In a significant move towards enhanced economic security, U.S. Commerce Secretary Gina Raimondo convened with Japan’s Ken Saito and South Korea’s Ahn Duk-geun on June 26, 2024, to discuss trilateral cooperation in investment screening. This meeting set the stage for a workshop held on September 30, 2024, focusing on aligning their investment screening processes amid growing concerns over foreign investments, particularly from China [52d7a318].
The Biden administration has been proactive in this area, implementing an executive order aimed at restricting outbound investments to China, especially in critical sectors such as advanced semiconductors, quantum computing, and artificial intelligence. However, legislative efforts to establish a statutory requirement for investment screening have faced opposition, notably from Representative Patrick McHenry [52d7a318].
While the U.S. employs the Committee on Foreign Investment in the United States (CFIUS) to manage foreign investments, Japan and South Korea have more stringent reporting requirements for foreign investments. CFIUS operates with a more assertive approach compared to the investment screening processes in Japan and South Korea, which raises questions about the consistency and trust among allies, particularly highlighted by the Nippon Steel-U.S. Steel acquisition controversy [52d7a318].
Key takeaways from these discussions emphasize the necessity for firms to navigate political sensitivities and the importance of establishing clear criteria for national security evaluations. This trilateral cooperation aims to create a more cohesive strategy for managing foreign investments while safeguarding national interests [52d7a318].