Emergency Committee For American Trade - Publications

SECTION 4: INVESTMENT

Due to global economic integration, the livelihood of more workers in more companies around the globe depends on cross-border trade and investment than ever before. Over the last quarter century, expanding foreign direct investment has become an increasingly important catalyst of global economic integration and new economic growth and opportunity. According to the most recent statistics, global foreign direct investment rose phenomenally in the last three decades, from $14 billion to $735 billion between 1970 and 2001. More recently, however, foreign investment declined from $1.5 trillion in 2000 to $735 billion in 2001due to a slowing down of the global economy. Most of this reduction was in investment flows to the largest recipients, the United States and the European Union.

Foreign investment, both inward and outward, is of substantial importance to the American economy, which is the largest source of and destination for foreign direct investment. It spurs U.S. productivity by promoting research and development, investment in physical capital, and new technology. The payoff is in higher-paying jobs and a higher standard of living in the United States.

Foreign investment in the United States is a major source of U.S. economic growth. The United States remains the largest recipient for foreign investment, receiving $124 billion in foreign investment in 2001 according to statistics of the United Nations Conference on Trade and Development (UNCTAD). This represents a substantial decline, however, from the almost $301 billion in 2000. Foreign investment in the United States promotes U.S. exports, increased employment and productivity. As well, a significant portion of profits is typically reinvested in the United States. It is vital that U.S. trade and international tax policies keep in step with the growing importance of U.S. inward and foreign direct investment in order to support U.S. economic growth and living standards.

UNCTAD reports that annual outflows of U.S. foreign investment equaled close to $113 billion in 2001, which represents a 32-percent decline from 2000 outflows of $165 billion. Overall, 2001 U.S. investment outflows represent a 23-percent increase from 1995 outflows of $92 billion.

According to data compiled by UNCTAD, worldwide, the European Union, the United States, Canada and Japan accounted for 65 percent of investment inflows ($481 billion) and 89 percent of outflows ($553 billion), while developing countries account for 28 percent of inflows ($205 billion) and nearly six percent of outflows ($37 billion) in 2001. Between 2000 and 2001, foreign investment inflows declined by 50 percent to developed countries (by over $700 billion), while they declined less dramatically to the developing countries (by 14 percent or $37 billion).

In its 2001 report on FDI in Least Developed Countries at a Glance, UNCTAD emphasized that increased foreign direct investment is of "particular importance" to achieve sustainable poverty-reducing growth and development in the poorest countries. Strong investor protections in developing countries are also critical to foster the rule of law, to reduce corruption and build institutions, to promote respect for and the protection of private property and contract rights, and to create a regulatory environment hospitable to capital formation in general and international investment in particular. Without these protections, foreign investment will simply not flow to the developing countries that need it most. Several studies have also emphasized the importance of educating the workforce and other ways to develop capacity to promote a greater influx of foreign investment. Foreign investment and investment protections also promote transparency and a market-based free enterprise system.

An UNCTAD study, Bilateral Investment Treaties 1959-1999, documents another important trend in investment: the rapid increase in the number of bilateral investment treaties concluded during the 1990s. In particular, UNCTAD found that the number of treaties almost quintupled during the last decade, rising from 385 at the end of the 1980s to 1,857 at the end of the 1990s. The UNCTAD report also noted that there has been an enormous increase in treaties concluded by developing countries and Central and Eastern European countries, rising from 63 at the end of the 1980s to 833 at the end of 1999. The United States, however, ranks only 26^th in the number of bilateral investment treaties that it had concluded by the end of 1999.

ECAT Studies

In 1998, ECAT released its study, Global Investments, American Returns (GIAR), of U.S. foreign direct investment in the agricultural, manufacturing, and services sector. This study was updated in 1999. Both the original study and the 1999 Update documented some key findings about the impact of foreign investment on the United States and its workers, including:

American companies with global operations make important contributions to the U.S. standard of living that in many cases are greater than those of purely domestic firms. For the last 20 years, American companies with global operations have accounted for over half of U.S. research and development, capital investments, and exports and, thereby, have helped boost overall U.S. productivity.
U.S. foreign direct investment complements economic activity here at home, thereby increasing the U.S. standard of living. Foreign affiliate activity generates purchases from U.S. suppliers, research and development here at home, and trade. Given that the U.S. and foreign activities of American companies tend to complement one another, the ability of these companies to raise the U.S. standard of living depends on their ability to invest abroad. Restrictions on foreign investment, which prevent U.S. companies from expanding abroad, generally reduce U.S. parent activity and, thus, lower the U.S. standard of living.
American companies with global operations depend upon American suppliers and their American workers. For the last two decades, the U.S. parents of American companies with global operations consistently have purchased more than 90 percent of their supplies (or intermediate inputs) from U.S.-based, not foreign, suppliers.

In addition to these key findings, the GIAR study and 1999 Update also documented that American firms with global operations pay higher wages than purely domestic firms. For non-production or white-collar workers the wage difference is nearly 10 percent, and for production or blue-collar workers it is even higher.

In January 2003, ECAT released its latest study entitled, Mainstay IV: Technology, Trade and Investment: The Public Opinion Disconnect. This study, as detailed in more depth in section 1, documents that trade and investment are critical components supporting the growth in productivity and the increase in U.S. living standards that the United States has enjoyed over the last half-decade. This study examines in particular the relationship between trade and investment and the growth in the production and in the use of information and communication technology (ICT) products - products that have together accounted for about two-thirds of the acceleration in U.S. labor productivity over this period. This acceleration has been much celebrated, as labor productivity is the single best measure of a country's overall standard of living. The faster growth rate of recent years implies that U.S. living standards now double in only 28 years - a generation faster than the previous growth rate.

The study examines the role of both ICT-producing and ICT-consuming industries in supporting the acceleration in U.S. productivity. ICT-producing industries have high levels of exports, imports and foreign investment and are much more trade intensive than is the overall U.S. economy. Much of their output entails multiple production stages across multiple countries all linked via trade and investment. Exports are important not just for the U.S. parents, but also for their foreign affiliates. The acceleration in quality improvements and price declines in many ICT products is related to key liberalizations in the WTO and elsewhere, including the 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), the 1997 Information Technology Agreement and the 1997 Basic Telecommunications Agreement.

ICT-consuming industries² -- those industries that use ICT more heavily - are also industries that export more as a share of total output and, for decades, have had higher exports, imports and total trade as a share of total sales. Global production networks have deepened and widened in key ICT industries. Two of the most intensive ICT-using industries - telecommunications and financial services - have benefited from trade and investment liberalization in the WTO and elsewhere, including the 1997 Basic Telecommunications Agreement and the 1997 Financial Services Agreement.

The key conclusion of Mainstay IV is that trade and investment play a critical role in fostering the growth of and the demand for ICT in ways that support increased productivity and economic growth in the United States.

U.S. Negotiating Position on Investment

The United States has led the world in promoting strong investment protections in 45 bilateral investment treaties (BITs) and the NAFTA. These protections are largely based on the rights enshrined in the Takings, Equal Protection and Due Process clauses of the U.S. Constitution and over 200 years of U.S. jurisprudence. In particular, U.S. BITs and Chapter 11 of the NAFTA include the following core commitments:

NO DISCRIMINATION in favor of domestic investors or other foreign investors (the better of national treatment or most favored nation treatment).
TREATMENT IN ACCORDANCE WITH INTERNATIONAL LAW, including fair and equitable treatment and full protection and security.
PROMPT COMPENSATION FOR DIRECT AND INDIRECT EXPROPRIATIONS.
PROTECTION FOR THE MOVEMENT OF CAPITAL, including the repatriation of profits.
NO PERFORMANCE REQUIREMENTS, such as requirements that investors source inputs locally or export finished products.
RESOLUTION OF DISPUTES between investors and governments before objective, impartial arbitral tribunals.

Replicating these basic protections in future trade and investment agreements is essential to promoting continued U.S. investment abroad.

Investment protections were a core issue in the Congressional debate on Trade Promotion Authority (TPA) that was ultimately enacted as part of the Trade Act of 2002 in August 2002. Following passage of TPA, the Administration continued its interagency review of the U.S. negotiating position on investment and made a number of significant changes in the U.S. position, which are now reflected in the Singapore and Chile Free Trade Agreements (FTAs). Discussed below are the Congressional debate on investment as part of TPA, the investment provisions in the recently-concluded Singapore and Chile FTAs, and a brief review of the operation of U.S. BITs and NAFTA Chapter 11, including a summary of noteworthy investment cases.

Investment in the TPA Debate

Investment has been a principal negotiating objective in trade-negotiating authority legislation since 1984. Congress included strong negotiating objectives on investment in the Bipartisan Trade Promotion Authority Act, including all of the core protections discussed above and making several improvements including with respect to transparency and defining protections in terms of U.S. legal principles and practice.

Senator Kerry (D-MA) proposed an amendment that would have revised the negotiating objective in a manner that would weaken protections for expropriation and fair and equitable treatment, create a safe harbor for all but intentionally discriminatory public welfare regulations, and mandate particular negotiating outcomes. ECAT led a business community effort to educate the Senate on the technical details of these investment issues and to explain business community concerns about how this amendment would weaken important investment protections. The Senate rejected this amendment by a vote of 55-to-41. Instead, Congress approved an investment negotiating objective in TPA that sought to ensure high protections for U.S. investors abroad consistent with U.S. legal principles and practice in several important respects. It included the following:

NO DISCRIMINATION in favor of domestic investors or other foreign investors (the better of national treatment or most favored nation treatment).
TREATMENT IN ACCORDANCE WITH INTERNATIONAL LAW, including fair and equitable treatment, consistent with U.S. legal principles and practice, and full protection and security.
PROMPT COMPENSATION FOR DIRECT AND INDIRECT EXPROPRIATIONS, consistent with U.S. legal principles and practice.
PROTECTION FOR THE MOVEMENT OF CAPITAL, including the repatriation of profits.
NO PERFORMANCE REQUIREMENTS, such as requirements that investors source inputs locally or export finished products.
RESOLUTION OF DISPUTES between investors and governments before objective, impartial arbitral tribunals, with improvements to weed out frivolous claims, to improve the selection of arbitrators, and establish an appellate or review mechanism.
THE FULLEST MEASURE OF TRANSPARENCY in disputes between investors and governments.
NO GREATER SUBSTANTIVE RIGHTS with respect to investment protections should be provided to foreign investors in the United States compared to U.S. investors in the United States.

Investment in Singapore and Chile Free Trade Agreements

Following enactment of the Trade Act of 2002, the Administration continued its inter-agency review of the U.S. negotiating position on investment. The Administration put forward several important changes to the U.S. negotiating position that are now reflected in the Singapore and Chile FTAs. In several respects, the Administration made significant improvements - in terms of transparency and the elimination of frivolous claims. The inter-agency group also rejected several troubling proposals (including provisions requiring judicial finality or home government approval of claims or eliminating the protection for fair and equitable treatment or for compensation in cases of indirect expropriations). We are very concerned, however, that in several other respects, the Administration has lowered the standard of protection for U.S. investors abroad. Since foreign investors in the United States already enjoy access to U.S. laws and the U.S. court system, which provides for a wider range of challenges, these changes will not affect foreign investors in the United States or U.S. liability, but will only have a significant adverse impact on U.S. investors abroad.

The primary changes to investment protections incorporated in the Singapore FTA and (based on public summaries) the Chile FTA include the following:

Expropriation: Most significantly, a side letter to the FTAs defines expropriation in terms of "a tangible or intangible property right or property interest in an investment" rather than in terms of investment. This could result in an inappropriate narrowing of the expropriation protections contrary to TPA. In TPA, Congress directed the Administration to define expropriation "consistent with U.S. legal principles and practice," which includes, but is not limited to, the Fifth Amendment takings clause of the U.S. Constitution (which discusses takings in terms of "property"). Furthermore, using the same term ("property") in an international agreement does not make protections consistent, since U.S. definitions of property are generally broader than those in other countries.
The FTAs also define the factors to be considered in cases involving an indirect expropriation:
- The economic impact of the government action, although the fact that an action or series of actions by a Party has an adverse effect on the economic value of an investment, standing alone, does not establish that an indirect expropriation has occurred;
- The extent to which the government action interferes with distinct, reasonable, investment-backed expectations; and
- The character of the government-action.
These factors, drawn from U.S. jurisprudence, are to be applied on a case-by-case basis as part of a fact-based inquiry.
In addition, the FTAs include language that seeks to define when certain public welfare regulations would not be found to violate an investment provision. This language requires an analysis not only of the intention, but also of the application, of the regulation.
Minimum Standard of Treatment: The FTAs require treatment in accordance with the customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security. The FTAs define fair and equitable to include (but not be limited to) procedural due process standards. A side letter to the agreement appropriately clarifies that the minimum standard of treatment of aliens refers to "all customary international law principles that protect the economic rights and interests of aliens."
Capital Controls: Both agreements include a commitment to the free flow of capital, which is critical to attract investment flows. An annex to the investment chapters includes some limitations on an investor's access to dispute settlement with respect to certain claims involving restrictions on the flow of certain types of capital. In particular, the annex provides that with respect to short-term capital other than foreign direct investment, investors must wait one year (rather than six months) to seek arbitration in the event of a capital control. Further, it provides that a government is not liable if a capital control involving short-term flows is in place for less than one year and the capital control does not "substantially impede" a transfer.
Transparency and Procedural Innovations: The FTAs incorporate important new transparency provisions and procedural innovations (including an expedited procedure to eliminate frivolous claims and the potential award of attorney's fees for frivolous pleadings). It provides for a reconsideration of an appellate mechanism and does not, as sought by TPA, provide any current appellate or review mechanism.
Binding Interpretations: The FTAs provide that interpretations of the investment chapter by the Joint Committee (made up of the two governmental parties) shall be binding on an investor-to-state tribunal. Given the July 2001 interpretation of the NAFTA Joint Commission that defined the international law standard as the "minimum standard of treatment of aliens," without public consultation, ECAT is concerned that this type of a provision could be overused. In any event, such interpretations cannot represent an amendment to the underlying agreement, which should properly be an issue for the investor-to-state tribunal to consider.

Operation of U.S. Bilateral Investment Treaties and NAFTA Chapter 11

U.S. BITs and NAFTA Chapter 11 set forth strong investment protections and provide investors with the opportunity to seek review of governmental action before international arbitration panels, such as ICSID.

In recent years, some have raised concern about a number of cases filed pursuant to the provisions of NAFTA Chapter 11. Nevertheless, the number of cases remains quite small (less than 30 since 1994) compared to the $1.7 trillion-dollar-a-day commercial relationship of the three NAFTA countries and the much more numerous cases filed each year on similar types of issues in the domestic court of each of the NAFTA parties. In May 2002, the NAFTA Free Trade Commission directed investment experts from the three countries to continue their work reviewing the implementation of NAFTA Chapter 11.

Even more importantly, none of the cases has reached the type of conclusion that NAFTA's critics have feared. In fact, much of the criticism has focused on cases that have been filed and not even decided. Indeed, in the only two decisions that have been reached in Chapter 11 cases against the United States, the investors' claims have been rejected:

ADF Group Inc. v. United States. A Canadian corporation challenged U.S. law that requires the purchase of domestically-produced steel for certain highway projects. In January 2003, the arbitration panel rejected ADF's claim in its entirety.
Mondev International v. United States. A Canadian corporation challenged the judgments by a court that provided immunity to a U.S. regulatory entity. In October 2002, the arbitration panel rejected Mondev's claim in its entirety.

Two other cases have come under attack as evidence that Chapter 11 provides foreign investors with greater rights than U.S. investors; in fact, neither case has been decided:

Methanex v. United States. Canadian-based Methanex challenged California's ban of the gasoline additive methyhl-butyl ether (MTBE) as expropriatory, discriminatory and violating the minimum standard of treatment under Chapter 11. Contrary to claims that this case represents how the NAFTA rules provide foreign investors with greater rights than U.S. investors, these claims could largely have been brought in U.S. court. Furthermore, in a decision in August 2002, the arbitration panel found preliminarily that Methanex had failed to meet its legal threshold for challenging the U.S. action and provided Methanex an additional period to amend its claim. Methanex subsequently refiled its claim. The bottom line is that there is no decision in this case.
Loewen v. United States. The formerly Canadian-based funeral home company Loewen was challenged in Mississippi court over transactions involving less than $5 million. A jury awarded the U.S. funeral home $500 million in punitive damages. This award was the largest in Mississippi's history and equaled 78 percent of Loewen's net worth. (According to Loewen's pleadings, the $400 million punitive award was 50 times greater than the largest punitive award ever considered by the Mississippi Supreme Court and 200 times greater than the largest award ever upheld by that Court.) Under Mississippi law, Loewen could only appeal this decision if it posted bond equal to 125% of the verdict. While Mississippi law permits a court to reduce or eliminate the bond requirement for "good cause," Loewen's petition for reduction/elimination was rejected. As a result of the onerous and bankrupting bond requirements, which the Mississippi courts failed to reduce, Loewen was effectively prevented from appealing its case in the Mississippi court system. Without an effective ability to appeal, Loewen settled the case for $175 million and brought a claim under NAFTA Chapter 11. No decision has been issued in this case.

Other cases have been wrongly criticized as overturning environmental and other safety laws. In fact, arbitration panels can only award damages and cannot change law. Furthermore, the cases that have been most heavily criticized are ones where the foreign courts found that the foreign governments had acted wrongly:

Ethyl v. Canada. The U.S.-based Ethyl Corporation challenged Canada's legislation banning the importation of a fuel additive, MMT (methylcyclopentadienyl manganese tricarbonyl). The NAFTA panel never issued a decision in this case. Rather, the Government of Canada settled it after it lost a similar case in its own court system brought by Canadian provinces. The court found that Canada's importation ban (while still allowing domestic protection) was not justified as an environmental provision, but was discriminatory and unjustified.
Metalclad v. Mexico. After U.S.-based Metalclad had obtained all necessary federal permits for the construction of a waste disposal facility and several environmental studies demonstrated that the facility would reduce waste in the region and not harm the environment, the local jurisdiction denied Metalclad a municipal construction permit. The governor then issued an Ecological Decree for the protection of cactus in the region. A NAFTA panel and then a Mexican court held that the local government action was not justified for environmental reasons but was politically motivated. Both found that the local government had essentially expropriated Metalclad's investment and ordered the payment of compensation.

ECAT will continue to monitor these cases and others that arise, as well as the full operation of U.S. BITs, NAFTA Chapter 11 and new FTAs containing investment chapters.

ECAT POSITION: ECAT believes that U.S. trade and international tax policies should recognize the vital importance of U.S. foreign direct investment to U.S. economic growth and should promote the expansion of U.S. trade and investment. ECAT supports, therefore, a strong U.S. negotiating position on investment that promotes investment for the benefit of U.S. companies, workers and their families and the U.S. economy. The United States should continue to push for the high standards that have been included in our bilateral investment treaties and NAFTA Chapter 11, including fair and equitable treatment, full protection and security, and compensation for expropriation. The United States should also refrain from weakening existing agreements.

Outlook for a WTO Agreement on Investment

Since 1997, WTO members have been debating the relationship between trade and investment and whether WTO rules on investment should be expanded. The only WTO rules concerning investment are contained in the WTO Agreement on Trade-Related Investment Measures (TRIMs) negotiated during the Uruguay Round. The TRIMs agreement prohibits restrictions on foreign investment, such as domestic content and export performance requirements, but does not set out any general principles -- such as national treatment or the right of establishment--limiting restrictions on foreign investment.

The WTO Working Group on the Relationship Between Trade and Investment established in 1997 has examined the range of existing international instruments governing investment, primarily BITs, as well as the efforts to negotiate a Multilateral Agreement on Investment (MAI) in the OECD. The MAI negotiations, initiated in 1995, were intended to build on existing OECD instruments covering investment to create both a uniform set of high multilateral standards of investor protection and a dispute settlement system covering both governments and individual investors. The proposed MAI contained a broad definition of investment, including enterprises, real estate, portfolio investments, and other financial instruments and intangible assets, and required transparency and the extension of both national treatment and most-favored-nation treatment to investors. MAI negotiations collapsed in October 1998 for a number of reasons, including disagreements with the EU over exemptions for cultural industries.

During the lead up to the Fourth WTO Ministerial Conference, the EU and Japan pushed for negotiations to be launched in Doha on investment. Developing countries were, however, reluctant to agree to negotiations fearing that new investment rules would encroach on their development objectives and compound the burden of compliance with WTO rules.

At the Fourth Ministerial, WTO members did not launch negotiations on investment, but agreed that negotiations on investment "will take place after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that Session on modalities of negotiations." In the meantime, the WTO Working Group will examine and seek to clarify the following issues: scope and definition; transparency; non-discrimination; modalities for pre-establishment commitments based on a GATS-type, positive-list approach; development provisions; exceptions and balance-of-payments safeguards; and consultation and the settlement of disputes between Members. The Declaration emphasized that the negotiating framework should balance the interests of home and host countries and take into account development policies and the right of governments to regulate in the public interest.

Since Doha, several papers have been tabled, which reflect a wide divergence of opinion on everything from the definition of investment to what rules should be covered. The European Union and Japan strongly support an investment agreement, while some developing countries argue that negotiations do not necessarily begin in 2003. Some developing countries (India, China, Pakistan, Cuba and Zimbabwe) have submitted a proposal to place a wide range of conditions on investing companies. The United States has proposed ensuring that at least the issues of transparency and non-discrimination be included in any future agreement. The United States also made a strong proposal that investment should be defined broadly to cover portfolio and direct investment.

In view of the increasing importance of international investment flows, it is important to have a strong set of rules to provide transparent regulation and non-discriminatory treatment of investment, as well as strong protections for investment. The rules should set standards that are at least as high as those in effect under existing bilateral investment treaties and should not, in any event, result in any weakening of the commitments in prior agreements. There remains, however, disagreement, particularly within parts of the developing world, on pursuing a high standards agreement in all areas.

ECAT POSITION: ECAT supports a continuing effort to build a consensus for an international agreement on investment that will provide a high standard of protection for investors which meets or exceeds protections currently provided under U.S. bilateral investment treaties.

OECD Guidelines for Multinational Enterprises

At the June 2000 OECD Council meeting, the 29 OECD member countries and the governments of Argentina, Brazil, Chile and Slovakia adopted a revised set of Guidelines for Multinational Enterprises. These Guidelines, which have been revised periodically since their creation in 1976 as part of the OECD Declaration on International Investment and Multinational Enterprises, represent legally non-binding recommendations from the OECD governments to businesses with the aim of preventing conflict and promoting greater confidence and predictability between businesses and the countries in which they operate.

The revised Guidelines attempt to address many of the concerns raised about the increasing globalization of the world economy. In particular, the Guidelines were revised to include recommendations that companies contribute to the abolition of child labor and all forms of forced or compulsory labor. The recommendations on the environment encourage companies to improve their own environmental performance through a variety of means, including the creation of a system of environmental management and stronger contingency planning. The Guidelines updated the chapter on disclosure to reflect the OECD Principles on Corporate Governance. The Guidelines also incorporated a general policy provision on respecting human rights, as well as new chapters on combating bribery and on consumer protection. The revised recommendations also focused on the need to enhance efforts to implement the Guidelines through the National Contact Points, which have been established in member countries to promote adherence to the guidelines. The Guidelines clarified as well the role of the OECD's Committee On International Investment and Multinational Enterprises, which should continue to provide clarifications of the Guidelines and a forum for their review and implementation.

Antibribery Initiatives

The OECD Convention on Combating Bribery of Foreign Public Officials went into effect in February 1999. As of the beginning of 2002, 33 countries have ratified the convention (including the United States, which ratified the Convention in December 1998). The Convention was adopted to require OECD member countries to criminalize bribery of public officials during business transactions. It is based on the U.S. Foreign Corrupt Practices Act that prohibits bribery of foreign public officials and political candidates. The United States would like to expand the coverage of the OECD Convention to include bribery of foreign political parties, party officials, and candidates for political office. It is also important that the United States continue to monitor OECD country implementation of the Convention to ensure that it is effectively enforced.

In September 2000, the United States ratified the Inter-American Convention on Corruption and continues to encourage greater regional anti-corruption efforts. In 2000, the United States also linked benefits under the African Growth and Opportunity Act and the Caribbean Basin Trade Partnership Act (described in section 9) to these countries' efforts to combat bribery.

The United States is also continuing its anti-corruption efforts by working with the World Bank to improve anti-fraud and anti-corruption efforts in the administration of World Bank contracts. Anti-corruption provisions were added as a negotiating objective to TPA for the first time ever, as enacted in the Trade Act of 2002. The Administration is also continuing its effort to move forward with an Agreement on Transparency in Government Procurement in the WTO, as discussed in section 2.

ECAT POSITION: ECAT supports U.S. efforts to ensure that the OECD Convention on Combating Bribery of Foreign Public Officials and the Inter-American Convention on Corruption are effectively implemented and to combat the problem of foreign corruption through other international efforts.

¹ ICT-producing industries produce the hardware, software and services - computers, semiconductors, electronics, and information services to name just a few - involved in collecting, processing and sharing information.
² These industries, such as telecommunications and financial services, invest heavily in ICT products and services.