This new sense of urgency seems to emanate from the government’s analysis of US FDI statistics, which show a downward trend in market share since 2001, even as overall global FDI has grown. In addition, as a result of the controversy when the Dubai Ports and the Chinese Unocal acquisitions were aborted, Congress has been seeking ways to ‘improve’ the Committee on Foreign Investments in the US (CFIUS) process. CFIUS-proposed improvements are already perceived abroad as less welcoming to investors, even though fewer than 10% of transactions (related to national security) require a CFIUS review.

And, as this new era of FDI support begins, other policy makers are assessing unionisation procedures, including the potential elimination of secret ballots when voting on unionisation. Ironically, this could have an unintended impact on the states with historic union constituencies and which are not sheltered by right-to-work (non-closed shop) provisions. I have never had an international business client who wants to have a union, and many have asked to consider only the 22 states that have right-to-work laws. Restacking the deck when it comes to unionisation may cause international firms that might have been willing to take their chances in a secret ballot on unionisation in one of the other 28 states to reconsider. They see the end of secret ballots as opening the door to union intimidation tactics.


Finally, FDI scorekeeping at the summary level misses much of the story. First, FDI share does not reflect the well-paid technology shop, paying excellent salaries to skilled professionals but without much in the way of capital invested. And second, for the past five years, FDI volumes have correlated directly with the pace of global mergers and acquisitions (M&As). Most of what is called FDI is really just a change in ownership, not a new, greenfield operation. In 2006, about 20% of global M&A involved private equity acquisitions. Many funds headquartered in the US have raised substantial capital abroad (not counted as direct investment), but it still counts as US outbound FDI when the funds acquire companies abroad (an accelerating trend) and that cuts the inbound market share tally as well.

Daniel Malachuk works with business and government leaders on global direct investment strategies. He has advised many of the world’s leading companies and served in the public sector as director of White House operations.