March 23, 2006
Snow declares foreign investment welcome in US
By Glenn Somerville
HAGERSTOWN, Maryland (Reuters) - The United States
continues to welcome foreign investment, Treasury Secretary
John Snow declared on Thursday, even as U.S. lawmakers readied
legislation seeking more oversight of deals such as the
controversial Dubai Ports World contract.
Speaking to reporters after touring a Volvo truck engine
making plant, Snow also said no date has been set for issuing a
hotly awaited report on currency practices of key trade
partners, including China.
"We don't have a precise timetable on that," Snow said.
"That's being worked on." The currency report is issued twice a
year and normally would come in April but it is often delayed.
Snow was asked to comment on the Dubai Ports World deal in
which the United Arab Emirates company had sought to take over
management of some U.S. ports, provoking an outpouring of U.S.
concerns about security.
"I'm pleased to again emphasize that America welcomes
investment from abroad," Snow said. "America is open for
foreign investment, we attract an enormous amount of foreign
investment every year. We want to continue to make America a
place that is the best place in the world to invest."
The Bush administration, which had approved the ports deal
via its inter-agency Committee on Foreign Investment in the
United States (CFIUS), was taken by surprise at congressional
anger over the contract, and is aiming now to make the case
that the United States still wants foreign investment.
Snow said the Volvo engine plant was a good example of a
foreign investor contributing toward creating well-paying jobs
and boosting U.S. exports.
But on Capitol Hill, Senate Banking Committee Chairman
Richard Shelby was preparing legislation an aide said would
"increase congressional oversight" of the administration's
review of deals "through notification and reporting
requirements" to Congress.
Shelby, an Alabama Republican, was considering an option
for a joint congressional resolution of disapproval which could
overturn any foreign investment contract the executive branch
had approved, the aide said. Shelby has been consulting
Democrats and is expected to unveil his bill by next week.
The financial services industry wrote to Shelby to warn
against scaring off foreign investment, urging Congress to
limit changes to those improving the security review of deals.
"Certain legislative approaches" would amount to a "retreat
from open markets," warned the letter by the American Bankers
Association, the Securities Industry Association, and others.
The ports firestorm has already spread to other deals.
Another UAE company, Dubai International Capital, is under
CFIUS review for its planned $1.24 billion acquisition of
London-based Doncasters Group Ltd.
It operates plants making military parts in nine U.S.
locations, and a Democratic lawmaker, Georgia Rep. John Barrow,
this week asked to tour one of them to get more information.
Lawmakers have also been agitating on the currency issue
this week, visiting Beijing and saying the U.S. Treasury
appeared well on the way toward toughening its stance with
China by moving toward naming Beijing a currency manipulator.
"The indications we've gotten from the administration ...
are that if the policy doesn't change, they'll have no choice
but to do that," Sen. Charles Schumer said on Thursday in a
conference call from China.
Democrat Schumer of New York, along with Republicans Tom
Coburn of Oklahoma and Lindsey Graham of South Carolina, have
been meeting high-level Chinese officials to warn that Beijing
must let the yuan rise in value, to help reduce the burgeoning
U.S. trade deficit.
In 2005, the U.S. trade deficit climbed 17.5 percent to a
record $725.8 billion and the deficit with China shot up 24.5
percent from 2004 to a record $201.6 billion.
In July, Beijing revalued the yuan by 2.1 percent and freed
it from a dollar peg to float within managed bands. But since
then, it has gained only a little more than 1 percent in value
and the tempo of U.S. criticism has picked up sharply.
The U.S. Treasury has hinted it may brand Beijing a
currency manipulator in a report to Congress this spring, which
would make it more likely China would face future sanctions but
might also heighten bilateral tensions.
(Additional reporting by Susan Cornwell and Doug Palmer)