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COMPTROLLER GENERAL OF THE UNITED SrATES 030
- WASHINGTON D C A054
B-172253 SEPTEMBER 6, 1979
T1he Honorable Benjamin S. Rosenthal
Chairman, Subcommittee on Commerce, . I
Consumer, and Monetary Affairs
Committee on Government Operations 110300
House of Representatives
Dear Mr. Chairman:
Sub]ect: Should Canada's screening practices for T
foreign investment be used by the United
States'; (ID-79-45)
This letter addresses questions you requested that GAO
answer concerning bCanada's Foreign Investment Review Agency7
(FIRA), as stated in your letter of March 8, 1979, and
modified in subsequent discussions with your office. Your
questions were intended to obtain information in considering
whether FIRA's screening practices should be used by the
United States.
Enclosure I provides an overview of why FIRA was estab-
lished and how it works to screen incoming foreign investment.
Enclosure II addresses your specific questions
We do not see the need at this time for establishing
a foreign investment screening agency in the United States.
Our reasons are explained in our answer to question 7,
enclosure II.
From 1974 to 1978, total foreign direct investment in the
United States increased from $26 billion to almost $40 billion.
Because of the rapid increase, public concerns in specific
geographic or economic sectors were expressed and legisla-
tion was enacted to monitor and evaluate the effects of
foreign investments.
In a series of hearings, your Subcommittee has identi-
fied the need for improved data to assess the effects of
foreign direct investment. The scope of our work did not
include evaluating the adequacy of current efforts to monitor
and evaluate the effects of foreign investment. However,
we do not believe that the problems identified to date
warrant establishing a foreign investment screening agency
in the United States. Instead, the (1) effective implemen-
tation of existing legislation, (2) effective functioning
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