Abstract

Over the past several years, considerable controversy has developed as to whether the growth of multinational corporations is beneficial to interests of the United States. Critics assert that the direct investment abroad by the United States based multinationals has caused the lessening of American jobs, a giving away of technology and a worsening of the balance of payments. This controversy was brought to the fore in Congress in 1972 with the introduction of the Foreign Trade and Investment Act, more commonly known as the Burke-Hartke Bill. The major objective of the bill is to restrict the pell mell rush of companies to go abroad for profits while weakening production of the U.S., tax base, job market and standard of living. To achieve this objective, the bill proposes to limit imports, regulate the outflow of capital and technology, increase taxes on foreign earnings and expedite relief for industries overtly or covertly damaged by imports. In short, it attempts to drop the curtain on an era of free trade. There is little doubt that the enactment of this legislation would severely restrict, perhaps end, the foreign operations of the United States based multinational corporations.