US FDI in the Baltic Sea region: The state of American investment and selected challenges.
Authored by Kalman Kalotay.
This report reviews the patterns of United States foreign direct investment (FDI) in the Baltic Sea region and selected related key policy issues. American investment in the region has not lived up its potential, and has been on a downward trend, in contrast to a good potential for its expansion found in some studies. Moreover, US FDI is unevenly distributed, with Germany attracting the bulk of it, related to its large market and technology assets. The report indicates the adverse effects of the current protectionist trends in the world economy on American investment in the region, especially in relatively smaller and more open economies. It also show that the abandoning of negotiations on the Transatlantic Trade and Investment Partnership can have long-term negative repercussions for bilateral investment flows, and the sanctions wars between the United States and the Russian Federation has created further obstacles to US investment to the region. While focus has been mostly on medium to long-term issues, the report also analyses the one-off shock of the US tax reform in 2018, predicting a recovery of flows in 2019 and beyond.
The article is written by Kalman Kalotay, working for the United Nations Conference on Trade and Development (UNCTAD), Geneva, Switzerland.
