SUBCOMMITTEE QUESTIONS WITNESSES ON PROPOSED REFORMS TO THE COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES (CFIUS)

Washington, Jul 11, 2006 - "The Commerce, Trade & Consumer Protection Subcommittee today considered H.R. 5337, the Reform of National Security Reviews of Foreign Direct Investment Act, which would reform the Committee on Foreign Investment in the United States (CFIUS).  "Foreign direct investment in the U.S. economy reached over $115 billion in 2004, yielding over 5 million jobs reaching into every state of the union," stated the Subcommittee Chairman, Rep. Cliff Stearns (R-FL).  "Preserving a balanced and transparent CFIUS process is vital to enjoying the open cooperation from companies wishing to invest in the U.S. economy.  I do, however, believe that the balance that has been struck under the current CFIUS process is capable of being fine tuned."

John J. Castellani, President of the Business Roundtable, spoke in favor of H.R. 5337; "It keeps national security as the principal focus of the foreign investment review process without putting a damper on foreign investment that is critical to U.S. economic growth and job creation."

Calman J. Cohen, President of the Emergency Committee for American Trade, identified two objectives that should be addressed in any CFIUS reform, "The first is the need to ensure that limited CFIUS resources are directed at potential transactions that raise national security issues.  The second is to consider potential changes to the U.S. national security review process in light of how such an altered process would impact U.S. investors abroad if similar changes were adopted by foreign governments."

Douglas Holtz-Eakin, with the Council on Foreign Relations, gave his personal views on CFIUS reform and pointed out an area of concern.  He stated, "Over time, administration of both political parties have helped to establish a global rules-based system for open investment and free trade.  This approach has supported U.S. economic success.  This success is put at risk if new procedures are unclear, viewed as overly politicized or unnecessarily discriminate against foreign investment."

Concluded Stearns, "As a cosponsor of H.R. 5337, I support the bill's general approach to facilitate better congressional oversight of the CFIUS process while preserving a balance and transparent review process that avoids politicizing these important issues." The full Energy & Commerce Committee will take up H.R. 5337 on Wednesday, July 12, 2006.