Suchergebnisse

More than ever before, foreign companies have been making themselves at home in U.S. markets. The rapid growth of foreign direct investment in the United States reflects the emergence of highly competitive firms based abroad and is thus linked to the loss of U.S. international competitiveness in trade. Two-way flows of direct investment have blurred the distinction, at least among industrial nations, between host and source countries. While the United States remains a major source country as well as the strongest voice for international action to regulate national investment policies, it has also become the world's most important host to direct investment, with all the domestic political pressures entailed. A key policy question for the 1990s is whether the United States will continue its leadership role in combating investment policies that achieve nationalistic objectives at the expense of global efficiency, or join other host countries in adopting its own nationalistic policies.

THE RAPID GROWTH OF DIRECT FOREIGN INVESTMENT IN THE UNITED STATES REFLECTS THE EMERGENCE OF HIGHLY COMPETITIVE FIRMS BASED ABROAD AND THUS IS LINKED TO THE LOSS OF U.S. INTERNATIONAL COMPETITIVENESS IN TRADE. TWO-WAY FLOWS OF DIRECT INVESTMENT HAVE BLURRED THE DISTINCTION, AT LEAST AMONG INDUSTRIAL NATIONS, BETWEEN HOST AND SOURCE COUNTRIES. WHILE THE UNITED STATES REMAINS A MAJOR SOURCE COUNTRY AS WELL AS THE STRONGEST VOICE FOR INTERNATIONAL ACTION TO REGULATE NATIONAL INVESTMENT POLICIES, IT HAS ALSO BECOME THE WORLD'S MOST IMPORTANT HOST TO DIRECT INVESTMENT, WHICH ENTAILS CONSIDERABLE DOMESTIC POLITICAL PRESSURES. A KEY POLICY QUESTION FOR THE 1990'S IS WHETHER THE USA WILL CONTINUE ITS LEADERSHIP ROLE IN COMBATING INVESTMENT POLICIES THAT ACHIEVE NATIONALISTIC OBJECTIVES AT THE EXPENSE OF GLOBAL EFFICIENCY, OR JOIN OTHER HOST COUNTRIES IN ADOPTING ITS OWN NATIONALISTIC POLICIES.

The United States has proposed a new approach to the problems of developing nations that reserves aid for the very poorest countries and stresses the role of free markets in stimulating Southern growth through expanded trade and private investment. Because the new policy rests upon opportunities for mutual gain, it may enjoy greater support in the North than past proposals to aid poor nations. However, expansion of North-South trade is central to the prospects for market-guided development. The new approach can succeed only if the United States and other Northern nations can adjust their own industrial structures to accommodate a new global division of labor.