Foreign Investment Risk Review Modernization Act of 2018

Floor Speech

Mr. Speaker, I rise in strong support of H.R. 5861 and I want to associate myself with the remarks of Chairman Royce of the Foreign Affairs Committee.

This bill deals with two very related issues. One is investment in the United States when that could indeed undermine our national security. So this bill would reform the CFIUS process, the process by which we review taking control of a business enterprise in the United States that may have strategic implications. That part of the bill is the product of the Financial Services Committee.

The second part of the bill reauthorizes and reforms our long-lapsed export control statute.

I would like to commend Representatives Heck, Pittenger, and Barr for their work on the first part of this bill, and commend Chairman Royce and Ranking Member Engel for their leadership on the reform and recodification of the Export Control Reform Act.

This is a bill that deals with our national security as it may relate to business; first focusing on investments, then focusing on the sale of products abroad.

I have served on the two committees of jurisdiction for over 20 years, and have been working on this issue for all of that time.

First, as to the investment or CFIUS portion of the bill, I serve as ranking member of the Asia and the Pacific Subcommittee and know firsthand that Chinese companies are not always driven just by their own company profits. But instead, they are looking at a bigger picture, working with Beijing to advance China's global interests. And all too often, these interests undermine American national security.

Foreign investment in the United States often benefits us. We should encourage and welcome foreign investments that create jobs for American workers. But when a firm absorbs innovative American technology and an innovative American company and then transfers the know-how and the jobs, often to China, we may have a problem.

I am pleased to indicate that the CFIUS portion of this bill has three of my amendments, which are designed to recognize that national security is not just a matter of missiles and warships, but also maintaining our strategic technological edge.

The first of my amendments requires that CFIUS focus on the national security risks of offshoring American jobs. Because when you hollow out the American workforce, when you create a circumstance where Americans no longer have those technical skills, then you undermine our ability to provide for our own national defense.

The second deals with the risk of censorship that arises when foreign companies acquire our companies engaged in entertainment and information, and requires CFIUS to report to Congress on this issue of controlling our entertainment and information industries.

We learned in the 2016 election that hostile foreign countries attempt to influence the American public, so we should study the potential for foreign ownership of media in the United States to influence our political discourse and ultimately our elections and government power.

I would point out that if you control broadcasting, if you control movie screens, if you control mechanisms of distribution, you control what movies and TV shows will be made, and we should not put any hostile foreign power in a position to dictate that we never make another movie about Tibet.

We never want to put ourselves in a position where China controls what we see on our screens, in our entertainment, in our newspapers.

I would point out that China already has control over films being distributed in China. They unjustly limit that through a protectionist quota system and use that to try to force American studios to make movies that are consistent with the objectives of the Chinese Government.

My third amendment focuses on the Made in China 2025 program by acknowledging that supposedly independent Chinese companies are, in fact, required to work with their own government.

Simply put, if you are based in Shanghai, you are going to listen to Beijing, and when the CFIUS process provides heightened scrutiny for government-controlled investment, that should apply to any company in a managed economy that is, in effect, under government supervision and control.

Mr. Speaker, I now move on to the export control portion of this bill, the portion that limits what technology we can sell abroad.

This act has not been amended since 1990. It expired in 2001. It has been held together through a series of temporary executive orders.

This bill provides for export controls that support U.S. foreign policy goals such as complementing economic sanctions, combating terrorism, and prohibiting the export of items that will be used in human rights violations.

I offered, and I am pleased that the committee accepted, one of my amendments that would require the Department of Commerce to look at the significantly negative impacts of controlled exports on our defense industrial base.

When we allow the tools, the dies, the materials for manufacturing to be exported, we, therefore, lose the workforce, lose the capacity, and lose the ability to provide for our own defense.

Mr. Speaker, I urge the support of this important legislation which modernizes CFIUS and our export control laws.

Mr. Speaker, seeing no other speakers on our side from the Foreign Affairs Committee, I would urge my colleagues to vote for this bill.

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