Q: There has been a fair amount of protectionist and anti-free-trade rhetoric on the campaign trail in the lead-up to the US presidential election in November. Is this having an effect on investor sentiment towards the US?
A: What I’m seeing is a recognition there has never been a better time to invest in the US. There is a bit of looking past momentary comments, and instead looking at the big picture, which is recognising the importance of the strength of rule of law, intellectual property protection, our energy supply being so large, and the supply chain being responsive and capable of helping companies of all sizes really build here. And our focus on R&D is pretty interesting. We are seeing more and more small and medium-sized businesses interested in the support of [investment promotion vehicle] SelectUSA. We’ve had more than 1700 businesses reach out to us just in the first half of 2016. And so, frankly, elections always cause lots of noise, but businesses are looking at a long-term investment question. And they are liking what they see here.
Q: The global marketplace is increasingly competitive. What are you doing to maintain high levels of inward FDI and stay ahead of the curve?
A: Our stock of FDI is at its highest level ever. I think we’re up to $2900bn as of 2014. The average flow over the past five years has been about $270bn a year. So while we’re not seeing reticence, we don’t take anything for granted. We have to act, and we have to continue to push for policies that are going to increase our competitiveness. That is why the Trans-Pacific Partnership [TPP] is so important, and why we have to stay vigilant about developing a skilled workforce. That is why President Obama has announced five more advanced manufacturing institutes.
We’ve got to stay on the leading edge of innovation if we are going to continue to win FDI. That also means that we need to address business tax reform. We need to continue to increase our investment in infrastructure. We need immigration reform as well. Those are policies that we have not been able to put through, but that are important to continued US competitiveness.
Q: What is the risk to the US of a turn toward the protectionist policies that are being laid out by Republican presidential candidate Donald Trump?
A: What is at risk is the long-term position of US businesses around the world. The other thing at risk in the short run is our leadership in the Asia-Pacific region. It’s important not just for flows of dollars and commerce for jobs; it’s important for our national security relations. The closer we are tied commercially, the closer we are tied as allies on the world stage. TPP is our idea and we’ve negotiated this with 11 other countries. To now say that we don’t want to do this really calls into question US leadership.
We, as leaders, must do a better job of explaining that while some jobs might be affected negatively by trade, there are a lot more that benefit from this kind of free flow. So I think there is a lot at risk. And with the TPP it’s really dangerous to not give US companies equal access to the fastest growing marketplace in the world. I don’t know how to say that with more clarity.