The Stakes for American Jobs, Exports, and Prosperity

International investment is critical to U.S. business. While 74% of U.S. multinationals’ capital expenditures are in the United States, they have invested more than $3 trillion abroad.1

Most U.S. investment abroad is in sectors that cannot be served by means of exports, and 93% of the production of foreign affiliates of U.S. multinational companies is sold outside the United States. Rather, investment abroad boosts U.S. exports. U.S. companies that have invested abroad accounted for 48% of all U.S. merchandise exports in 2006.2

The benefits of U.S. investment abroad come right back home. U.S. companies earned more than $5 trillion in revenue through their foreign subsidiaries in 2008. In fact, roughly half of all revenue earned by Fortune 200 companies came from their foreign affiliates in recent years. That revenue helps fund U.S. multinationals’ research and development, 80% of which is performed in the United States.

An open investment regime that allows U.S. multinationals to invest abroad does not create a zero sum game in which a job created abroad is a job eliminated at home. A recent study found that U.S. companies that invest abroad create 2.3 jobs in the United States for every one they create overseas. U.S. companies that invest abroad tend to be more successful in a variety of ways, and they pay higher wages and create more jobs in the United States than companies that do not invest abroad.3

Nor does an open investment regime that allows U.S. multinationals to invest abroad create a race to the bottom. Two-thirds of U.S. investment abroad goes to developed countries with wages and labor standards similar to those in the United States. When U.S. multinationals do invest in developing countries, they often create the best paying jobs around, with the best working conditions.

Investment from abroad also benefits Americans. Foreign direct investment in the United States totals more than $2 trillion and sustains five million American jobs with an annual payroll of $350 billion.

For three decades, the United States has negotiated bilateral investment treaties (BITs) to protect U.S. investments abroad. BITs promote respect for the rule of law, the sanctity of contracts, and property rights. They level the playing field by guaranteeing “national treatment” for U.S. companies so they enjoy the same rights and responsibilities as domestic investors.

However, the United States ranks 44th among countries with negotiated BIT agree-ments, far behind most of our major trading partners and economic competitors, placing U.S. companies at a serious disadvantage. America’s continued prosperity in a highly competitive world demands that we negotiate more investment agreements.

1All sources U.S. Department of Commerce unless otherwise noted.2Matthew J. Slaughter, “How U.S. Multinational Companies Strengthen the U.S. Economy,”Business Roundtable and the United States Council Foundation, March 2009.3Slaughter, op. cit.

Albania ArmeniaArgentina Azerbaijan Bahrain Bangladesh Bolivia Bulgaria Cameroon CongoDemocraticRepublicofCongoCroatia CzechRepublicEcuadorEgypt EstoniaGeorgiaGrenada HondurasJamaica

JordanKazakhstanKyrgyzstanLatviaLithuaniaRepublicofMoldovaMongoliaMoroccoMozambique PanamaPolandRomania SenegalSlovakiaSriLankaTrinidadandTobagoTunisiaTurkeyUkraineUruguay

U.S. BIT Partners

BahrainCanadaChileCostaRicaDominicanRepublicElSalvadorGuatemalaHonduras

JordanMexicoMoroccoNicaraguaOmanPeruSingapore

Partners to U.S. FTAs with Investment Protections

International Investment

International InvestmentThe Stakes for American Jobs,

Exports, and Prosperity

The Stakes for American Jobs, Exports, and Prosperity

International investment is critical to U.S. business. While 74% of U.S. multinationals’ capital expenditures are in the United States, they have invested more than $3 trillion abroad.1

Most U.S. investment abroad is in sectors that cannot be served by means of exports, and 93% of the production of foreign affiliates of U.S. multinational companies is sold outside the United States. Rather, investment abroad boosts U.S. exports. U.S. companies that have invested abroad accounted for 48% of all U.S. merchandise exports in 2006.2

The benefits of U.S. investment abroad come right back home. U.S. companies earned more than $5 trillion in revenue through their foreign subsidiaries in 2008. In fact, roughly half of all revenue earned by Fortune 200 companies came from their foreign affiliates in recent years. That revenue helps fund U.S. multinationals’ research and development, 80% of which is performed in the United States.

An open investment regime that allows U.S. multinationals to invest abroad does not create a zero sum game in which a job created abroad is a job eliminated at home. A recent study found that U.S. companies that invest abroad create 2.3 jobs in the United States for every one they create overseas. U.S. companies that invest abroad tend to be more successful in a variety of ways, and they pay higher wages and create more jobs in the United States than companies that do not invest abroad.3

Nor does an open investment regime that allows U.S. multinationals to invest abroad create a race to the bottom. Two-thirds of U.S. investment abroad goes to developed countries with wages and labor standards similar to those in the United States. When U.S. multinationals do invest in developing countries, they often create the best paying jobs around, with the best working conditions.

Investment from abroad also benefits Americans. Foreign direct investment in the United States totals more than $2 trillion and sustains five million American jobs with an annual payroll of $350 billion.

For three decades, the United States has negotiated bilateral investment treaties (BITs) to protect U.S. investments abroad. BITs promote respect for the rule of law, the sanctity of contracts, and property rights. They level the playing field by guaranteeing “national treatment” for U.S. companies so they enjoy the same rights and responsibilities as domestic investors.

However, the United States ranks 44th among countries with negotiated BIT agree-ments, far behind most of our major trading partners and economic competitors, placing U.S. companies at a serious disadvantage. America’s continued prosperity in a highly competitive world demands that we negotiate more investment agreements.

1All sources U.S. Department of Commerce unless otherwise noted.2Matthew J. Slaughter, “How U.S. Multinational Companies Strengthen the U.S. Economy,”Business Roundtable and the United States Council Foundation, March 2009.3Slaughter, op. cit.

Albania ArmeniaArgentina Azerbaijan Bahrain Bangladesh Bolivia Bulgaria Cameroon CongoDemocraticRepublicofCongoCroatia CzechRepublicEcuadorEgypt EstoniaGeorgiaGrenada HondurasJamaica

JordanKazakhstanKyrgyzstanLatviaLithuaniaRepublicofMoldovaMongoliaMoroccoMozambique PanamaPolandRomania SenegalSlovakiaSriLankaTrinidadandTobagoTunisiaTurkeyUkraineUruguay

U.S. BIT Partners

BahrainCanadaChileCostaRicaDominicanRepublicElSalvadorGuatemalaHonduras

JordanMexicoMoroccoNicaraguaOmanPeruSingapore

Partners to U.S. FTAs with Investment Protections

International Investment

International InvestmentThe Stakes for American Jobs,

Exports, and Prosperity