Treasury chief vows to bolster security reviews

WASHINGTON -- The Bush administration, reeling from a ruckus over ports security, will work with Congress to bolster national security reviews of foreign companies and others that want to invest in the United States, Treasury Secretary John Snow said yesterday.

Snow emphasized the importance of maintaining a climate that still encourages foreign investment in this country, but suggested that security procedures warranted closer scrutiny in a world changed by the Sept. 11, 2001, terrorist attacks on the United States.

''As we enter into the debate over its reform one point must stand clear: National security is our top priority," Snow said.

Congress is considering various measures to revamp the way the federal government reviews foreign proposals to do business in the United States, like Dubai Ports World's proposal to oversee significant operations at six major US ports.

The ports deal had been approved by the Committee on Foreign Investment in the United States, or CFIUS, a panel headed by the Treasury Department. But the Dubai-owned company later pulled out of the deal in the face of massive political protests over the transaction, and said it would transfer the port operations to a US company.

The administration will work to ''strengthen scrutiny of CFIUS cases involving state-owned companies" and ''strengthen the president's authority to enforce CFIUS actions," Snow said.

The Treasury chief also said the administration would make sure that lawmakers in Congress are in the loop.

''We will work to . . . expand notifications of decisions to Congress so that it can fulfill its important oversight responsibilities," Snow said.

Snow said it is of utmost importance that policy makers, concerned about national security, not take action that would discourage foreigners from investing in the United States.

''It is vital that we avoid taking steps in the name of national security that instead are isolationist, having the effect of choking off vital investments in America," he said. ''For example, some have called for automatic investigation of any investment that could affect 'economic security.' That's a very vague concept and would create uncertainty, which could chill investment."

Direct investment -- for instance, when a foreign company buys a US company or builds its own factory or facility in this country -- can bring benefits to the United States, he contended.

''Direct investment from overseas can bring in new research, technology, techniques, and skills," Snow said. ''And of course it contributes to US, state, and local tax revenues. This kind of trade and investment are good for America and good for its workers."

Snow said 5.3 million US workers are directly employed by US affiliates of international companies.

It is also important to US companies to be able sell their goods and services abroad and to increase their opportunities to do business in other countries.

''After all, 95 percent of the global market lives outside the US," Snow said. ''We need to keep our doors open or risk having the doors of the world closed to us."