in the House, it is a sign of how the debate in Washington has gradually shifted.

The Commerce office that would be created by Mr Lugar’s proposal, which is being co-sponsored by Senator Jeff Bingaman, would collect and analyse data related to the flow of foreign investment, and would assume responsibility as the “lead agency” for advocating and implementing strategic policies to encourage more foreign investment.

Mr Bingaman said: “Many countries have committed significant resources and energy to recruiting jobs.

“In many cases, they have offices in the US where they meet with US companies to encourage them to consider their country for their next expansion. Right now our country does not have any comparable operation.”