WASHINGTON – Nancy McLernon, president and CEO of the Organization for International Investment (OFII), issued the following statement in response to the conclusion of the Trans-Pacific Partnership (TPP) negotiations:
“Given that nearly 20 percent of America’s foreign direct investment (FDI) flows from TPP countries, there is no doubt that today’s announcement is an important economic milestone. Our analysis shows that TPP has the potential to unleash $20 billion in new global investment and create 233,000 FDI-related U.S. jobs. As we review the details of the negotiated agreement, I am hopeful that TPP will help America regain its global competitiveness.”
According to a recent report from OFII, once fully implemented, TPP will increase the stock of FDI in the U.S. economy by an estimated $20 billion. The study also finds that the employment contribution of insourcing companies will increase by 233,000 U.S. workers, with the largest contribution occurring in the manufacturing sector.
Insourcing companies currently employ 5.8 million workers in the United States and pay wages that are 33 percent higher than the national average, according to government data. They also directly employ more than 18 percent of workers in the manufacturing industry, produce 21 percent of U.S. exports, pay 16 percent of federal corporate taxes and support 15 percent of private-sector R&D activity.
While the United States is the world’s largest recipient of FDI flows, its share of worldwide FDI has decreased precipitously in the past decade. In 2000, the United States received 37 percent of worldwide FDI stock. By 2013, that percentage had fallen to only 19 percent. In 2014, China was the largest recipient of FDI, pushing the United States to the third position, behind China and Hong Kong, according to United Nations’ Conference on Trade and Development.