By Edward M. Graham and David M. Marchick, Institute for International Economics , May 2006

“. . . 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.” 

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.

Contents

Preface

Executive Summary

Acknowledgments

1. Introduction

2. The Exon-Florio Amendment

3. The Economic Effects of Foreign Investment in the United States

4. National Security Issues Related to Investments from China

5. Politicization of the CFIUS Process

6. Policy Recommendations: Improving the Implementation of Exon-Florio

References

Index

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