Statement of Administration Policy: S. 479 - National Cooperative Research Extension Act of 1991

(Senate)
(Leahy (D) Vermont and 12 others)

S. 479 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 discriminatory conditions that serve no antitrust purpose have been added to S. 479, the Attorney General, the Secretary of Commerce, the Secretary of the Treasury, the 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.

The Administration would not object to enactment of S. 479 if it were amended as proposed by Senator Brown because this amendment effectively eliminates discrimination. However, any amendment which continues to impose requirements with discriminatory effects would not cure the defects in the bill.

As currently drafted, the bill would condition equal treatment under the antitrust laws upon (1) location of principal joint venture production facilities in the United States; and (2) demonstration of a "substantial commitment" to the U.S. economy by each party to the joint venture. 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 lack of a U.S. manufacturing presence or sufficient "commitment to the U.S. economy." Such a policy would be unfair and contrary to the way our 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.
  
  
• Conflict sharply 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 in areas where cooperation could be most helpful — for example, areas in which foreign firms currently may have access to technology unavailable to U.S. firms, yet may not have a sufficient manufacturing presence in or "commitment" to the U.S. economy.

The Brown amendment is an acceptable alternative to the objectionable provisions of S. 479.