T H E NEWS IN F 0 c u s

fits of the trend rather than fight

it,” said Alan Schriesheim, direc-

tor of Argonne National Labora-

tory and chairman of the commit-

tee. During the 198Os, the share of

foreign ownership of U.S. manu-

facturing assets nearly tripled,

from 7.2 percent to 19.2 percent.

The committee concluded that

the growth of foreign investment

in U.S. R&D and the increase in

multinational alliances are poSi-

tive trends. To maximize the bene-

fits while minimizing the risks,

the committee also recommended

that:

l The federal government

should continue efforts to break

down barriers to U.S. investment

in foreign markets through exist-

ing trade laws. Trade barriers,

said the committee, “impose real

costs on U.S. citizens and raise

questions about the fairness and

value of foreign involvement

here.”

l Federal agencies should get

more latitude to benefit from the

R&D capabilities of U.S.-based,

foreign-owned firms. The commit-

tee notes that “foreign participa-

tion in publicly funded R&D is

regulated by confusing and at

times contradictory intergovem-

mental agreements and by U.S.

agency directives and guidelines.”

Euyope Reaches Timid Pact On Cross-Boydeu Access, Trade

A fter nearly a decade of wran-

gling, the battle over Euro-

pean Union cross border electric-

ity trade is settled, at least for

now. On June 20, EU ministers

reached a common position on a

draft directive that would open

EU countries’ electricity markets

to limited extra-national competi-

tion, with the prospect of a $56 bil-

lion market for power by the year

2003. A small market, open only

to the very largest customers-

100 GWh of annual usage or

more-would open sooner. Cus-

tomers using at least 20 GWh per

year would gain access in 2000,

and customers using 9 GWh per

year could be served by extra-na-

tional suppliers in 2003. The ar-

rangement could open 25 percent

of the market to outside supplier

access, with 32 percent of the mar-

ket reachable in six years.

But the extent of actual trading

will be constrained by limiting

provisions that could gut or

greatly restrict its purpose. Elec- tric&! de France, a steadfast foe of

open competition, won provi-

sions that appear to impose do-

mestic public service obligations

on foreign suppliers and call for

recovery of stranded costs. “There

cannot be a directive for us which

does not respect these two princi-

ples,” said France’s Industry Min-

ister Franck Borotra. In addition,

Ireland and Belgium won delays.

Though the main combatants

on the question were France and

Germany, nearly every EU mem-

ber had strong views on the mat-

ter, with countries such as the

U.K., Sweden, Norway and the

Netherlands preferring much

stronger liberalization. British En-

ergy Minister Tim Eggar, despite

the EU ban on his country’s beef,

decided against opposing the ac-

tion, saying “It’s better than no

deal.” And Germany’s RWE Ener-

gie AG, the country’s largest util-

ity with some 26 GW of installed

capacity, reacted negatively to the

compromise.

Despite the champagne corks

popping, the accord is not yet a

done deal. The arrangement must

still go before the European Parlia-

ment for its second opinion, then

come back to the Energy Council

for final approval, probably next

January.

Restructuring Watch

Southwestern Public Seyvice Backs Retail Wheeling in Texas

I n a June letter to Texas Gov.

George W. Bush, Southwestern Public Service Co. said allowing

retail customers to choose their

own power suppliers should be

“seriously considered” by the

next session of the legislature. In

August/September 2996 3