UPDATE 1-US committed to open investment climate-Jeffery

LONDON, March 31 (Reuters) - The globally open and competitive climate for investment contributes to economic growth and the United States is committed to promoting such an environment, a senior U.S. state department official said on Monday.

Reuben Jeffery, Under Secretary for Economic, Energy and Agricultural Affairs, said work underway by the IMF and the OECD on sovereign wealth funds and responsible actions by state-owned funds are key so that funds can contribute to the global economy.

"The globally open competitive environment has been a strong contributor to economic growth," Jeffery told a conference in London. Referring to a statement made by President George W. Bush on the United States' commitment on open investment, Jeffery said: "It's not hard to understand the rationale behind it."

The U.S. Treasury Department agreed earlier in March with Abu Dhabi and Singapore on a set of principles for sovereign wealth funds that specifies politics should not influence their decisions.

"The trilateral statement made a contribution to work underway at the IMF. It represents recognition by these funds they can play an important role in creating an atmosphere of trust," Jeffery said.

Jeffery acknowledged that national security issues were a concern with sovereign wealth fund investments, and said new legislation for reviewing investments was confined purely to security issues.

"National security is viewed as a special category and is dealt with separately in a way that attempts to be as precise and narrowly focused on those issues as is possible," Jeffery said in answer to a question.

"Many competing political, economic and policy considerations are at issue. Our country has decided to look at the issue of national security on a stand alone basis."

President Bush last year signed into law the Foreign Investment and National Security Act (FINSA) that revises national security reviews of government investments.

The reviews, which are conducted by the interagency Committee on Foreign Investment in the United States, or CFIUS, seek to address any concerns about political motivations by foreign governments with money to invest.

Bain Capital Partners broke off a deal with China's Huawei Technologies Co Ltd [HWT.UL] to buy U.S. network equipment maker 3Com Corp COMS.O earlier this month due to opposition by CFIUS.

Sovereign wealth funds hold an estimated $2.5 trillion generated by booming commodity and energy exports, and funds from Russia and China have been eyeing overseas companies, prompting concerns in the United States and some European countries.

(Reporting by Natsuko Waki and Carolyn Cohn)