Q As president, what kind of approach would Senator McCain take towards foreign investment into the US?

A The Patriot Act that Senator [Barack] Obama supports is not one that Senator McCain supports. It is not possible to label companies as patriotic and unpatriotic, and the act looks like a full employment act for tax lawyers but doesn’t appear to be workable in any real way.

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Senator McCain would instead want to lower the US corporate income tax rate from 35% to 25% – it’s out of line with the rest of the world – and make this a better place to be a headquartered multinational.

He would have a permanent R&D tax credit that is reformed and is a flat credit based on 10% of compensation costs paid for R&D in the US. And he has a business expensing provision for buying equipment – anything with a five-year life or less.

We see a future in which large corporations are located in the US, doing their R&D here, also doing their manufacturing here, and then selling globally.

On the issue of crossborder mergers and acquisitions, we’ve just gone through a round of legislation for the Committee on Foreign Investment in the US.

The senator’s view is that we should use that process – use it extensively and flag up those transactions that have real security concerns but otherwise we don’t need to be targeting any other efforts in this regard. He thought the whole round of political outcry over the ports a year ago was really not America’s finest moment, and those are not actions he supports.

Q How does he intend to make the case to Americans that foreign acquisitions are not to be feared?

A For a start he will make the case – he won’t choose his positions on the basis of political expediency.

How do you sell Americans on it? You undertake the reforms necessary for Americans to believe their government is working on their behalf. There’s a tremendous amount of cynicism right now in the US about narrow special interests running Washington and the large population being left behind. Clean that up so that people have some faith that when a trade agreement gets negotiated, it’s done with them in mind, not some sort of special interests.

He’s also going to do a large reform of unemployment insurance and job training programmes so that they are available to every worker who is displaced, regardless of the source of displacement. And we should no longer have several trade-specific adjustment programmes, which send the message that trade is bad, because special amelioration is necessary afterwards, and other sources of job loss are okay. Neither is okay.

We think those are steps that pave the way for a better discussion about trade in the US.

Q How would he address the issue of quotas on H1B visas?

A He is in favour of not just comprehensive immigration reform that deals with the border, employers, temporary worker programmes, and the undocumented, but he has always felt we should have a much more robust H1B visa programme and one that you could tie to market conditions so that it will expand as necessary and contract when there is less demand.

Q Are you worried about voters blaming the Republican party for the current economic slowdown, which might make it harder for the senator to come out in front on economic issues?

A It would be harder if he were in lockstep with the Bush administration but he’s fought them on so many fronts over the years it would be hard to make the case that he’s been responsible for this particular episode.

He’s out there talking about his Jobs for America plan – it’s about the future, it’s a fundamentally pro-growth agenda. It’s very different to Barack Obama’s and we’re happy to have that debate.

Q If the senator had been in the White House during the onset of the credit crunch and the banking sector problems, how might he have handled the situation?

 

A I think he’d have been more interested in effective regulation earlier. The clear 20/20 hindsight here is that mortgage brokers and some of the mortgage origination were absolutely inappropriate.

We had some problems with the ratings agencies. Since transparency and accountability are central themes of his, they would not have gone on so long.