Although both Canada and the United States review foreign investment for national security concerns, Canada also requires that the investment be of “net benefit” to Canada. Recent investments by state-owned enterprises (SOEs) and sovereign wealth funds (SWFs) have prompted the suggestion that the United States should also adopt a net benefit or economic test. This Article argues that the United States should not adopt the Canadian approach. The Canadian approach attempts to screen out foreign public entities and requires that they act in a “commercial” manner. This approach is based on two assumptions. First, it assumes that one can segregate the public foreign interest from private and domestic interests. Second, it assumes that one can adequately define what it means to act in a commercial manner. This Article contends that both assumptions are incorrect due to their dependence upon classical categories such as public/private and domestic/foreign that are of limited value in a postmodern, globalized economy. This Article argues that an approach based on addressing specific harms, regardless of identity of the actor, represents a more sustainable approach towards the risks associated with foreign government-controlled entities. This Article suggests that competition law, through its policy-based regulation of harms by economic entities, can form the basis of a new regulatory structure to address concerns, which in retrospect, are about aggregations of power rather than strictly national identity.
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