Foreign investment, jobs, and national security : the CFIUS process : hearing before the Subcommittee on Domestic and International Monetary Policy, Trade, and Technology of the Committee on Financial Services, U.S. House of Representatives, One Hundred Ninth Congress, second session, March 1, 2006.

This report assesses recent international developments as the leaders from a number of nations work to reach a consensus on an informal set of best practices regarding national restrictions on foreign investment for national security purposes. This report also provides one possible approach for assessing the costs and benefits involved in using national policies to direct or to restrict foreign direct investment for national security reasons.

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The United States is the largest foreign direct investor in the world and also the largest recipient of foreign direct investment. This dual role means that globalization, or the spread of economic activity by firms across national borders, has become a prominent feature of the U.S. economy and that through direct investment the U.S. economy has become highly enmeshed with the broader global economy. This also means that the United States has important economic, political, and social interests at stake in the development of international policies regarding direct investment. With some exceptions for national security, the United States has established domestic policies that treat foreign investors no less favorably than U.S. firms. This report assesses recent international developments as the leaders from a number of nations work to reach a consensus on an informal set of best practices regarding national restrictions on foreign investment for national security purposes. This report also provides one possible approach for assessing the costs and benefits involved in using national policies to direct or to restrict foreign direct investment for national security reasons. Within the United States, there is no consensus yet among Members of Congress or between the Congress and the Administration over a working set of parameters that establishes a functional definition of the national economic security implications of foreign direct investment. In part, this issue reflects differing assessments of the economic impact of foreign investment on the U.S. economy and differing political and philosophical convictions among Members and between the Congress and the Administration.

On August 24-25, 2010, the National Defense University held a conference titled “Economic Security: Neglected Dimension of National Security?” to explore the economic element of national power. This special collection of selected papers from the conference represents the view of several keynote speakers and participants in six panel discussions. It explores the complexity surrounding this subject and examines the major elements that, interacting as a system, define the economic component of national security.