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I’m embarrassed to confess that I learned only within the past hour, from my Mercatus Center colleagues Dan Griswold and Amber Porter, of SelectUSA [2]. SelectUSA is an arm of the United States Department of Commerce. SelectUSA’s mission is to encourage foreign direct investment in the U.S. Here’s part of the blurb found at its website page titled “About SelectUSA [3]” (original emphasis):
SelectUSA is a U.S. government-wide program housed in the International Trade Administration [4] at the United States Department of Commerce. Since its inception, SelectUSA has facilitated more than US$ 23 billion in investment, creating and/or retaining tens of thousands of U.S. jobs.
Our mission is to facilitate job-creating business investment into the United States and raise awareness of the critical role that foreign direct investment (FDI) plays in the U.S. economy.
Well now. Here we have a U.S. Government agency whose very goal is to increase the U.S. trade deficit!
I wonder how many people at the Department of Commerce in general, or at SelectUSA specifically, understand that each dollar of foreign investment that SelectUSA succeeds in attracting into the USA is a dollar added to the USA’s current-account (“trade”) deficit. If the current president of the U.S. Government’s executive branch – a man who thinks that U.S. trade deficits hurt America’s economy – understands what SelectUSA does, surely he’ll want to shutter it immediately!
Likewise for the right honorable Wilbur Ross, the current U.S. Secretary of Commerce. Mr. Ross, after all, is on record as insisting that U.S. trade deficits reduce U.S. GDP [5]. And yet Mr. Ross’s own agency is in the business of increasing America’s trade deficit!
Of course, SelectUSA justifies its existence by noting that foreign direct investment in the U.S. is good for America. (Says SelectUSA [6]: “Foreign direct investment [FDI] plays an essential role in ensuring U.S. economic growth and prosperity, creating highly-compensated jobs, spurring innovation, and driving exports.”) SelectUSA is correct about the benefits of foreign direct investment, although when and to the extent that such investment is the product, not of market forces, but of U.S. government interventions, it is no longer obviously beneficial.
We need no government agency to encourage or promote or direct foreign direct investment into the U.S. Such investment, when it is profitable in the U.S., will occur without the help or advice of bureaucrats. So SelectUSA should disappear. Yet for as long as this little tentacle of Uncle Sam exists, let’s not fail to point out its (almost) comical inconsistency with the perennial complaints issued, by politicians of both parties, about the U.S. trade deficit.