World Trade Organization WT/WGTI/W/27 20 March 1998 (98-1128) Working Group on the Relationship between Trade and Investment Original: English COMMUNICATION FROM THE UNITED STATES The following communication, dated 9 March 1998, was received from the Permanent Mission of the United States with the request that it be circulated to Members. _______________ EFFECTS OF FOREIGN DIRECT INVESTMENT IN THE UNITED STATES ON U.S. TECHNOLOGY DEVELOPMENT Summary Rising globalization has raised a number of questions about the effects of operations of foreign-owned U.S. firms on U.S. science and technology development. The most frequently asked questions include: Do foreign-owned firms contribute to U.S. technological capability? Are their parent firms acquiring or establishing U.S. firms in order to acquire U.S. technologies? Are the R&D facilities established in the United States intended to aid their sales in the United States -- as facilities for tailoring produ