The telecommunications legislation now moving through Congress, for example, would lift ownership restrictions on telecommunications licenses only for those companies from countries determined by the FCC and the Clinton administration to offer equivalent market opportunities for U.S. companies. Unfortunately, other than a simple analysis of the fairness issue, there has been little critical analysis of the reciprocity movement in the area of foreign ownership restrictions. Clearly, barriers to transnational investing exist. As the world's largest source of foreign direct investment, the United States also has much to gain from the elimination of these barriers. But the choice of tactics is critical.
Foreign investment plays a key role, for example in upgrading and diversifying the technology base.
Governments that discourage inward FDI in these areas under the guise of opening markets abroad thus do so at their own expense. What goes around, as a result, can easily come around, with American-owned multinational corporations being the losers if other countries respond with new investment barriers of their own. The hazard of being a leader is that others follow you. U.S. antidumping laws provide an unfortunate case in point. What seemed to work in the short run has instead reduced both corporate flexibility and the efficiency of the global economy.