US Treasury Dept outlines open investment campaign to ward off protectionism
AFX | 02.15.08
Treasury’s McCormick outlines open investment campaign to ward off protectionism
WASHINGTON (Thomson Financial) — Developing a policy response to the concerns surrounding sovereign wealth funds, addressing the national security aspect of foreign investment, and negotiating bilateral investment treaties (BITs) are ’at the forefront of an open investment campaign that must be waged to hold the forces of protectionism at bay,’ a Treasury Department official said today.
Treasury Under Secretary for International Affairs David McCormick in a speech at the Tuck Global Capital Markets Conference said the Treasury Department is making efforts to better understand sovereign wealth funds, monitor their transactions to ensure transparency and initiate dialogue with other countries.
’National security is paramount, and we take this responsibility very seriously,’ McCormick said. ’At the same time, national security must not be used as an excuse for pursuit of protectionist policies, industrial policy, or the creation of national champions,’ he added.
Treasury is working within the Committee on Foreign Investment in the US (CFIUS) to review investments that may raise national security concerns.
McCormick also discussed US bilateral investment treaties (BITs), ’a perhaps less high profile — but extraordinarily important — way in which we can reinforce an open investment climate.’
According to McCormick, ’These treaties support investment liberalization by ensuring a minimum and predictable level of fair and equitable treatment based on customary international law, including protection against denial of justice by courts or administrative tribunals.’
They would also prohibit costly performance requirements, protect the right to remit investment returns, and permit expropriation according to law.
McCormick said exploratory discussions are underway with China, Russia and India, in which the US already invests at a rate two and a half times that of other countries.
