Statement of Administration Policy: H.R. 4611 - National Cooperative Production Amendments

(House)
(Brooks (D) Texas and 10 others)

The Administration supports extending the coverage of the National Cooperative Research Act of 1984 (NCRA) to joint production ventures. The Administration supports House passage of H.R. 4611 and will seek changes in the Senate to make this legislation consistent with an Administration proposal recently transmitted to Congress.

H.R. 4611 contains a provision which would afford less favorable treatment under the antitrust laws to firms with significant foreign ownership than to domestic companies. This discrimination appears inconsistent with principles embodied in bilateral investment agreements and other accords. It would also undermine efforts to obtain nondiscriminatory treatment of U. S. firms in foreign-based consortia. In addition, the provision is contrary to U.S. objectives in the Uruguay Round negotiations concerning trade-related investment measures. Accordingly, the Administration strongly urges the deletion of this provision from H.R. 4611.

The Administration also urges deletion of the provision in H.R. 4611 requiring all joint venture facilities to be located in the United States. Like the foreign ownership restriction, this provision would impair the efficiency-enhancing objectives of the legislation. It is also contrary to U. S. investment policy because it would limit and distort investment options — including those available to U.S. companies.

The Administration will also propose a technical amendment in the Senate to ensure proper consideration of foreign competition in the review of the legality of joint ventures.