June 15, 2017
SelectUSA Program: U.S. Inbound Investment Promotion
SelectUSA, a Department of Commerce program
established in 2011 (Executive Order 13577), aims to
coordinate federal efforts to attract and retain “job-creating”
business investment in the United States. It focuses both on
drawing foreign investors to the United States and working
to “re-shore” U.S. firms. SelectUSA presents issues for
Congress as to its possible codification, funding, economic
impact, and implications for other investment issues.
Inbound Investment Context
A key aspect of U.S. investment policy is promoting
foreign direct investment (FDI). The United States is a
major destination for FDI. Foreign firms invest in the
United States by establishing new operations (“greenfield
investments”), purchasing existing operations of another
company (e.g., mergers and acquisitions), or adding capital
to existing U.S. operations. In 2016, the United States had
$6.4 trillion in stock of inbound FDI measured at marketvalue (U.S. Bureau of Economic Analysis, BEA, data).
Expenditures for acquisitions of companies ($408.1 billion)
exceeded new establishments ($11.2 billion) in 2015.
Role of Inbound Investment in the U.S. Economy
In 2014, majority-owned affiliates of foreign firms in the United
States (e.g., U.S. operations of Japanese automaker Toyota or
German life science company Bayer) exported $425 million and
imported $724 million in goods, conducted $57 million in
research and development, and employed over 6 million workers
in the United States—more than one-third in manufacturing.
Other sectors included wholesale and retail trade, finance and
insurance, professional services, and information.
Global Markets unit provides both export assistance
services for U.S. firms and inward investment promotion.
An Executive Director leads SelectUSA, with investment
specialists managing portfolios of international markets and
U.S. regions. Global Markets commercial service officers in
regional offices and U.S. foreign missions also support the
program. The Executive Director chairs the Federal
Interagency Investment Working Group, which aims to
enhance coordination in federal assistance for business
In October 2013, President Obama announced a plan to
enhance SelectUSA by making investment promotion a
formal part of the portfolio of U.S. ambassadors and their
embassy staff (starting with priority markets for FDI),
enhancing investment advocacy at the highest levels of the
U.S. government. The Obama Administration subsequently
in March 2015 established a federal advisory committee to
solicit input on retaining FDI.
Program Activities. SelectUSA services include:
providing information and data on FDI to businesses
connecting companies with EDOs and federal resources;
acting as an “ombudsman” to help companies navigate
the U.S. regulatory environment;
providing an international platform for EDOs to market
their locations as investment destinations through the
annual SelectUSA Investment Summit, “road shows”
abroad, and customized fee-based services; and
Source: BEA, 2014 preliminary data.
coordinating high-level engagement at the national level
The U.S. large consumer market, strong legal protections
such as for intellectual property rights, high labor
productivity, and position as an innovation and technology
hub make the United States an attractive destination for
investors. At the same time, emerging economies such as
China are increasingly competitive destinations for FDI as
well, leading to increased global competition to attract
SelectUSA states that it operates with “strict geographical
neutrality,” whereby it does not advocate for investment in
one U.S. location over another, though it is able to assist
specific locations with individual promotional activities on
a first-come, first-served basis. It also states that it does not
engage in activities that encourage inbound investment by
state-owned enterprises (SOEs).
Inbound investment promotion primarily takes place at state
and local levels, such as through economic development
organizations (EDOs), which work to attract business
investment locally and regionally. Federal efforts to
coordinate investment promotion also exist. The Invest in
America program, SelectUSA’s predecessor, was launched
in 2007 under the Commerce Department.
Select USA Overview
SelectUSA Structure. The International Trade
Administration (ITA) of the Department of Commerce
houses SelectUSA in its Global Markets unit (formerly
called the U.S. and Foreign Commercial Service). The
with EDOs to advocate that a firm invest in the United
States over a foreign location for a particular project.
According to SelectUSA, it has facilitated over $23 billion
in investment and helped to create or retain “tens of
thousands of U.S. jobs.”
Funding. Appropriations for the Commerce Department
have not included a line item for SelectUSA. The ITA’s
congressional budget justifications (CBJ) from prior years
generally have provided funding levels for SelectUSA.
Funding levels for the program have grown from less than
$1 million to up to $10 million in FY2017. The FY2017
CBJ under the Obama Administration requested up to $20
million in funding for SelectUSA. In contrast, the FY2018
CBJ under the Trump Administration does not appear to
SelectUSA Program: U.S. Inbound Investment Promotion
include any specific funding request for SelectUSA, but
mentions it in its budget request for Global Markets overall.
Figure 1. SelectUSA Funding, FY2012-2017
Millions of U.S. Dollars
about job losses, for instance, from mergers and
acquisitions. To the extent that foreign investors compete
with domestic firms for capital funds, questions could arise
about the net U.S. economic impact of FDI. (Outbound FDI
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.
Source: CRS, compiled from ITA-provided data.
Key Issues for Congress
Authorization and Funding. A possible issue for Congress
is whether to codify SelectUSA, currently operating under
an executive order. Supporters argue that a permanent or
long-term authorization could stabilize SelectUSA’s role in
attracting investment and, in turn, boost U.S. exports and
jobs and send a message internationally of U.S. interest in
competing for investment. Critics contend that the program
duplicates existing state- and local-level investment
promotion programs and that policies focusing on
improving the U.S. investment environment, such as in
terms of education, the labor force, and the tax system,
would be more effective in attracting and retaining FDI.
Past SelectUSA Legislative Efforts
Congress, S. 3097, reported favorably out of
committee with an amendment, would have codified
SelectUSA, and H.R. 1007 would have authorized
appropriations for it at $20 million annually for FY2016-2020.
Bills to authorize the program also were introduced in the
113th Congress. In contrast, in the 112th Congress, an
amendment proposed to the FY2013 Commerce
appropriations bill would have prohibited any funds available
under the bill to conduct SelectUSA activities.
The data available on SelectUSA’s website appear to focus
more on analyzing U.S. FDI levels, rather than on metrics
regarding SelectUSA’s performance, but the U.S.
government periodically has provided information about
outcomes associated with the program. Congress could
consider whether to require more regular reporting.
Implications for Other Investment Issues. A focus on
promoting inbound investment through SelectUSA could
confront Congress with other issues, such as the following.
National Security. In addition to promoting FDI, U.S.
investment policy includes consideration of the national
security impact of certain FDI transactions in the United
States, such as potential foreign acquisitions of firms in
critical U.S. sectors, through the Committee on Foreign
Investment in the United States (CFIUS). This duality in
U.S investment policy presents Congress with questions of
how to balance federal investment promotion with efforts to
protect national security.
The Trump Administration’s decision to hold a 2017
SelectUSA Investment Summit, hosted by Secretary of
Commerce Wilbur Ross, appears to signal support for
investment attraction efforts generally. Moreover,
SelectUSA activities appear to be consistent with President
Trump’s direct efforts to retain certain U.S. firms’
manufacturing plants in the United States and dissuade
others from moving operations abroad. Yet, it is possible
that SelectUSA could figure into the Administration’s
ongoing review of executive branch agencies and programs,
based on an executive order issued by the President in
March 2017 to develop a comprehensive reorganization
plan to improve the U.S. government’s effectiveness,
efficiency, and accountability.
U.S. Liability. Investment promotion efforts that target
countries with U.S. bilateral investment treaties and free
trade agreements with investor-state dispute settlement
(ISDS) could raise questions about potential U.S.
government liability from suits by foreign investors. ISDS
is binding arbitration of private, foreign investors’ claims
against host governments alleging violations of investment
obligations, such as non-discriminatory and minimum
standard of treatment and protection against expropriation
without compensation—protections reflected in the U.S.
Constitution. U.S. agreements in force with ISDS account
for a fraction of U.S. inbound FDI stock. To date, 17
individual ISDS cases have been initiated against the
United States, with none decided against it, and U.S.
investors have been leading users of ISDS globally.
More Information. See CRS In Focus IF10636, Foreign
Direct Investment: Overview and Issues, by James K.
Jackson and Shayerah Ilias Akhtar.
Shayerah Ilias Akhtar, Specialist in International Trade
Economic Impact. Inbound investment is tied to
supporting U.S. jobs and exports, but also raises concerns
SelectUSA Program: U.S. Inbound Investment Promotion
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF10674 · VERSION 2 · NEW