For Sale: America

(9 of 11)

The fact is that U.S. antitrust law, however leniently enforced under the probusiness Reagan Administration, can prevent any foreign monopoly abuse. Indeed, antimonopoly laws are liable to be used more readily against foreign companies than domestic ones. The U.S. already has laws that restrict foreign ownership in any industries that the Federal Government deems essential or sensitive. Among them: telecommunications, shipping, aviation and any form of defense production that requires a U.S. security clearance.

The Reagan Administration tried to draw a new line last March, when it stunned the Japanese electronics giant Fujitsu by blocking a reported bid of $225 million for money-losing Fairchild Semiconductor, a maker of computer microchips. Washington cited national security concerns for the ban -- even though Fairchild was already owned by a foreign firm, the French oilfield- services company Schlumberger. (Last week Fairchild finally found a U.S. purchaser when a neighbor in Silicon Valley, National Semiconductor, bought the company for a meager $122 million.) The noisy Fujitsu episode may have proved a costly one for the U.S., according to Federal Reserve Chairman Alan Greenspan. The U.S. central banker told the Wall Street Journal that the incident rattled foreign investors, who reacted by cutting back their holdings of U.S. dollars. That sent the value of the greenback plunging. For a brief time, domestic interest rates moved sharply upward in a bid to force the dollar's value up again.

Even without further moments of monetary turbulence, the U.S. Congress seems bound to look more closely at the foreign buyout wave as it continues to swell. Some Washington legislators argue that the U.S. should at least develop a more vigilant system to monitor foreign inroads. The trade bill that passed the House in April includes a provision that would require foreign investors to report to the Commerce Department any interests of 5% or more in U.S. corporations or real estate. But many foreign investors oppose such scrutiny as trade harassment and a possible first step toward expropriation of their assets. Says a senior Administration official: "An investor might think that these requirements mean the U.S. Government will be coming after him." The Senate has passed a scrutineering provision in its version of the trade bill, but the White House is trying to scale back the dual proposals.

Indeed, most economists and politicians appear to come down against any major interference with the investment spree. Writing in the Washington Post last week, Economists Martin and Kathleen Feldstein (he is the former chairman of the President's Council of Economic Advisers) flatly stated, "The occasional rumblings about restricting foreign investment, such as the idea of requiring official registration, should be resisted by legislators and advisers to presidential candidates alike."