US National Security and Foreign Direct Investment

US National Security and Foreign Direct Investment

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by Edward M. Graham, David M. Marchick
     
 

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Although a vital part of the US economy, foreign direct investment (FDI) in the United States periodically raises public and congressional alarms-as witnessed during Dubai Ports World's recent bid to acquire US port operations and Chinese firm CNOOC's attempt to buy US energy firm Unocal. Drawing fire from Congress are the Exon-Florio provisions of US law, which… See more details below

Overview

Although a vital part of the US economy, foreign direct investment (FDI) in the United States periodically raises public and congressional alarms-as witnessed during Dubai Ports World's recent bid to acquire US port operations and Chinese firm CNOOC's attempt to buy US energy firm Unocal. Drawing fire from Congress are the Exon-Florio provisions of US law, which enable the president to block a foreign acquisition that threatens national security. This important new book finds that many proposed reforms risk harming the US economy without enhancing national security. The authors propose ways to strengthen the current interagency review of deals, including an improved process for reporting to Congress.

Editorial Reviews

Foreign Affairs
Two prospective foreign acquisitions of U.S.-based businesseshave recently caused enormous political controversy — implying a greatly enlarged concept of U.S. national security. An economist and a lawyer have teamed up to offer a history and a dispassionate evaluation of government review of foreign investment in the United States, with some reference to the policies of other countries. They present detailed discussions of the offer by a Chinese oil company, CNOOC, to purchase Unocal, an American energy firm with significant reserves in Southeast Asia, and the offer by Dubai Ports World to purchase P&O, a British-based global firm that operates six ports in the United States — and the political outcry occasioned by each of these offers, neither of which was consummated. They also give suggestions for improving, and making more transparent, the existing review process for inward-bound foreign direct investment that could affect national security, which has been in place since 1975. In the end, however, the authors reject a number of more radical proposed changes on the grounds that they would not likely improve national security and could impede foreign investment in the United States.

Product Details

ISBN-13:
9780881323917
Publisher:
Peterson Institute for International Economics
Publication date:
05/17/2006
Edition description:
New Edition
Pages:
190
Product dimensions:
6.00(w) x 9.00(h) x 0.50(d)

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What People are saying about this

Brent Scowcroft
. . . a very important and comprehensive assessment of a critical issue in a post-September 11 world. Protecting national security and maintaining an open investment regime are twin imperatives for the United States.
Lawrence Summers
. . . an insightful analysis of the complex and often emotional issues of foreign ownership of US assets and the national security issues associated with foreign ownership.

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