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1 1 (December 2017)

handle is hein.amenin/aeiaaft0001 and id is 1 raw text is: Key Points * The proposed Foreign Investment Risk Review Modernization Act (FIRRMA) updates and modernizes the procedures of the Committee on Foreign Investment in the United States (CFIUS). * Three aspects of FIRRMA are particularly troubling: The act orders CFIUS to investigate (1) potential dangers from proposed foreign acquisitions across entire industries, sectors, and areas in the US economy, with a view to possibly rejecting any transaction that is likely to reduce the technological and industrial advantage of the United States relative to any country of special concern; (2) whether proposed foreign acquisitions emanate from a country that has a demonstrated or declared strategic goal of acquiring a critical technology; and (3) various commercial transactions that are not related to foreign acquisition of US firms. * US national interests would be best served by maintaining CFIUS's narrow focus on specific threats that might arise from particular acquisitions. Instead of CFIUS screening commercial transactions, the US export control regime should be updated through multilateral agreement with allies and partner countries. For more than half a century, the United States has led a global effort to liberalize flows of trade and investment across borders. The underlying philosophy has been that expanding trade and investment is a win-win process that benefits all participating nations. Liberalization of trade and investment allows countries to take advantage of natural comparative advantage and capture economics of scale and scope. Even more important, liberalization of trade and investment generates competition, dis- ruption, and pressure for innovation and imitation that pushes the technological frontier ever outward. The end result is improved products, goods, services, and applications that benefit consumers, firms, and communities across national borders worldwide. The contrary view embraces some form of mer- cantilism, or neo-mercantilism, contending that economic relations between nations are a zero-sum phenomenon in which some economies gain at the expense of others. This inevitably leads to national industrial policies that select which industries should be promoted or protected from the rigors of inter- national competition. Committee on Foreign Invest- ment in the United States (CFIUS) procedures have AMERICAN ENTERPRISE INSTITUTE

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