Proposals to Require Disclosure on Foreign Investment Are Ill-Advised
My good friend, Jock O’Connell, once again has waded into the quagmire of misinformation surrounding foreign direct investment (FDI) in the United States with his characteristic wit. His Viewpoints column, however, fails to define the real issues (“The Specter of Foreign Investment,” July 9).
Although I agree that FDI “is neither an unmitigated boon nor a clear and present danger,” and that FDI’s impact should be carefully reviewed by U.S. policy-makers, I am deeply troubled by federal and state bills being introduced under that guise. Both bills posit a need to gather further data regarding FDI in order to assess its impact and to determine what measures, if any, should be taken. Fair enough, one could say; but both bills require foreign investors to disclose far more private information than “American” companies are required to disclose, and they justifiably are perceived as a “foreign investors not welcome” message. If either of these bills is enacted, FDI will likely diminish before we can determine whether it is the proverbial boon or bane. Given the clear and positive role played by FDI in terms of our nation’s liquidity, I don’t view that to be a very smart move.
The American government has compiled extensive FDI data for years. The proponents of disclosure legislation argue that these data are inadequate, but nowhere have I seen any governmental efforts to use the data we already have. If Congress and the California Legislature are sincerely interested in enhancing our understanding of this issue, why not undertake a study with what we have in hand?
Although I agree that FDI is not invariably beneficial, O’Connell’s assertions regarding FDI’s impact on job creation, tax revenues and the trade deficit are suspect at best. The scenarios he advances are speculative and certainly are not confined to FDI. Domestic acquisitions pose the very same questions.
We should understand the price we pay--if any--when ownership of our assets passes to persons who are subject to the legal and political vagaries of other jurisdictions. It is equally important, however, that in pursing that knowledge we not become infected with classic American xenophobia.
JOHN R. LIEBMAN
The writer is a member of the California State World Trade Commission.