June 15, 2017
SelectUSA Program: U.S. Inbound Investment Promotion
SelectUSA, a Department of Commerce program
Global Markets unit provides both export assistance
established in 2011 (Executive Order 13577), aims to
services for U.S. firms and inward investment promotion.
coordinate federal efforts to attract and retain “job-creating”
An Executive Director leads SelectUSA, with investment
business investment in the United States. It focuses both on
specialists managing portfolios of international markets and
drawing foreign investors to the United States and working
U.S. regions. Global Markets commercial service officers in
to “re-shore” U.S. firms. SelectUSA presents issues for
regional offices and U.S. foreign missions also support the
Congress as to its possible codification, funding, economic
program. The Executive Director chairs the Federal
impact, and implications for other investment issues.
Interagency Investment Working Group, which aims to
Inbound Investment Context
enhance coordination in federal assistance for business
investment decisions.
A key aspect of U.S. investment policy is promoting
In October 2013, President Obama announced a plan to
foreign direct investment (FDI). The United States is a
enhance SelectUSA by making investment promotion a
major destination for FDI. Foreign firms invest in the
formal part of the portfolio of U.S. ambassadors and their
United States by establishing new operations (“greenfield
embassy staff (starting with priority markets for FDI),
investments”), purchasing existing operations of another
enhancing investment advocacy at the highest levels of the
company (e.g., mergers and acquisitions), or adding capital
U.S. government. The Obama Administration subsequently
to existing U.S. operations. In 2016, the United States had
in March 2015 established a federal advisory committee to
$6.4 trillion in stock of inbound FDI measured at market-
solicit input on retaining FDI.
value (U.S. Bureau of Economic Analysis, BEA, data).
Expenditures for acquisitions of companies ($408.1 billion)
Program Activities. SelectUSA services include:
exceeded new establishments ($11.2 billion) in 2015.
ï‚· providing information and data on FDI to businesses
and EDOs;
Role of Inbound Investment in the U.S. Economy
ï‚·
In 2014, majority-owned affiliates of foreign firms in the United
connecting companies with EDOs and federal resources;
States (e.g., U.S. operations of Japanese automaker Toyota or
 acting as an “ombudsman” to help companies navigate
German life science company Bayer) exported $425 million and
the U.S. regulatory environment;
imported $724 million in goods, conducted $57 million in
ï‚·
research and development, and employed over 6 million workers
providing an international platform for EDOs to market
in the United States—more than one-third in manufacturing.
their locations as investment destinations through the
Other sectors included wholesale and retail trade, finance and
annual SelectUSA Investment Summit, “road shows”
insurance, professional services, and information.
abroad, and customized fee-based services; and
Source: BEA, 2014 preliminary data.
ï‚· coordinating high-level engagement at the national level
with EDOs to advocate that a firm invest in the United
States over a foreign location for a particular project.
The U.S. large consumer market, strong legal protections
such as for intellectual property rights, high labor
SelectUSA states that it operates with “strict geographical
productivity, and position as an innovation and technology
neutrality,” whereby it does not advocate for investment in
hub make the United States an attractive destination for
one U.S. location over another, though it is able to assist
investors. At the same time, emerging economies such as
specific locations with individual promotional activities on
China are increasingly competitive destinations for FDI as
a first-come, first-served basis. It also states that it does not
well, leading to increased global competition to attract
engage in activities that encourage inbound investment by
investment.
state-owned enterprises (SOEs).
Inbound investment promotion primarily takes place at state
According to SelectUSA, it has facilitated over $23 billion
and local levels, such as through economic development
in investment and helped to create or retain “tens of
organizations (EDOs), which work to attract business
thousands of U.S. jobs.”
investment locally and regionally. Federal efforts to
coordinate investment promotion also exist. The Invest in
Funding. Appropriations for the Commerce Department
America program, SelectUSA’s predecessor, was launched
have not included a line item for SelectUSA. The ITA’s
in 2007 under the Commerce Department.
congressional budget justifications (CBJ) from prior years
generally have provided funding levels for SelectUSA.
Select USA Overview
Funding levels for the program have grown from less than
$1 million to up to $10 million in FY2017. The FY2017
SelectUSA Structure. The International Trade
CBJ under the Obama Administration requested up to $20
Administration (ITA) of the Department of Commerce
million in funding for SelectUSA. In contrast, the FY2018
houses SelectUSA in its Global Markets unit (formerly
CBJ under the Trump Administration does not appear to
called the U.S. and Foreign Commercial Service). The
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SelectUSA Program: U.S. Inbound Investment Promotion
include any specific funding request for SelectUSA, but
about job losses, for instance, from mergers and
mentions it in its budget request for Global Markets overall.
acquisitions. To the extent that foreign investors compete
with domestic firms for capital funds, questions could arise
Figure 1. SelectUSA Funding, FY2012-2017
about the net U.S. economic impact of FDI. (Outbound FDI
Millions of U.S. Dollars
also presents debate about economic impact, but is outside
of this product’s scope.)
In addition to examining any underlying issues about FDI,
Congress could examine SelectUSA’s role in facilitating
investment and, in turn, U.S. jobs and exports. On one
hand, macroeconomic factors, such as economic growth
rates and exchange, may exert primary influence on
investors’ decisions to locate in the United States and may
outweigh any effect of the program. On the other hand,
SelectUSA may play an additional role in attracting
investments that may have not happened otherwise.
Measuring the impact of a government program can be
complicated and sensitive to the assumptions made.
The data available on SelectUSA’s website appear to focus
more on analyzing U.S. FDI levels, rather than on metrics
Source: CRS, compiled from ITA-provided data.
regarding SelectUSA’s performance, but the U.S.
Key Issues for Congress
government periodically has provided information about
outcomes associated with the program. Congress could
Authorization and Funding. A possible issue for Congress
consider whether to require more regular reporting.
is whether to codify SelectUSA, currently operating under
Implications for Other Investment Issues. A focus on
an executive order. Supporters argue that a permanent or
promoting inbound investment through SelectUSA could
long-term authorization could stabilize SelectUSA’s role in
confront Congress with other issues, such as the following.
attracting investment and, in turn, boost U.S. exports and
jobs and send a message internationally of U.S. interest in
National Security. In addition to promoting FDI, U.S.
competing for investment. Critics contend that the program
investment policy includes consideration of the national
duplicates existing state- and local-level investment
security impact of certain FDI transactions in the United
promotion programs and that policies focusing on
States, such as potential foreign acquisitions of firms in
improving the U.S. investment environment, such as in
critical U.S. sectors, through the Committee on Foreign
terms of education, the labor force, and the tax system,
Investment in the United States (CFIUS). This duality in
would be more effective in attracting and retaining FDI.
U.S investment policy presents Congress with questions of
how to balance federal investment promotion with efforts to
Past SelectUSA Legislative Efforts
protect national security.
In the 114th Congress, S. 3097, reported favorably out of
committee with an amendment, would have codified
U.S. Liability. Investment promotion efforts that target
SelectUSA, and H.R. 1007 would have authorized
countries with U.S. bilateral investment treaties and free
appropriations for it at $20 million annually for FY2016-2020.
trade agreements with investor-state dispute settlement
Bills to authorize the program also were introduced in the
(ISDS) could raise questions about potential U.S.
113th Congress. In contrast, in the 112th Congress, an
government liability from suits by foreign investors. ISDS
amendment proposed to the FY2013 Commerce
is binding arbitration of private, foreign investors’ claims
appropriations bill would have prohibited any funds available
against host governments alleging violations of investment
under the bill to conduct SelectUSA activities.
obligations, such as non-discriminatory and minimum
standard of treatment and protection against expropriation
The Trump Administration’s decision to hold a 2017
without compensation—protections reflected in the U.S.
SelectUSA Investment Summit, hosted by Secretary of
Constitution. U.S. agreements in force with ISDS account
Commerce Wilbur Ross, appears to signal support for
for a fraction of U.S. inbound FDI stock. To date, 17
investment attraction efforts generally. Moreover,
individual ISDS cases have been initiated against the
SelectUSA activities appear to be consistent with President
United States, with none decided against it, and U.S.
Trump’s direct efforts to retain certain U.S. firms’
investors have been leading users of ISDS globally.
manufacturing plants in the United States and dissuade
others from moving operations abroad. Yet, it is possible
More Information. See CRS In Focus IF10636, Foreign
that SelectUSA could figure into the Administration’s
Direct Investment: Overview and Issues, by James K.
ongoing review of executive branch agencies and programs,
Jackson and Shayerah Ilias Akhtar.
based on an executive order issued by the President in
March 2017 to develop a comprehensive reorganization
Shayerah Ilias Akhtar, Specialist in International Trade
plan to improve the U.S. government’s effectiveness,
and Finance
efficiency, and accountability.
IF10674
Economic Impact. Inbound investment is tied to
supporting U.S. jobs and exports, but also raises concerns
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SelectUSA Program: U.S. Inbound Investment Promotion


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https://crsreports.congress.gov | IF10674 · VERSION 2 · NEW

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