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Kimmitt Speaks At US-GCC Investment Forum In Bahrain

by Mike Godfrey,, Washington

05 December 2007

US Treasury Deputy Secretary, Robert Kimmitt, on Tuesday spoke at the US-GCC Investment Forum in Bahrain.

Mr. Kimmitt began by speaking about the government's plans to increase investment activity between the GCC and the United States:

"Our strategy has three components: (1) improve our internal processes and reaffirm our open investment policy, (2) work with Congress on CFIUS reform legislation to rebuild faith in and strengthen the national security review process, while remaining open to foreign investment, and (3) engage bilaterally, regionally, and multilaterally with our international partners to stress the importance of opening markets to investment opportunities," he stated.

Kimmitt continued:

"I bring this message to you because 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," he stated."

"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 percent increase. Granted, we started from a relatively small base, but this increase significantly exceeds the 45 percent increase in US FDI to all other destinations," he announced.

Mr. Kimmitt then went on to talk about the importance of open economies, explaining that:

"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 totaled 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."

Kimmitt ended by announcing that: "In conclusion, let me reiterate that one cannot overstate the importance of open investment policies for the health of the global economy and our respective economies."

"The Gulf region is a key part of our open investment commitment. As a result, you can count on us to remain vigilant against protectionist pressures that could threaten global economic growth and prosperity. However, the United States cannot fight this battle on its own. Each country, including in this region, needs to take a careful look at its own investment policies as well as its contribution to global efforts to promote greater openness and resist protectionism. We know we count on your active support in this regard."

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