1 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 9633 (statement of Prime Minister Brian Mulroney, Oct. 5, 1987, announcing the conclusion on the day before of a free trade agreement between Canada and the United States).

2 Free Trade Agreement, Dec. 22, 1987, and Jan. 2, 1988, Canada–United States, H.R. Doc. No. 216, 100th Cong., 2d Sess. 297 (1988), reprinted in 27 ILM 281 (1988) [hereinafter FTA].

3 Information Canada, Foreign Direct Investment in Canada (1972).

4 Such antiforeign ownership feelings were bound to be directed at the United States, the most important country of origin of FDI in Canada. See Atkey, A Canadian Perspective on the Investment Implications of the Free Trade Agreement, in National Institute, United States/ Canada Free Trade Agreement: The Economic and Legal Implications 15,17 (1988) [hereinafter National Institute].

5 Foreign Investment Review Act, 1973–74 Can. Stat., ch. 46, amended by 1976–77 Can. Stat., ch. 52, §128(2), and 1980–81–82 Can. Stat., ch. 107, §63 [hereinafter FIRA], repealed by Investment Canada Act, 1984–85 Can. Stat., ch. 15.

6 If it was demonstrated that the investment would be of “significant benefit” to Canada, it would be allowed under FIRA. Of the applications on which a decision was taken from 1974 to 1984, more than 90% were positive. See Dewhirst, The Canadian Federal Government’s Policy Towards Foreign Direct Investment, in Regulation of Foreign Direct Investment in Canada and in the United States 23, 27 (Fry, E. & Radebaugh, L. eds. 1984)Google Scholar [hereinafter Regulation of FDI]; Baker, From FIRA to Investment Canada, in Canada-U.S. Economic Relations in the Conservative Era of Mulroney And Reagan 47, 48–49 (Fry, E. & Radebaugh, L. eds. 1985)Google Scholar.

7 Investment Canada Act, 1985 R.S.C., ch. 20 [hereinafter ICA]. For a detailed review of the ICA, see, inter alia, R. Patterson, Canadian Regulation of International Trade and Investment (1986); Grover, The Investment Canada Act, 10 Can. Bus. L.J. 475 (1985); Rose, Foreign Investment in Canada: The New Investment Canada Act, 20 Int’l Law. 19 (1986); Spence, Current Approaches to Foreign Investment Review in Canada, 31 McGill L.J. 509 (1986); Grover, Colloquy: Canada-U.S. Trade Relations and Negotiations (Part 2), in 1987 Private Investors Abroad—Problems and Solutions in International Business, at 2–1.

8 Quoted in Spence, Current Approaches to Foreign Investment Review in Canada, 11 Can.–U.S. L.J. 161 (1986).

9 ICA, supra note 7, §2. This stands in sharp contrast to §2(1) of FIRA, supra note 5, which stated in part “that the extent to which control of the Canadian industry, trade and commerce has become acquired by persons other than Canadians and the effect thereof on the ability of Canadians to maintain effective control over their economic environment is a matter of national concern.”

10 Non-Canadians are persons other than Canadians or Canadian-controlled entities; the ICA, supra note 7, contains, in §§26 and 27, an extensive set of rules by which the status of the acquirer can be determined.

11 “Canadian business” is defined in id. §3, which shows that the ICA is not concerned solely with corporate takeovers, and that the identity of the person carrying on the business is irrelevant.

12 Id. §§14(l)(a) and (b), 14(3) and 28(1).

13 Id. §§14(l)(d), 14(4) and 28(l)(d)(ii).

14 Id. §§14(l)(c), 14(2), 14(3) and 28(l)(d)(ii).

15 See, e.g., Issues in United States–Canada Economic Relations: Hearings Before the Subcomm. on International Economic Policy and Trade and on Inter-American Affairs of the House Comm. on Foreign Affairs, 97th Cong., 1st Sess. 11 (1981) (statement of R.J. Waldmann, Assistant Secretary of Commerce); O’Laughlin, Extraterritorial Application of Canadian Foreign Investment Review, 8 Nw. J. Int’l L. & Bus. 436 (1987); Bale, Investment Frictions and Opportunities in Bilateral Trade Relations, in Canada/United States Trade and Investment Issues 165, 175–76 (Fretz, D. et al. eds. 1985)Google Scholar [hereinafter Canada/U.S. Trade].

16 ICA, supra note 7, § 14(3)(b).

17 Id. § 15(a).

18 Investment Canada Regulations, SOR/DORS/85–611, sched. IV, 119 Can. Gaz. II 3027, 3032–33 (1985), amended (on other topics) by SOR/DORS/89–69, 123 Can. Gaz. II 130 (1989).

19 ICA, supra note 7, §21.

20 Atkey, supra note 4, at 25.

21 ICA, supra note 7, §23.

22 Spence, supra note 7, at 518.

23 Dewhirst & Rudiak, From Investment Screening to Investment Development, 11 Can.-U.S. L.J. 149, 159(1986).

24 Spence, supra note 7, at 520–21.

25 Arnett, From FIRA to Investment Canada, 24 Alb. L. Rev. 1, 26 (1985).

26 These policies will be described in detail in parts III and IV infra.

27 Wall St. J., Nov. 6, 1987, at 16.

28 Address by Marcel Masse, Minister of Energy, Mines and Resources, to the American Stock Exchange, Eighth Annual Oil and Gas Symposium, Toronto (Nov. 5, 1987).

29 See Western Grain Stabilization Act, 1985 R.S.C., ch. W–7, §7; Aeronautics Act, 1985 R.S.C., ch. F–2, §26; Broadcasting Act, 1985 R.S.C., ch. B–11 (the requirements of the Act as to 80% minimum Canadian ownership were also deemed to be applicable to cable television in Capital Cities Communication Inc. v. C.R.T.C, [1978] 2 S.R.C. 14); Fisheries Act, 1985 R.S.C., ch. F–14; Territorial Lands Act, 1985 R.S.C., ch. F–7; Canadian Petroleum Resources Act, 1986 Can. Stat., ch. 45, §§46–49; and Canada Shipping Act, 1985 R.S.C., ch. S–9.

30 International Investment Policy Statement, 19 Weekly Comp. Pres. Doc. 1214 (Sept. 9, 1983).

31 Bale, The United States Policy Toward Inward Foreign Direct Investment, 18 Vand. J. Transnat’l L . 199,206(1985).

32 25 Weekly Comp. Pres. Doc. 221 (Feb. 13, 1989).

33 It is not the purpose of this article to review these restrictions and requirements in detail. For a review of the various statutes dealing with FDI in the United States, see, inter alia, Foreign Investment in the United States (Marans, E., Williams, P., Griffin, J. & Pattison, J. eds. 1980)Google Scholar; Barrett, Existing Legal Restrictions on Foreign Investment in Specific Industries, in National Institute, Foreign Direct Investment in The United States 21 (1988) [hereinafter FDI in the U.S.]; Vila, Legal Aspects of Foreign Direct Investment in the United States, 16 Int’l LAW. 1 (1982); Fisher, Canadian Investment in the United States: U.S. Restrictions on Foreign Investment, 8 Can.-U.S. L.J. 19 (1984); Walsh & Weinstein, Foreign Investment in the U.S. Fishery Industry After the Anti–Reflagging Act of 1987, 22 Int’l Law. 1207 (1988); Patterson, N., Canada– U.S. Foreign Investment Regulation: Transparency Versus Diffusion, in Regulation of FDI, supra note 6, at 47Google Scholar; Disclosure of Foreign Investment in the United States: Hearings Before the Subcomm. on Telecommunications, Consumer Protection and Finance of the House Comm. on Energy and Commerce, 99th Cong., 2d Sess. 172(1986) (statement of Michael Butler, Chairman of the ABA Committee on Foreign Investment in the United States) [hereinafter House Hearings]; Bale, The U.S. Federal Government’s Policy Towards Foreign Direct Investment, in Regulation of FDI, supra note 6, at 29; H.R. Rep. No. 1216,96th Cong., 2d Sess. (1980); Butler, The U.S. Policy Toward Foreign Investment in the United States and Recent Developments Affecting Foreign Investments, in FDI in the U.S., supra, at 3.

34 Foreign Investment Review Agency, Barriers to Foreign Investment in the United States 71 (1982); see also to the same effect D’Aquino, A Canada–United States Free Trade Association: Economic and Legal Perspectives, 1987 Private Investors Abroad, supra note 7, at 3-7, 3-14.

35 Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, §5021, 102 Stat. 1107, 1425 (50 U.S.C. app. §2170) (West Supp. 1989)). In July 1989, the Department of the Treasury proposed regulations to implement the Exon-Florio provision. The regulations are expected to be codified, in the first part of 1990, at 31 C.F.R. pt. 800. See the second section of part IV infra for fuller discussion of current public opinion regarding FDI in the United States.

36 Fry, Foreign Investment in the United States and Canada: The Setting, in Regulation of FDI, supra note 6, at 1, 5.

37 Free Trade Area Agreement, Apr. 22,1985, Israel-United States, reprinted in 24 ILM 653 (1985).

38 Druckner, From World Trade to World Investment, Wall St. J., May 26, 1987, at 32.

39 Fry, supra note 36, at 1.

40 International Investment Policy Statement, supra note 30, at 1214. This statement is an updated and more detailed version of a similar document presented by the Carter administration in 1977. See Bale, supra note 15, at 166.

41 Bale, supra note 15, at 169-71.

42 Questions and Answers to Clayton Yeutter, in Building A Canadian-American Free Trade Area 202, 207 (E. Fried & P. Trezise eds. 1987).

43 Yeutter, A Vote of Confidence, in id. at 197, 199.

44 Stern, Canada/U.S. Trade and Investment Frictions: the U.S. View, in Canada/U.S. Trade, supra note 15, at 32, 59; see also Quinn, Issues in Canada/U.S. Energy Trade and Investment: a U.S. Perspective, in id. at 256, 263.

45 Schott, J., United States-Canada Free Trade: an Evaluation of the Agreement 24–25 (1988)Google Scholar.

46 United States Trade Representative, National Trade Estimate: 1986 Report on Foreign Trade Barriers 57–59 (1986).

47 GATT Report No. CL/5504 (Feb. 7, 1984), reprinted in Law and Practice Under the GATT, pt. II at 47 (Simmonds, K. & Hill, B. eds. 1989)Google Scholar. Minimum export requirements were found to be outside the GATT framework, and import substitution was not ruled upon because the panel found this question to be outside the terms of reference of the complaint.

48 Negotiation of United States-Canada Free Trade Agreement: Hearing Before the Senate Comm. on Finance, 99th Cong., 2d Sess. 28–39 (1986).

49 Id. at 39.

50 D. Cameron, the Free Trade Papers 43 (1986).

51 Letter from President Reagan to Senator Robert Packwood, reprinted in id. at 44.

52 United States-Canada Relations: Hearings Before the Subcomms. on International Economic Policy and Trade and on Western Hemisphere Affairs of the House Comm. on Foreign Affairs, 99th Cong., 2d Sess. 5–6 (1986).

53 Affaires Extérieures Canada, Les Négotiations Commerciales: la clé de L’avenir 4 (1987).

54 1 Report of The Royal Commission on the Economic Union and Development Prospects for Canada 382–83 and 302 (1985) [hereinafter Commission Report].

55 Affaires Extérieures Canada, supra note 53, at 4–5; Department of External Affairs, Canadian Trade Negotiations (1985), reprinted in D. Cameron, supra note 50, at 11, 14.

56 See statement of the Canadian Director of United States Trade and Economic Relations, quoted in Aronson, A Proposed Legal Framework for a Comprehensive Free Trade and Investment Agreement Between Canada and the United States, 8 Fordham Int’l L.J. 161, 180 (1984–85).

57 Department of External Affairs, supra note 55, at 21–22.

58 Reisman, S., The Issue of Free Trade, in U.S.-Canadian Economic Relations: Next Steps? 35, 48 (Fried, E. & Trezise, P. eds. 1984)Google Scholar.

59 Department of External Affairs, supra note 55, at 14–15.

60 Can. Parl., H.C., Minutes of Proceedings and Evidence of the Standing Committee of the House of Commons on External Affairs and International Trade [hereinafter Minutes], No. 23, 1986–87, at 22 (statement of Pat Carney, Minister for International Trade).

61 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 4044 (statement of Minister Carney).

62 Wonnacott, R. J., Potential Economic Effects of a Canada-U.S. Free Trade Agreement, in Canada–United States Free Trade 67, 76 (Whalley, J. ed. 1985)Google Scholar.

63 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 6202 (statement of Minister Carney).

64 Id. at 4104, 4178 and 6200 (statements of Minister Carney); id. at 6238–41 (statement of Prime Minister Mulroney).

65 Id. at 6199 (statement of Minister Carney).

66 Id. at 6330 (statement of Joe Clark, Secretary of State for External Affairs).

67 Solomon, It’s Time U.S. Put Its Cards on Table, Fin. Post, June 1, 1987, at 9.

68 Statement of Peter Murphy, U.S. chief negotiator, to U.S. Congressmen, quoted by Lloyd Axworthy, 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 6240.

69 Solomon, supra note 67, at 9.

70 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 6290 (statements of Prime Minister Mulroney and John Turner, Leader of the Opposition).

71 Statement of Ambassador Simon Reisman, Canadian chief negotiator, quoted by John Turner, id. at 6330.

72 Solomon, supra note 67, at 9 (quoting Minister Carney).

73 A motion blaming the Government was presented in the House of Commons. 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 6344–71.

74 Rasky, Warning on Canada Accord, N.Y. Times, Aug. 6, 1987, at D6.

75 Quoted by Lloyd Axworthy, 1987 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 7607–08.

76 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 7607 (statement of Prime Minister Mulroney).

77 Id. at 7608 (statement of Secretary Clark).

78 Lewington & Waddell, Late Push by Baker Shows Reagan Wish for Canadian Pact, Globe & Mail (Toronto), Oct. 5, 1987, at A5.

79 J. Schott, supra note 45, at 24.

80 FTA, supra note 2, Art. 1611.

81 Id., Art. 1602, para. 1.

82 Id., para. 2.

83 Id., para. 3.

84 Treaty Between the United States and ––––––– Concerning the Reciprocal Encouragement and Protection of Investment, Art. 11(8), reprinted in 4 Int’l Tax & Bus. Law. 136 (1986).

85 FTA, supra note 2, Art. 1607, para. 1.

86 Id., Art. 1611.

87 Id., Art. 1607, para. 1 (c).

88 Id., Art. 1602, para. 5.

89 Id., para. 6(a).

90 Id., para. 6(b).

91 Id., para. 7.

92 Gouvernement du Canada, Transcription Préliminaire: Accord de Libre-Échange Entre le Canada et les Etats-Unis : Elements de l’Accord (1987).

93 FTA, supra note 2, Art. 1602, para. 8.

94 Atkey, supra note 4, at 31.

95 FTA, supra note 2, Art. 1602, para. 9.

96 Nelson, The Investment Provisions of the Free Trade Agreement: A United States Perspective, in National Institute, supra note 4, at 45, 59.

97 FTA, supra note 2, Art. 1601, para. 2, and Art. 2005.

98 Id., Art. 1601, para. 3.

99 46 U.S.C. §883 (1982). Numerous representations by the shipping industry opposing any change in the U.S. maritime policy were made to Congress. See Senate Comm. on Finance, 100th Cong., 1st Sess., Data and Materials Related to United States-Canada Free Trade Negotiations 74–198 (Comm. Print 1987).

100 FTA, supra note 2, Art. 2012.

101 Address by Masse, Marcel, Minister of Communications, at the announcement of the new policy regarding foreign investment in Canadian publishing, Baie-Comeau, Quebec (July 6, 1985)Google Scholar.

102 Id.

103 FTA, supra note 2, Art. 1607, para. 4.

104 Address by MacDonald, Flora, Minister of Communications, to the Canadian Film and Television Association, Toronto (May 5, 1988)Google Scholar.

105 FTA supra note 2 Art 2005 par a 2.

106 Atkey, supra note 4, at 36.

107 FTA, supra note 2, Art. 1607, para. 3, and Ann. 1607.3.

108 Id., Art. 1607, para. 3, and Ann. 1607.3.

109 Id., Ann. 1607.3, para. 5.

110 Id., para. 2(b).

111 Id., para. 3.

112 Address by Minister MacDonald on the policy framework, for telecommunications in Canada (July 22, 1987).

113 Id.

114 FTA, supra note 2, Ann. 1607.3, para. 4. For the sake of clarity, Canada undertook to set out its policies in these areas in a letter to the United States prior to the entry into force of the Agreement.

115 Letter from Michael Wilson to James Baker III (May 12, 1988); FTA, supra note 2, pt. A. This policy was first announced in an address by Gerald Merrithew, Minister of State for Energy and Mines, on foreign ownership in the uranium–mining sector (Dec. 23, 1987).

116 Letter from Wilson to Baker, supra note 115. This policy was previously stated in two addresses by Marcel Masse, Minister of Energy, Mines and Resources, one to the American Stock Exchange, Seventh Annual Oil and Gas Symposium, in Toronto (Nov. 6, 1986), and one to the American Bar Association, in New York (June 4, 1987).

117 Atkey, supra note 4, at 31.

118 FTA, supra note 2, Art. 1603, para. 1.

119 Nelson, supra note 96, at 60.

120 Free Trade Area Agreement, supra note 37, Art. 13.

121 FTA, supra note 2, Arts. 1611 and 201.

122 Atkey, supra note 4, at 38; Baker, Taking the Fear out of FIRA: Legal Considerations for Investing in Canada, in Regulation of FDI, supra note 6, at 105, 127.

123 FTA, supra note 2, Art. 2010.

124 Id., Art. 1608, para. 4.

125 Id.

126 FTA; supra note 2, Art. 1605.

127 J. Schott, supra note 45, at 26; see also International Investment Policy Statement, supra note 30; Nelson, supra note 96, at 61; Treaty, supra note 84, Art. III.

128 FTA, supra note 2, Art. 1606.

129 Id., Art. 1604.

130 Id., Art. 1609.

131 Burns, Canada’s Liberals Battle the Trade Pact, N.Y. Times, Aug. 7, 1988, §5, at 3 (quoting Turner, John Google Scholar, leader of the Liberal Party).

132 John Turner, to Prime Minister Mulroney, during the electoral debate in English.

133 The proceedings of the Standing Committee of the House of Commons on External Affairs and International Trade gave a public stage to a few simplistic and exaggerated emotional statements dealing with the question of investment. See, e.g., Minutes, 1986–87, supra note 60, No. 31, at 32 (“the agreement has yielded Canada’s right to control investment”; Bill Lesich, M.P. and member of the committee); No. 38, at 8 (“we are not open for business . . . we are clearly up for sale”; Mel Hurtig, President of Hurtig Publishers); No. 49, at 52 (“almost all remaining screening of U.S. investment is to be dropped”; Dixon Bailey, Saskatchewan Pro– Canada Network); No. 50, at 21 (“it is the conquest of Canada” because there is no more screening of new investments, and the prohibition of performance requirements “effectively bars public control over the economic life of this country”; David Orchard, Citizens Concerned about Free Trade).

134 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 9640.

135 Finlayson, Canadian International Economic Policy: Context, Issues and a Review of Some Recent Literature, in Canada and the International Political/Economic Environment 9, 71–72 (Stairs, D. & Winham, G. eds. 1985)Google Scholar [hereinafter Political/Economic Environment]; Rugman, Multinationals and the Free Trade Agreement, in Trade-Offs on Free Trade 4, 7 (Gold, M. & Leyton–Brown, D. eds. 1988)Google Scholar.

136 A. E. Safarian, The Canada-U.S. Free Trade Agreement and Foreign Direct Investment 4 (1988).

137 Rugman, supra note 135, at 8.

138 Id. at 6; see also Rugman, The Free Trade Agreement and the Global Economy, 53 Bus. Q., No. 1, 1988, at 13, 18.

139 See text at note 54 supra.

140 2 Commission Report, supra note 54, at 232–35; and 3 id. at 430.

141 2 id. at 241; and 3 id. at 430.

142 2 id. at 226.

143 1986–87 Can. Parl. Deb., H.C., 33d Parl., 2d Sess. 6200 and 6290 (statements of Lloyd Axworthy).

144 2 Commission Report, supra note 54, at 241; and 3 id. at 430.

145 A. E. Safarian, supra note 136, at 3; Gouvernement Du Canada, Accord de Libre-Échange Entre le Canada et les Etats-Unis: Vue d’ensemble 32 (1987); Minutes, supra note 60, No. 31, 1986–87, at 32 (statement of Ambassador Gordon Ritchie, Canadian deputy chief negotiator).

146 Rugman, supra note 135, at 9; Rugman, supra note 138, at 17.

147 U.S. Concerns Spend More on Cross–Border Purchases, Wall St. J., June 30, 1989.

148 A. E. Safarian, supra note 136, at 3.

149 Lavelle, Barrows & Traficante, The Ontario Government’s Perspective on the Canada-U.S. Free Trade Agreement, 53 Bus. Q., No. 1, 1988, at 12 Google Scholar.

150 Gotlieb, The Legal Aspects of International Investment: The Canada-U.S. Experience, 76 ASIL Proc. 47, 51 (1982).

151 Dewhirst, Canada’s Foreign Investment Policies, in Proceedings of The First Annual Workshop on U.S.-Canadian Relations 52, 52–54 (Stern, R. M. ed. 1982)Google Scholar.

152 Bale, supra note 15, at 179; see also Stern, supra note 44, at 32 and 44. 153 Croobell, The Future of U.S. Direct Investment in Canada, in Regulation of FDI, supra note 6, at 165, 175 n.21.

154 GATT Report, supra note 47, at 47–88; see also Grover, supra note 7, at 2–4; A. E. Safarian, supra note 136, at 4; P. Wonnacott, The United States and Canada: The Quest for Free Trade 125(1987). Note that the panel found that export undertakings were not covered under GATT.

155 Rugman, supra note 135, at 6.

156 Id. Import substitution was among the practices that the United States raised in its complaint about Canada’s administration of FIRA, but the panel did not rule upon it. See note 47 supra.

157 C. Barrett et al., The Future of Foreign Investment in Canada 85 (1985).

158 Publishers Weekly, May 20, 1988, at 19.

159 N.Y. Times, Mar. 1, 1989, at Cl.

160 FTA, supra note 2, Art. 2005, paras. 1 and 2; see also text at note 123 supra.

161 Safarian, Government Control of Foreign Business Environment, in Domestic Policies and the International Economic Environment 7, 33 (Whalley, J. ed. 1985)Google Scholar.

162 Burgess, Perspectives on Foreign Direct Investment, in Perspectives on A U.S.-Canadian Free Trade Agreement 191, 208 (Stern, R., Trezise, P. & Whalley, J. eds. 1987)Google Scholar.

163 Id. at 207–08.

164 Safarian, supra note 161, at 42.

165 Burgess, supra note 162, at 194 n.4.

166 A. E. Safarian, supra note 136, at 6.

167 Examples of actual cases where Canadian subsidiaries have world product mandates are given in Croobell, supra note 153, at 172.

168 Webb & Zacher, Canadian Export Trade in a Changing International Environment, in Political/ Economic Environment, supra note 135, at 85, 130.

169 1 Commission Report, supra note 54, at 243.

170 P. Wonnacott, supra note 154, at 126.

171 Id.

172 1986 Can. Stat., ch. 26.

173 See Tuomi, Mergers and Acquisitions in Canada: The Interrelationship between Foreign Ownership and Competition Policy, 11 Can. Bus. L. J. 316 (1986).

174 MacDonald, Recent Developments in Canadian Competition Law, 14 Int’l Bus. Law. 34, 36 (1986). Indeed, the review agency routinely advises the Director of any application. Arnett, supra note 25, at 29.

175 Arnett, supra note 25, at 25.

176 Jappe, The Canadian Competition Act: A Leap Forward, 22 Int’l Law. 1071, 1086 (1988).

177 Fafan, Imperial’s New Texaco Takeover Proposal Called Anti-Competitive by Dealers, Union, Globe & Mail (Toronto), Dec. 8, 1989, at B3; Final Review Set on Texaco Canada Sale to Exxon Unit, Wall St. J., Feb. 27, 1989, at CI 7; Imperial Oil to Sell Certain Assets, Cites Antitrust Concerns, Wall St. J., June 30, 1989, at C13.

178 2 Commission Report, supra note 54, at 216 ff.

179 A. E. Safarian, supra note 136, at 6.

180 See Reuber & Wilson, Merger Policy Proposals: An Evaluation, in Canadian Competition Policy 260 (Pritchard, J. R. et al. eds. 1979)Google Scholar.

181 2 Commission Report, supra note 54, at 326.

182 A. E. Safarian, supra note 136, at 6.

183 Rugman, supra note 138, at 17.

184 Burgess, supra note 162, at 205; see also A. E. Safarian, supra note 136, at 8; C. Barrett et al., supra note 157, at 80.

185 C. Barrett et al., supra note 157, at 72.

186 Id. at 60.

187 Safarian, supra note 161, at 47–48.

188 Rugman, supra note 138, at 17.

189 Nelson, supra note 96, at 49.

190 Statistique Canada, Bilan des Investissements Internationaux du Canada (1985); A. Rugman, Outward Bound: Canadian Direct Investment in The United States 4 (1987); Rugman, supra note 135, at 9. Note that there is a considerable discrepancy between these numbers and the American figures regarding the stock of Canadian investment in the United States. For example, in 1985 the estimate by Canada of its stock of direct investment in the United States was U.S. $25 billion, while the corresponding U.S. figure amounts to only U.S. $16 billion. However, this discrepancy may be due more to different accounting methods than to a dramatically different appreciation of the reality. A. Rugman, supra, at 59 ff; Mixed Signals on Who’s Buying Whom, Can. Bus., No. 7, 1988, at 11. Others blame the inadequacy of the U.S. system of collection of information. H.R. Rep. No. 1216, supra note 33; Ricks, The Future of Foreign Direct Investment in the United States, in Regulation of FDI, supra note 6, at 177, 183. Unless otherwise indicated, only Canadian figures will be used below.

191 Minutes, supra note 60, No. 30, 1986–87, at 23 (statement of Pat Carney); and id., No. 48, 1986–87, at 35 (statement of the Vice Premier of Saskatchewan, Eric Bernston).

192 Foreign Investment in ‘88 Rose to Record $65 Billion, Wall St. J., May 31, 1989, at B10 (U.S. figures) [hereinafter Foreign Investment in ‘88].

193 Malcolm, U.S.–Canadian Trade Outpacing the Treaty, N.Y. Times, July 18, 1988, at Dl, D5.

194 Minutes, supra note 60, No. 43, 1986–87, at 21 (statement of Thomas Waterlord, CEO of the Mining Association of British Columbia). 195 Finlayson, supra note 135, at 72.

196 Minutes, supra note 60, No. 37, 1986–87, at 56–57 (statement of R. Lipsey, of the C. D. Howe Institute).

197 At the end of 1986, Canadian FDI abroad was valued at Can. $56 billion, compared to Can. $83 billion for FDI in Canada. Richards, Tendances récentes dans la position de l’investissement direct au Canada, L’Observateur Economique Canadien, February 1988, at 27.

198 2 Commission Report, supra note 54, at 234.

199 41 U.S.C. §§10a–10d(1982).

200 Minutes, supra note 60, No. 45, 1986–87, at 58 (statement of Prof. Bruce Wilkinson, University of Alberta).

201 Druckner, supra note 38, at 10.

202 A. Rugman, supra note 190, at 13.

203 Burgess, supra note 162, at 204.

204 The Silent Canadian Presence, Fin. Post, Jan. 18–24, 1988, at 1.

205 Druckner, supra note 38, at 10.

206 A. Ghetler, Secretary-Treasurer of Northwear Fashions, of Montreal, which sells 75% of its output in the United States, quoted in Jenish, Qui a peur du libre-échange?, L’Actualité, November 1988, at 68, 69.

207 Fierman, The Selling of America (Cont’d), Fortune, May 23, 1988, at 54, 55 and 61.

208 A. Rugman, supra note 190, at 10.

209 Id. at 18. .

210 Id. at 13.

211 C. Barrett etal., supra note 157, at 22.

212 A. Rugman, supra note 190, at 18.

213 Safarian, supra note 161, at 13–14.

214 A. Rugman, supra note 190, at 18.

215 Burgess, supra note 162, at 204.

216 Stairs & Winham, Canada and the International Political /Economic Environment: An Introduction, in Political/Economic Environment, supra note 135, at 1, 4.

217 Webb & Zacher, supra note 168, at 129.

218 Druckner, supra note 38, at 10.

219 Rugman, supra note 138, at 14.

220 Webb & Zacher, supra note 168, at 129.

221 A. Rugman, supra note 190, at 34.

222 Minutes, supra note 60, No. 45, 1986–87, at 58 (statement of Prof. Bruce Wilkinson).

223 A. Rugman, supra note 190, at 46.

224 Burgess, The Impact of Trade Liberalization on Foreign Direct Investment Flows, in Canada-United States Free Trade, supra note 62, at 193, 198.

225 Rugman, supra note 138, at 14; see also Nelson, supra note 96, at 51.

226 Minutes, supra note 60, No. 45, 1986–87, at 58 (statement of Prof. Bruce Wilkinson).

227 Druckner, supra note 38, at 10.

228 A. Rugman, supra note 190, at 43.

229 Id. at 45.

230 Id.

231 Minutes, supra note 60, No. 45, 1986–87, at 58 (statement of Prof. Bruce Wilkinson).

232 Id., No. 37, 1986–87, at 56 (statement of R. Lipsey).

233 Before 1973, FDI in the United States had been, for all practical matters, latent and its value was estimated at only U.S. $14 billion. In 1988 total FDI in the United States was evaluated at U.S. $327 billion, nearly five times the amount at the beginning of the decade. The annual increase in the value of FDI in the United States was 12% in 1985, 13% in 1986, 19% in 1987, and 24% in 1988, which shows that the increase is far from leveling off. For a review and analysis of the evolution of the stocks of FDI in the United States since 1973, see, inter alia, Bale, supra note 33, at 33; Ricks, supra note 190, at 180; Vila, supra note 33, at 5; Note, International Investment Survey Act: The High Cost of Knowledge, 14 Law & Pol’y Int’l Bus. 481 (1981 –82); Wessel, U.S. Position as World’s Largest Debtor Worsened by Almost $100 Billion in 1987, Wall St. J., July 15, 1988, at 4; Foreign Direct Investment in U.S. Grew 13% in 1986, Wall St. J., June 25, 1987, at 60; Work, Have They Checked the Deed to Mount Rushmore Lately?, U.S. News & World Rep., Aug. 8, 1988, at 48; Gumbel & Sease, Unwelcome Mat: Foreign Firms Build More U.S. Factories, Vex American Rivals, Wall St. J., July 24, 1987, at I; Foreign Investment in ‘88, supra note 192; Fierman, supra note 207, at 55–56.

234 In a general survey poll, a majority of Americans were found to be in favor of laws restricting FDI in U.S. business and real estate; more important, 43% of the respondents said they would be likelier to vote for a candidate that would promote legislation discouraging foreign ownership of U.S. firms. Mossberg, Most Americans Favor Laws to Limit Foreign Investments in U.S., Poll Finds, Wall St. J., Mar. 8, 1988, at 60. This desire to limit foreign investment is catching on even with leaders of the business and academic community. See, e.g., Fierman, supra note 207; Gumbel & Sease, supra note 233, at 6; Butler, U.S. Policy Toward Foreign Investment in the United States and Recent Developments Affecting Foreign Investment, in FDI in the U.S., supra note 33, at 3, 3; M. & Tolchin, S., Buying into America: How Foreign Money is Changing the Face of Our Nation (1988)Google Scholar; Prestowitz, C., Trading Places (1988)Google Scholar; Nash, Impasse Persists on Investment by Foreigners, N.Y. Times, Apr. 5, 1988, at D2; Malone, Fear and Xenophobia in Silicon Valley, Wall St. J., Feb. 23, 1987, at 24.

235 Indeed, when this measure was first presented, the presidential authority would have applied to any foreign takeover that would have “threatened essential commerce which affects national security.” See Langley, Panel’s Measure Lets President Ban Foreign Takeovers, Wall St. J., June 17, 1987, at 4. However, as a result of a compromise between the administration and Congress, the words “essential commerce” were deleted, but with the understanding that national security would be broadly defined. See Langley, White House Trade Conferees Reach Accord, Wall St. J., Mar. 28, 1988, at 3. The sponsor of this provision in the House, Representative James Florio of New Jersey, said that national security would be defined in a broad sense that might include, e.g., oil, machine tools and even tires; Senator Exon of Nebraska, the sponsor of the measure in the Senate, added that a viable national defense cannot exist “if we end up with foreign ownership and control of key defense–related production industries and technologies.” Tolchin, Bill Would Curb Foreign Companies in U.S. Takeovers, N.Y. Times, Mar. 26, 1988, at 1; see also 134 Cong. Rec. H905 (daily ed. Mar. 30,1988) (statement of Rep. Florio). In a country where defense contracts represent such a large part of government procurement, and where all major companies, in whatever field of activity they operate, can be expected to have some sort of contractual relationship with the Pentagon, this interpretation of the provision would confer very broad discretion on the President.

236 For example, in a deal where neither company was U.S. owned, Consolidated Gold Fields PLC1 was able to persuade the Department of Defense to review the hostile bid made by Minorco, S.A., which led to a revised bid by Minorco to meet U.S. concerns. See Pasztor & Lachica, Pentagon Is Handed Growing New Defense Role: Policing U.S. Corporate Takeovers From Abroad, Wall St. J., Mar. 8, 1989, at A16. In another case, the Committee on Foreign Investment in the United States, the interagency committee in charge of making recommendations to the President under the Exon-Florio provision, made a negative finding on a proposed acquisition by a Japanese undertaking of General Ceramics Inc., a U.S. $30-million-a-year ceramics manufacturer, which led to the complete withdrawal of the offer. See Tolchin, Agency on Foreign Takeovers Wielding Power, N.Y. Times, Apr. 24, 1989, at D6.

237 Quoted by Pasztor & Lachica, supra note 236, at A16.

238 The bill was introduced in the House by Representative Bryant on Jan. 3, 1989. See H.R. 5, 101st Cong., 1st Sess. (1989); 135 Cong. Rec. H36 (daily ed. Jan. 3, 1989). It was introduced in the Senate by Senator Harkin on Jan. 31, 1989.See S. 289, 101st Cong., 1st Sess. (1989); 135 Cong. Rec. S854–56 (daily ed. Jan. 31, 1989).

239 22 U.S.C. §§3101, 3101 note, 3103, 3104 (1982). This Act requires the disclosure of direct investments by foreign persons that control 10% or more of a U.S. business; reports filed must identify the foreign investor, specify the location and nature of the investment, and provide certain financial information. The information acquired remains confidential and is disclosed only in the aggregate for statistical and informational purposes. See House Hearings, supra note 33, at 172 (statement of Michael Butler).

240 On Apr. 18, 1988, to avoid a presidential veto, §703 was completely dropped from the trade bill. 134 Cong. Rec. H9582 (daily ed. Oct. 5, 1988) (statement of Rep. John Bryant). For an overview of the heated debate that surrounded this measure, see, e.g., Langley, Senate Trade Bill Retains Refunds for Sugar Firms, Wall St. J., July 26, 1987, at 44; Trade Move in Deadlock, N.Y. Times, Feb. 17, 1988, at D17; Tolchin, Opposition Mounting to Disclosure Proposal, N.Y. Times, Mar. 14, 1988, at D2; Tolchin, Bill Would Curb Foreign Companies in U.S. Takeovers, N.Y. Times, Mar. 26, 1988, at 1; Langley & Mossberg, White House Trade Conferees Reach Accord, Wall St. J., Mar. 28, 1988, at 3; Roberts, Reagan Asks for Changes in Congress Trade Bill, N.Y. Times, Mar. 29, 1988, at D2; Nash, supra note 234, at D2; Farnsworth, Democrats Withdraw Trade Deal, N.Y. Times, Apr. 15, 1988, at Dl; Farnsworth, Wide Effect Seen in U.S. Trade Fight, N.Y. Times, Apr. 18, 1988, at D1; Langley, Foreign Disclosure Is Pushed by Wright Risking Veto of Massive Trade Measure, Wall St. J., Apr. 18, 1988, at 2; Farnsworth, Congress Split on Disclosure Rule, N.Y. Times, Apr. 19, 1988, at D1. 241 H.R. 5410, 100th Cong., 2d Sess. (1988).

242 Legislative Summary, 44 Cong. Q. 3138 (1988).

243 Oreskes, House Speaker Delays Vote on Foreign Investor Rules, N.Y. Times, Feb. 17,1989, at D16; Birnbaum, Wright Angers Some With Call for Vote On More Disclosure by Foreign Investors, Wall St. J., Feb. 17, 1989, at A16.

244 Langley, Protectionist Attitudes Grow Stronger in Spite of Healthy Economy, Wall St. J., May 16, 1988, at 1.

245 Johnson, More U.S. Companies Are Selling Operations to Foreign Concerns, Wall St. J., Feb. 24, 1988, at 1, 12; Langley, supra note 244. 246 Langley, supra note 244.

247 Id.; 134 Cong. Rec. H2254 ff. (daily ed. Apr. 20, 1988) (statement of Rep. Bentley); and id. at H3916 (June 2) (statement of Rep. Stark); Matthews, East Buys West: Foreign Ownership on Rise, Wash. Post, May 28, 1988.

248 FTA, supra note 2, Arts. 1607 and 201.

249 1379, §127, 101st Cong., 1st Sess. (1990).