The US has not blocked a single acquisition by investors from Gulf countries ever since the Dubai ports controversy, claims Deputy Secretary of the Department of Treasury Robert M. Kimmitt.

“Since Dubai Ports, the Committee on Foreign Investment in the United States (CFIUS) has reviewed 207 transactions, including 15 from four countries it this region (GCC). While three of those acquisitions from the region proceeded to an investigation, none of them was blocked,” he said at a press meet here.

The US government's handling of Dubai Ports transaction, as well as the US public's reaction and the aftermath of the case, called into question America's long standing commitment to open investment, recalled Kimmitt.

Since then, the US government has been trying correct this image and reinforce its “unshaken commitment” to welcoming foreign investment.

“Our strategy has three components such as improving our internal processes and reaffirming our open investment policy, working with Congress on CFIUS reform legislation to rebuild faith in and strengthen the national security review process, while remaining open to foreign investment, and engaging bilaterally, regionally, and multilaterally with our international partners to stress the importance of opening markets to investment opportunities,” he elaborated.

Later addressing the US-GCC Investment Forum, he said: “The Middle East and North Africa (Mena) is a region of high priority for our open investment policy. In 2003, President Bush proposed the Middle East Free Trade Initiative, a plan of graduated steps for Middle Eastern nations to increase trade and investment among themselves and with the United States. We already have Bilateral Investment Treaties (BITs) or Free Trade Agreements (FTAs) containing investment chapters with Bahrain, Egypt, Jordan, Morocco, and Tunisia, as well as an FTA with Oman that has been ratified but not yet implemented. We have also explored BITs and FTAs with several other countries in the region, as well as Trade and Investment Framework Agreement action plans with nine countries in the region.”

Beyond government initiatives, there is also a growing interest by US investors in the region. From 2000-2006, the stock of US foreign direct investment (FDI) in Gulf Cooperation Council (GCC) countries increased by $9.4 billion a 57 per cent increase.

“Granted, we started from a relatively small base, but this increase significantly exceeds the 45 per cent increase in US FDI to all other destinations,” he said.

The Middle East region is also a significant source of investment and potential investment into the United States. The United Nations Conference on Trade and Development reports that the global stock of outward FDI from Middle Eastern countries has more than tripled since 2001, totalling $43 billion in 2006. Official US data shows that over $17 billion of that $43 billion was invested in the United States, nearly a two-fold increase from 2001 to 2006.

He said open economies are crucial in today's integrated global marketplace. The free movement of capital across borders is a crucial source of economic growth. International trade has often garnered the most headlines, and it is indeed an essential component of open economies. However, international investment is of substantial and growing importance. In fact, investment flows dwarf trade flows. In the United States, foreign purchases of long term securities from US residents totalled over $26 trillion last year, compared to $1.4 trillion in US exports of goods and services. Investment flows are also growing more rapidly than trade flows. Global private capital flows, as measured by the World Bank, grew at almost double the rate of trade flows from 1991 to 2005 13.7 per cent annual growth of capital flows versus 7.8 per cent annual growth of exports.
There is growing global recognition of the importance of FDI and open investment<