The Federal government should take "major and corrective action" to improve its monitoring of direct foreign investment in the U.S., according to a House report released today.
The national interests of the United States are dangerously vulnerable to rapidly increasing direct foreign investments in business and property concluded the study, put out by Congressman Jack Brooks (D-Tex.), chairman of the House Government Operations Committee.
The report, prepared by the Commerce, Consumer and Monetary Subcommittees, was the result of a two-year investigation and a series of hearings. Subcommittee Chairman Benjamin S. Rosenthal (D-N.Y.), said increased foreign investment in this country constitutes "more than a threat to our economy. It may well jeopardize our self-sufficiency and security."
The study criticizes the Federal government for inadequate efforts to report and evaluate foreign investments here. It says that "federal estimates of the total amount of foreign direct investments constitutes more than guess work."
The few existing Federal statutory restrictions on foreign investments in specific industry sectors . . . are piecemeal, haphazard and illogical," the report states.
More regulation of foreign investment would not deter desirable investment, the report says. Foreign investors from Europe are used to more regulation and most other countries "require registration and prior approval of foreign investment, and many place conditions on potentially harmful investments to extract substantial benefits to their economies."
The Commerce Department should establish a permanent registration system to identify all past and future direct foreign investments in U.S. business and property, excluding farmland, the report recommends.
No other major industrialized country is as ignorant about the size, origin and impact of foreign investments as the U.S., the study says. It also reports that the Treasury Department is carrying out secret agreements between the U.S., and Saudi Arabia and Kuwait, which prevents disclosure of Middle East oil exporters' investment country by country.