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International Trade and Finance

Notes In addition to this statement of general support, the Bush Administration issued a policy statement
that commits the Administration to four objectives :
• Reinforce the principle that a domestic climate conducive to foreign investment strengthens national
security. Meeting the challenges of a post-9/11 world need not require securing one at the expense
of the other. The United States recognizes that growing inflows of foreign investment are necessary
to expand levels of employment, innovation, and competitiveness in this country. Only those
safeguards that are clearly necessary to protect our national security should be maintained.
• Actively target unreasonable and discriminatory barriers to investment. The United States
encourages a broad acceptance of the national-treatment principle in all countries and places a
premium on the protection of U.S. investments abroad. The United States opposes measures that
distort international investment flows, including trade-related or other performance requirements,
discriminatory treatment of foreign investment, and expropriation without compensation. In turn,
when countries promise to protect investment and eliminate such distortions, investors must
have the ability to enforce those binding promises in neutral international settings that are free
from the political intervention of governments. Further, countries need to be responsive to the
needs of investors for access to innovative cross-border financial services. The United States will
continue to allow foreign investors open and fair access to investment opportunities under our
statutes and regulations and in accordance with international law, and will continue to welcome
investment through programs such as the Invest in America initiative.
• Work with our partners in the WTO to strengthen the rules-based trading system so that it
continues to promote open markets, trade reform and new opportunities for development and
growth. My Administration is committed to completing the Doha Development Round with an
agreement that opens markets for goods and services, ensures reform of agriculture and
strengthens WTO rules, including in key areas such as trade facilitation. The predictability,
certainty, and transparency of the system enhance opportunities for international investment
by building investor confidence.
• Promote an international environment in which international investment can make the greatest
contribution to the development process. The United States has initiated the Millennium
Challenge Account, which assists developing countries that create and maintain sound policy
environments, including governing justly, investing in people, and encouraging economic
freedoms. Through our bilateral and multilateral economic assistance programs, the United
States will continue to explore ways to increase both public and private capital flows and support
international investment in the developing world. As countries continue to adopt free market
principles and democratic reforms, international investment is necessary to nurture market-
oriented development and reduce debt service burdens. Economic freedom is one of the single
greatest antidotes to poverty worldwide, and a positive link exists between the liberalization of
investment flows and greater international trade.
Foreign Direct Investment in the U.S. Economy

Foreigners invest in the U.S. economy in a number of ways and for a number of reasons. These
investments can be divided roughly into two broad categories, portfolio investments, or investments
in corporate stocks and bonds and U.S. government securities, and direct investment, or investments
in U.S. businesses and real estate. In 2008, foreigners invested over $2.0 trillion dollars in the U.S.
economy, $320 billion of which was in direct investment, with the rest of the funds invested in the
broader category of portfolio investment. Typically, the Department of the Treasury tracks portfolio
investments since a substantial part of these investments is in U.S. Treasury securities. The Treasury
Department has shared responsibilities for tracking direct investment with the Department of
Commerce, because the Commerce Department’s Bureau of Economic Analysis conducts surveys of

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