Barack Obama vowed to become more personally involved in attracting foreign cash to the US, as he proposed new steps to make America’s federal government more receptive to inward investment.
“Officials at the highest levels, up to and including me, are going to do even more to make the case for investing in America,” the US president told more than 1,200 foreign investors at a two-day conference in Washington on Thursday.
The fresh steps taken by the White House are mainly bureaucratic and have the US catching up to many countries around the world where attracting foreign direct investment is a top goal.
But they mark a big shift for America, which has traditionally not felt the need to advocate for FDI at a federal level, leaving that job to state and local officials. Foreign investment was once taken for granted as the result of the US’s status as the world’s biggest economy but there is growing global competition to attract investors.
“As a country, we don’t always make our case in a co-ordinated way that links our teams overseas to the right senior officials in Washington,” Mr Obama said. “And we’re going to change that, make our advocacy more efficient, more effective, more connected so that businesses who are making decisions about where to invest are getting timely answers and know that they’re going to have all the help that they need.”
The White House has instructed commerce and state department officials to make attracting foreign investment one of their “core priorities”, putting it as high on their agenda as export promotion.
New global teams led by US ambassadors in 32 key countries will be charged with encouraging foreign investment into the US, and a “co-ordinated process” will be set up to connect prospective investors with senior US officials, all the way up to the president in “high priority cases”.
“It’s not a level playing field for a mayor of one of our cities to have to compete against a prime minister or head of state of a major industrial power when we are competing for the location of a new service centre or manufacturing plant,” Gene Sperling, the White House national economic council director, said.
FDI flows have decreased in across advanced economies, but the US has suffered deeper declines than the average of the OECD group of countries that aims to promote sustainable economic growth. FDI inflows to the US were worth about $160bn last year, roughly half of the value at their peak in 2008. Data from 2013 is on track to be still weaker.
Administration officials are not setting a numerical goal for FDI, arguing that their objective is not necessarily to dramatically increase all financial flows into the country but to boost those investments that will create high-paying jobs.
Jack Lew, the US Treasury secretary, made the economic case at the event for inward investment, saying the US had made a strong “turnround” since the recession and financial crisis, recovering faster than other advanced economies. Mr Lew also added that the US welcomed investment from all countries and “from every type of enterprise and in all sectors”. He tried to reassure foreign companies that they would not face discrimination or undue scrutiny from the US government, suggesting that even foreign state-owned enterprises would not face obstacles. However, Mr Lew could not guarantee that Congress would never create political hurdles for international investors.
“We are committed to maintaining the most open and transparent investment environment. Our process for reviewing the national security implications of foreign investment in the US focuses solely on national security considerations and reviews are completed within a period of one to three months,” Mr Lew said, referring to the secretive and at times contentious committee on foreign investment in the US, which is chaired by the Treasury secretary and can lead to deals being blocked to protect national defence.
At the conference, Walmart, the largest US retailer, announced that three of its suppliers in footwear, glassware and curtains had committed to manufacture their products in the US and create 385 new jobs. Penny Pritzker, the US commerce secretary, touted the move as evidence of a US manufacturing renaissance that should draw interest from around the world.
“Think about it: globalisation and technology means you can go just about anywhere. But there are a whole lot of reasons you ought to come here,” Mr Obama said, as he touted the country’s low energy costs, strong intellectual property protections and rule of law, and worker productivity.
But the president also mentioned some of the deterrents to foreign investment, including a recent fiscal stand-off that almost led to a debt default after a two-week partial government shutdown.
“I assume if you ask any CEO here if shutting down the government makes them more confident about wanting to bring jobs to America the answer will probably be no,” Mr Obama said, as he asked Congress to steer clear of more manufactured crises and pass legislation to reform the US corporate tax code and immigration system and boost infrastructure spending. These have all been bogged down by political gridlock, and are widely seen as ways to boost American competitiveness.
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