Statement by Press Secretary Fitzwater on the China National Aero-Technology Import and Export Corporation Divestiture of MAMCO Manufacturing, Incorporated

The President announced his decision today to order the China National Aero-Technology Import and Export Company (CATIC) to divest its interest in MAMCO, Inc., a company located in Seattle, WA, that machines and fabricates metal parts for aircraft.

The President took this action pursuant to a section of the 1988 Trade Act often referred to as the Exon-Florio provision. That provision amended the Defense Production Act of 1950 to give the President the power to suspend or prohibit an acquisition of a U.S. company by a foreign party if the President makes certain findings with respect to that acquisition. The President made the requisite findings in this case. Specifically, based on credible confidential information, the President determined that CATIC's continued control of MAMCO might threaten to impair the national security. Moreover, the President determined that no other provision of law provided him with adequate and appropriate authority to protect the national security in this case.

The United States welcomes foreign direct investment in this country; it provides foreign investors fair, equitable, and nondiscriminatory treatment. This administration is committed to maintaining that policy. There are circumstances in which the United States maintains limited exceptions to such treatment. Generally these exceptions are necessary to protect national security. Of those foreign mergers, acquisitions, and takeovers which have been reviewed under the Exon-Florio provision to determine effects on national security, this is the first time the President invoked Exon-Florio authority. The President's action in this case is in response to circumstances of this particular transaction. It does not change our policy and is not a precedent for the future with regard to direct investment in the United States from the People's Republic of China or any other country.