WORLD TRADE
Phosphine Ligands
Organophosphorus Compounds TRIMETHYLOPROPANE PHOSPHINE ESTER (l-Ethyl-4-phospha-3,5,8-trioxabicyclo [2.2.2] octane)
DIPHOS (Ethylenebisdiphenylphosphine)
DIPHENYL-p-TOLYPHOSPHINE METHOXYDIPHENYL PHOSPHINE n-BUTOXYDIPHENYLPHOSPHINE DI-n-BUTOXYPHENYLPHOSPHINE are six phosphine ligands now offered by Arapahoe as a representative sample of our capability of producing, on demand, a large spectrum of organophosphorus compounds in commercial quantities. Phosphine ligands and ligand combinations produce a large variety of complex metal catalysts which have found commercial use. Phosphines and organophosphorus compounds are also used as flame retardants, plasticizers, fuel additives, cross-linking agents and in similar applications. Write for full information on Arapahoe phosphine production capabilities and samples, prices, and technical information on these six representative phosphines.
cwmicflLS DIVISION OF SYNTEX CORPORATION 2855 WALNUT ST.. BOULDER. C0L0RA00 80302
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22
C & E N JULY 7. 1969
By EARL ANDERSON Senior Editor
The nuisance of foreign investment controls The mandatory controls on foreign direct investment have been both annoying and controversial ever since they first replaced voluntary controls in January 1968. They are still a nuisance, even though some of the bite has been taken out of them over the past half year, and they will remain a nuisance until they are completely abolished. They will remain controversial, however, long after they are gone. The controls were imposed, of course, as a temporary crutch for our crippled balance of payments. But there are two, highly opinionated schools of thought about how well the shoe fits. Most of the controversy concerns the effect of foreign direct investment upon one of the few bright spots in our balance of payments accounts—the trade balance. Those who support the controls contend that the large volumes of products pouring out of U.S.-owned plants abroad displace potential U.S. exports—exports that otherwise would bolster our deteriorating balance of trade. Not so, says the other school. For any of several reasons, this side argues, many of these export sales wouldn't have been consummated anyway. In fact, foreign affiliates of U.S. companies actually generate more exports than they displace because they purchase much of their capital equipment and raw material requirements in the U.S. and because they uncover export sales opportunities that would have gone undetected if the U.S. company hadn't established itself abroad. Impressive arguments can be mounted for both points of view. These arguments, however, are based primarily on theory or intuition. The controversy will never really be resolved until there is enough reliable, statistical data available on the trade effects of foreign affiliates. The unenviable task of collecting such data falls to the Commerce Department's respected Office of Business Economics (OBE). It is a difficult task at best and OBE has been making stabs at it ever since 1962. OBE published data on exports of U.S. companies to their affiliates for the years 1962-64, but discontinued it in 1965 because the data were incomplete and unreliable. Out of these data, however, came the often-quoted statistic that 25% of total U.S. manufactured exports are channeled through foreign affiliates. This number came at a time when foreign investment wasn't a dirty word in government circles. Since then, it has become suspect. Recently, OBE published some new data (Survey of Current Business, May 1969) but the numbers, based on 1965 exports, are already four years old. Like the old data, the new data are based upon information supplied voluntarily by parent companies. Unlike the old data, however, OBE hasn't extrapolated the new data to cover total U.S. exports because business practices vary too much from industry to industry (even company to company) to permit this statistical luxury. Confining itself to the 297 companies that reported on their exports, OBE comes up with some startling numbers. It finds that $4.4 billion out of total exports of $8.5 billion—better than half—went to foreign affiliates. In addition, these foreign subsidiaries purchased another $0.6 billion worth of goods from unaffiliated U.S. companies. This seemingly makes a good case for opponents of mandatory controls, but OBE throws in a precautionary note. It points out that half of the exports didn't need the benefit of foreign affiliates and most of the exports to affiliates were accounted for by a very few large companies. This, says OBE, suggests that foreign investments do not necessarily contribute to U.S. exports. So the issue is still unresolved. OBE intends to try again, this time with 1966 data collected for the first time on a mandatory, rather than voluntary, basis. Everyone wishes them well.
