Comments on H. Res. 59

Analyses of the effects of foreign direct investment in the United States are necessary to keep the public adequately informed about foreign investment activity and to provide Congress and the Administration with adequate information to determine whether there are problems that need to be addressed. Foreign direct investment in the United States has more than tripled in the 1970's and is equal to about 25 percent of U.S. direct investment abroad. This figure is lower than the actual investment outlays of foreign firms to the extent that such investments were financed through borrowings in the U.S. capital market. The types of foreign investments in the United States are limited somewhat by current Federal laws which restrict foreign investment in such areas as aviation, shipping, atomic energy, radio and television broadcasting, and mineral development on Federal lands. The interagency Committee on Foreign Investment in the United States was established to oversee monitoring of the effects of foreign investment and to coordinate the implementation of U.S. policy for such investment. Very little has been done by the Committee to meet its responsibilities. Primary data collection relating to international investment flows is the responsibility of the Department of Commerce. It gathers data as an element of the U.S. balance of payments and collects financial and operating data on U.S. affiliates of foreign firms. The office established in Commerce to collect this data has published little analytic work since 1976 and has not systematically collected studies by the private sector on foreign direct investment. The level of interest in studying foreign investment evidenced by House Resolution 59 is warranted. A unified reporting effort that utilizes the databases and collection capabilities of the executive branch departments and the Securities and Exchange Commission might be more useful than separate reports. Congress might consider expanding its guidance concerning the range of issues to be addressed to include such issues as borrowing patterns, the rate of technological change, trade patterns, management practices, labor relations, and costs and benefits of incentives designed to encourage foreign investment. Studies related to these issues should be expected to be complex and require a substantial investment of time and resources. The quality of some of these efforts should not be constrained by a 90-day time limit.