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A bipartisan group of lawmakers on Thursday are calling for action to boost the U.S. share of global foreign investment, which has fallen 50 percent over the past decade as companies pour money into faster-growing economies.
"We think it's critical to evaluate what we need to do and how we can actually attract more capital here" because of the role foreign companies can play in creating U.S. jobs, Senator John Kerry, a Massachusetts Democrat, told Reuters.
Kerry said he was teaming up with Senator Bob Corker, a Tennessee Republican, to introduce legislation requiring the Commerce Department to assess what policy changes are needed to encourage more companies to invest in the United States.
"We want to ensure there aren't barriers out there that are preventing more foreign investment from taking place here. ... grow. It's as simple as that," Kerry said.
U.S. subsidiaries of foreign companies already employ an estimated 5.3 million workers, or roughly 5 percent of total private sector employment. Roughly 2 million of the jobs are in the manufacturing sector, and the subsidiaries also account for about 21 percent of U.S. exports.
But even though foreign direct investment in the United States dipped 4 percent in 2011, the United States is still the biggest draw for global investors. The $227.9 billion invested last year was more than double what second-ranked China saw, according to the Organization for International Investment, a U.S. industry group that advocates open investment policies.
"Yet, the U.S. share of total world stock in foreign direct investment dropped to 18 percent in 2010, down significantly from 37 percent a decade earlier as worldwide competition for foreign investment dollars has increased and multinational companies have expanded investment in developing countries" like China, Brazil and India, the group said in a recent report.
Representatives Robert Dold and Peter Roskam, both Illinois Republicans, are working with Representatives Gary Peters and John Barrow, Democrats from Michigan and Georgia, on a companion bill in the House of Representatives.
"We are not necessarily the most business-friendly environment in the United States," in part because of a high corporate tax rate, Dold said. "What this legislation does is respond to the challenge of other countries so hopefully we can get better at attracting foreign investment."
He argued a concerted push could be part of broader solution to tackle the United States' economic woes.
"At the end of the day, we want to talk about growing the number of taxpayers. That means getting people off the unemployment line into good high-paying jobs," Dold said.
President Barack Obama's Council on Jobs and Competitiveness has already recommended a National Investment Initiative to capture $1 trillion in new foreign investment over the next four to five years. That's akin to Obama's National Export Initiative, which hopes to double U.S. exports in five years.
Lawmakers said they wanted to send the message that the United States is open to investment from around the world, although Kerry acknowledged "there have been some controversies" in the past over proposed Chinese investments.
Kerry said he has told the Chinese, "'You guys have got to open up your market, you've got to give us a fair playing field.' I think the more they can do to build trust, the more there will be investment opportunities available here."