Statement of Administration Policy: H.R. 1604 - National Cooperative Production Amendments of 1991

(SENT 9/29/92)
(House)
(Brooks (D) Texas and 3 others)

H.R. 1604 would extend the antitrust treatment now applicable to joint research and development ventures under the National Cooperative Research Act (NCRA) to joint production ventures which are often pro-competitive and efficient. This extension of NCRA treatment would remove unwarranted antitrust uncertainty from such ventures.

However, because of discriminatory conditions in H.R. 1604 that serve no antitrust purpose, the Attorney General, the Secretary of Commerce, the Secretary of the Treasury, the Acting Secretary of State, and the United States Trade Representative would recommend that the bill be vetoed if presented to the President in its current form or in the form of an alternative that does not satisfactorily address the objections presented below.

The Administration urges the House to pass S. 479 as passed by the Senate by a vote of 96-1 on February 27, 1992. S. 479 contains all of the beneficial provisions of H.R. 1604 and omits the objectionable provisions.

H.R. 1604 would deny NCRA coverage to joint ventures with more than 30 percent foreign ownership or whose facilities are not entirely located in the United States or its territories. These conditions would:

• change fundamentally the nature of antitrust law by imposing additional sanctions on certain joint ventures for no antitrust reason. Instead, treble damages would be assessed for having a non-U.S. manufacturing facility or greater than 30 percent foreign ownership. Such a policy would be unfair and contrary to the way U.S. antitrust laws have historically been applied.
  
  
• Undermine the legislation's basic purpose of reducing antitrust uncertainty by inviting extensive litigation over the meaning and application of the conditions.
  
  
• Be inconsistent with U.S. national treatment obligations under our Bilateral Investment Treaties; treaties of Friendship, Commerce and Navigation; and other international agreements. They would also sharply conflict with the joint efforts of the President and the Congress to open up markets to trade and investment without conditions or performance requirements, and could provoke similar differential treatment of U.S. firms abroad.
  
  
• Undermine the expected benefits of the legislation by limiting and distorting companies' investment and partnership options. American companies would be deterred from participating in promising ventures where cooperation could be most helpful — for example, when an essential technology may be available only through a foreign partner or in conjunction with a venture having some operations outside the United States.