STATEMENT BY THE HONORABLE NORMAN D. SHUMWAY BEFORE THE HOUSE BANKING SUBCOMMITTEE ON ECONOMIC STABILIZATION HEARING ON FOREIGN INVESTMENT IN THE UNITED STATES Thank you, Madam Chairman. I join you in welcoming the witnesses to this hearing on foreign investment in the United States. This is an important issue, and one that has received some public attention recently, but unfortunately not for the same reasons. Public attention has been drawn to foreign investment most recently by the purchases by Mitsubishi of an interest in the Rockefeller Center in New York City and by Sony of Columbia Pictures. Despite the prominence given to these transactions in the media, they represent only a very small part of an increasingly world-wide marketplace in which borrowing and lending and buying and selling take place. Indeed, in contrast to the perhaps sentimental significance of the Rockefeller transaction, Mitsubishi actually purchased less than 15% of the Rockefeller Center. Total foreign direct investment in the U.S. accounts for only 5% of our country's total tangible wealth. Rather than get carried away by concerns about rights to certain ice rinks, old movies and TV shows, we need to safeguard the opportunities for foreigners to lower the interest rate paid by the Government by purchasing Treasury bills and for foreigners to employ our workers whose jobs might otherwise be lost to foreign workers. At the same time we need to take all appropriate steps available to us to ensure that American goods can fairly compete in the global market. And finally, we need to live within our means, as a nation, but more particularly as the U.S. Congress and the Federal Government. Problems related to foreign investment are just one of many reasons that I have supported a Constitutional amendment to require the Congress to balance the Federal Budget. The issues regarding foreign investment are complex and prone to sensationalism. of our best efforts. Nonetheless, they are issues worthy WRITTEN STATEMENT of ELLIOT L. RICHARDSON CHAIRMAN ASSOCIATION FOR INTERNATIONAL INVESTMENT on U.S. POLICY TOWARD INTERNATIONAL INVESTMENT SUBCOMMITTEE ON ECONOMIC STABILIZATION I. INTRODUCTION. Good morning, Madam Chairman. My name is Elliot L. Richardson. I am the Chairman of the Association for International Investment ("AFII"), on whose behalf I appear before you today. AFII represents a partnership of foreign investors, U.S. multinational corporations, and state and local governments concerned with maintaining and expanding freedom of international investment in response to market forces. Like U.S. industry generally, AFII's members recognize two principal and interrelated facts: they understand the need to attract investors to the United States to meet this country's requirements for investment capital, and they are concerned that the erection of barriers to international investment would lead to reciprocal action by other governments with serious adverse effects on the ability of American companies to do business abroad. AFII supports the fundamental policy of the U.S. Government, which welcomes market-driven international direct 2 investment and which seeks to lower barriers to such investment worldwide. I should note that I have had the opportunity to testify at every Congressional hearing on the subject of U.S. international investment policy since AFII was founded early in 1988,2/ and I welcome the opportunity to appear before this Subcommittee. U.S. The question this Subcommittee is addressing policy toward international investment is a most important - The one for the United States, which is both host and home to the world's largest amount of international investment. competitiveness and future economic vitality of America are at the very heart of your deliberations. 1/ 2/ See Statement by the President on International Investment Hearing on S. 289, "The Foreign Ownership Disclosure Act of |