Foreign Investment, National Security Need Balanced Approach.

• Author: Horowitz, Raanan
• Position: Industry Perspective

The United States is being pulled in opposing directions by competing imperatives to encourage foreign investment and to protect national security.

On one hand, the administration's proclamation that "America is open for business" signals an awareness of the continued importance of foreign investment for economic growth and innovation. At the same time, the government is actively reforming national security review of foreign investments, with significant legislation passed in the current session of Congress.

We must find an appropriate balance between these goals. That balance will allow the United States to leverage innovation and technological developments of trusted allies and partners, while properly screening and mitigating adverse foreign activity.

The United States' industrial base policy can support both national security and foreign investment. The policy must focus on promoting investments and exchange of technology with key trusted allies and partners, while prioritizing the way we approach security concerns associated with foreign investments.

A balanced approach is consistent with key tenets of the National Security Strategy and the National Defense Strategy, which explain the importance of alliances and partnerships in protecting our national interests and creating opportunities for reciprocal benefits for the United States.

Currently, the dialogue is heavily focused on the risk side of the calculus, and the potential vulnerabilities associated with investment that our adversaries may exploit. The opportunity side of the discussion--that is, trusted alliances and partnerships--must play an equally important role.

Different risks emerge from over-correction by focusing solely on vulnerabilities. If the U.S. market is effectively closed off to foreign involvement or investment in certain sectors, the defense industrial base may develop critical gaps, and foreign expertise and knowhow may enter the private sector without the benefit of any transparency.

The nation can balance legitimate national security concerns and remain open to innovation-boosting investment. National security review procedures should acknowledge the differences between potential adversaries that require greater scrutiny and trusted allies that frequently collaborate

with the United States. Thoughtful reforms can accomplish U.S. national security and defense objectives while supporting secure, innovative technology delivery to the U.S. warfighter.

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