The United States will "escalate efforts" to develop liberalized international rules covering investment comparable to those now in effect governing trade in goods, Treasury Secretary Donald T. Regan said yesterday.
In a speech to the American Chamber of Commerce in London, Regan said that the American initiative will begin on Monday at a two-day ministerial meeting in Paris of the Organization for Economic Cooperation and Development. It also will be a major issue brought to the Paris summit next month when President Reagan meets six other heads of government, Regan said.
Later this year, the U.S. initiative will be presented formally in Geneva to a ministerial meeting of nations signatory to the General Agreeement on Trade and Tariffs. The United States will ask the GATT to review investment practices that distort trade, and to recommend how to deal with them.
Regan said that both large and small countries have been applying increasing protectionist pressures in recent years "aimed at controlling or tipping the benefits of foreign investment in their favor." He cited many "nationalistic" policies, including special incentives to attract investment, or requirements that force the foreign investor to meet either "local content" or employment minimums.
"These practices result in the distortion of trade and investment flows, and the inefficient allocation of resources," Regan said.
He noted that, despite the increasing importance of international investment, "no . . . institutional framework" has arisen comparable to that created for trade by the GATT. Regan said the time has come "for us to mobilize international support to develop multilateral rules for investment akin to GATT rules on trade."
He warned his British audience that the process will be "tedious, complicated and controversial."