Direct Investment Positions for 2000 Country and Industry Detail.

Borga, Maria ; Mataloni, Raymond J. Jr.

IN 2000, the historical-cost position of foreign direct investment in the United States (FDIUS) grew 28 percent, while that of U.S. direct investment abroad (USDIA) grew 10 percent. In 1999, the rate of growth of the FDIUS position was 24 percent and that of the USDIA position was 13 percent. In the past 20 years, there were only two other 2-year periods in which the rate of growth for FDIUS substantially exceeded that for USDIA--1983-84 and, 1988-89--but in neither period was the difference in the rates of growth as large as in 1999-2000 (table 1).(1)

Table 1.--U.S. Direct Investment Position Abroad and Foreign Direct
Investment Position in the United States on a Historical-Cost
Basis, 1982-2000

 Billions Percent change
 of dollars from preceding
 year

Yearend

 USDIA FDIUS USDIA FDIUS

1982 207.8 124.7 ... ...
1983 212.2 137.1 2.1 9.9
1984 218.1 164.6 2.8 20.1
1985 238.4 184.6 9.3 12.2
1986 270.5 220.4 13.5 19.4
1987 326.3 263.4 20.6 19.5
1988 347.2 314.8 6.4 19.5
1989 381.8 368.9 10.0 17.2
1990 430.5 394.9 12.8 7.0
1991 467.8 419.1 8.7 6.1
1992 502.1 423.1 7.3 1.0
1993 564.3 467.4 12.4 10.5
1994 612.9 480.7 (1) (1)
1995 699.0 535.6 14.1 11.4
1996 795.2 598.0 13.8 11.7
1997 871.3 (r)681.8 9.6 14.0
1998 (r)1,000.7 (r)778.4 14.8 14.2
1999 (r)1,130.8 (r)965.6 13.0 24.0
2000 (p)1,244.7 (p)1,238.6 10.1 28.3

(p) Preliminary.

(r) Revised.

(1.) The USDIA and FDIUS positions reflect a discontinuity between
1993 and 1994 due to the reclassification from direct investment to
other investment accounts of intercompany debt between parent
companies and affiliates that are nondepository financial
intermediaries. This reclassification reducedthe USDIA and FDIUS
positions for 1994 by $27.4 billion and $15.9 billion, respectively.

FDIUS Foreign direct investment in the United States

USDIA U.S. direct investment abroad

The continued global boom in mergers and acquisitions contributed to the growth in both positions in 2000. Most of the cross-border mergers and acquisitions involving U.S. companies were with companies in Europe. Healthy economic growth in the United States and in many European countries contributed to the surge in business combinations between companies in these two regions. Both U.S. and European firms sought to increase their global positions through these acquisitions.

Industry-specific factors also contributed to the wave of mergers and acquisitions. Much of the business consolidation resulted from firms seeking economies of scale or market power, particularly in the petroleum, asset management (classified in finance), telecommunications services (classified in "other industries"), and insurance industries. In petroleum, for example, some firms are expanding in order to finance expected large capital expenditures for oil field exploration and development. In telecommunications and finance, firms are motivated by the increased global competition and investment opportunities arising from deregulation and from liberalized trade and investment laws. Rapid technological change spurred acquisitions of telecommunications companies, manufacturers of fiber optics and other communications equipment, computer equipment manufacturers, and financial services firms. Some of these consolidations reflect the scale economies that can be realized by using new technologies and by the capital expenditures required to deploy them. Some consolidations have allowed new technologies to be employed more widely while continuing to safeguard intellectual property.

Acquisition activity for FDIUS was particularly robust in 2000.(2) There were a number of sizable acquisitions of high-tech businesses in several industries identified with the "new economy", as well as in petroleum and finance.(3) The United States has been a favored destination of foreign direct investment partly because the pace of deregulation and technological change that has contributed to mergers and acquisitions in a number of industries has been particularly rapid in the United States, thus making U.S. companies in the affected industries attractive targets. In addition, since the mid-1990s, the U.S. economy has consistently grown faster than the economies of most major investing partners, partly because of accelerated productivity growth associated with investments in information technology; sustained productivity growth may attract foreign investors if they expect it to contribute to the long-run profitability of U.S. firms.

The capital flows underlying the changes in the two positions differed in composition. In 2000, as in 1999, the largest component of capital inflows for FDIUS was equity capital, and the largest component of capital outflows for USDIA was reinvested earnings. The higher earnings of foreign affiliates of U.S. companies relative to those of U.S. affiliates of foreign companies contributed to this difference in composition and partly reflects the greater average maturity of foreign affiliates.(4)

U.S. Direct Investment Abroad

The USDIA position valued at historical cost--the book value of U.S. direct investors' equity in, and net outstanding loans to, their foreign affiliates--was $1,244.7 billion at the end of 2000 (table 1 and chart 1). The largest positions remained those in the United Kingdom ($233.4 billion, or 19 percent of the total), in Canada ($126.4 billion, or 10 percent), and in the Netherlands ($115.5 billion, or 9 percent) (table 2.2 and chart 2).

[GRAPH OMITTED]

CHART 2

U.S. Direct Investment Position Abroad,
2000: Host-Country Shares

Other (27.1%)
United Kingdom (18.8%)
Canada (10.2%)
Netherlands (9.3%)
Japan (4.5%)
Switzerland (4.4%)
Bermuda (4.3%)
Germany (4.3%)
France (3.1%)
Brazil (2.9%)
Mexico (2.8%)
Panama (2.8%)
Australia (2.8%)
Ireland (2.7%)

U.S. Bureau of Economic Analysis

Note: Table made from a pie chart.

The USDIA position increased $113.9 billion, or 10 percent, in 2000, down from increases of 13 percent in 1999 and 15 percent in 1998. The following table shows the change in the position in 1999 and 2000 by the type of capital flow and valuation adjustment:

[Billions of dollars]

 1999 2000

Total 130.1 113.9
 Capital outflows 142.6 139.3
 Equity capital 58.8 49.9
 Increases 90.8 70.3
 Decreases 32.0 20.4
 Intercompany debt 23.3 2.8
 Reinvested earnings 60.5 86.5
 Valuation adjustments -12.5 -25.4
 Currency translation -11.7 -14.2
 Other -0.8 -11.2

Capital outflows for USDIA were $139.3 billion in 2000. By account, the largest share of outflows--62 percent--was accounted for by reinvested earnings. Equity capital accounted for 36 percent, and intercompany debt, for 2 percent.

Reinvested earnings, at $86.5 billion, were up 42 percent from 1999, reflecting both strong growth in earnings and a higher share' of total earnings that were reinvested. The decision to reinvest foreign affiliates' profits rather than remit them to the United States partly reflected attractive opportunities abroad to establish or acquire new operations or to expand ongoing operations. In addition, high levels of profitability in the United States may have reduced U.S. companies' need to repatriate profits from their foreign affiliates.

One indication of the attractiveness of investment opportunities abroad was the rise in current earnings of foreign affiliates. By industry, the most rapid rise in earnings--88 percent--occurred in petroleum and mainly reflected a sharp increase in crude oil prices. Earnings increases in other industries also contributed to the rise in reinvested earnings. Earnings in nonpetroleum industries grew 18 percent; the most rapid increases were in finance (except depository institutions), insurance, and real estate (FIRE) and in manufacturing. The increase in FIRE was almost fully accounted for by holding companies and reflected the earnings of operating affiliates in other industries that were indirectly owned by U.S. companies through holding--company affiliates (see the "Technical Note"). The increase in manufacturing partly reflected a rise in economic growth abroad--particularly in Asia and Pacific, where economic conditions continued to improve following the financial crisis of 1997-98.

Equity capital outflows were $49.9 billion, down 15 percent from 1999. Equity capital increases were $70.3 billion and primarily reflected the acquisition of existing foreign businesses by U.S. companies. Ten acquisitions, each valued at more than $1 billion, accounted for nearly two-thirds of total equity capital increases; eight of the acquired firms were in Europe. The acquisitions were part of a continuing wave of European merger and acquisition activity that reflected not only the factors that boosted merger and acquisition activity worldwide but also expectations of heightened competition within Europe as the European Union becomes a more highly integrated single market and as the adoption of the euro currency is completed in 2002. In an effort to remain competitive, some large diversified European companies have been shedding secondary business activities that sometimes have become candidates for U.S. acquisitions. Equity capital decreases, were widespread by area and primarily reflected the sale of affiliates to foreign buyers.

Intercompany debt outflows fell to a very low level--$2.8 billion--primarily reflecting a sharp decline in new lending by U.S. parents. The reductions in debt outflows were largest for parents' transactions with European and Asian affiliates.

The capital outflows were partly offset by a $25.4 billion negative valuation adjustment. Acquisitions made for more than book value required downward adjustments to reconcile the transactions values reflected in capital flows with the book values used in computing the historical-cost position. Nearly as important were negative currency-translation adjustments that resulted from the U.S. dollar's appreciation against the currencies of some important host countries--particularly the euro area countries. (See valuation adjustments in the box "Key Terms.")

Key Terms

The key terms used in this article are described in this box. For a
more detailed discussion of these terms and the methodologies used
to prepare the estimates, see Foreign Direct Investment in the United
States: 1992 Benchmark Survey, Final Results (Washington, DC: U.S.
Government Printing Office, 1995) and U.S. Direct Investment
Abroad: 1994 Benchmark Survey, Final Results (Washington, DC: U.S.
Government Printing Office, 1998). The methodologies are also
available at BEA's Web site at <www.bea.doc.gov>.

Direct investment. Investment in which a resident of one country
obtains a lasting interest in, and a degree of influence over the
management of, a business enterprise in another country. In the United
States, the criterion used to distinguish direct investment from other
types of investment is ownership of at least 10 percent of the voting
securities of an incorporated business enterprise or the equivalent
interest in an unincorporated business enterprise.

U.S. direct investment abroad (USDIA). The ownership or control,
directly or indirectly, by one U.S. resident of 10 percent or more
of the voting securities of an incorporated foreign business enterprise
or the equivalent interest in an unincorporated foreign business
enterprise.

Foreign direct investment in the United States (FDIUS). The
ownership or control, directly or indirectly, by one foreign resident
of 10 percent or more of the voting securities of an incorporated U.S.
business enterprise or the equivalent interest in an unincorporated
U.S. business enterprise.

Foreign affiliate. A foreign business enterprise in which a single
U.S. investor (that is, a U.S. parent) owns at least 10 percent of the
voting securities, or the equivalent:

U.S. affiliate. A U.S. business enterprise in which a single foreign
investor (that is, a foreign parent) owns at least 10 percent of the
voting securities, or the equivalent.

Ultimate beneficial owner (UBO). That person (in the broad legal
sense, including a company), proceeding up the affiliate's ownership
chain beginning with the foreign parent, that is not owned more
than 50 percent by another person. The UBO ultimately owns or
controls the affiliate and derives the benefits associated with
ownership or control. Unlike the foreign parent, the UBO of a U.S.
affiliate may be located in the United States.

Foreign parent group. Consists of (1) the foreign parent, (2) any
foreign person, proceeding up the foreign parent's ownership chain,
that owns more than 50 percent of the person below it, up to and
including the UBO, and (3) any foreign person, proceeding down the
ownership chain(s) of each of these members, that is owned more
than 50 percent by the person above it. (For FDIUS, the term "parent"
in the definitions below refers to both the foreign parent and
other members of the foreign parent group.)

Direct investment capital flows. Funds that parent companies
provide to their affiliates net of funds that affiliates provide to
their parents. For USDIA, capital flows also include the funds that
U.S. direct investors pay to unaffiliated foreign parties when
affiliates are acquired and the funds that U.S. investors receive from
them when affiliates are sold. Similarly, FDIUS capital flows include
the funds that foreign direct investors pay to unaffiliated U.S.
residents when affiliates are acquired and the funds that foreign
investors receive from them when affiliates are sold. FDIUS capital
flows also include debt and equity transactions between U.S. affiliates
and other members of their foreign parent groups.

Direct investment capital flows consist of equity capital, intercompany
debt, and reinvested earnings. Equity capital flows are the net
of equity capital increases and decreases. Equity capital increases
consist of payments made by parents to third parties for the purchase
of capital stock when they acquire an existing business, as well as
funds that parents provide to their affiliates that increase their
ownership interest in the affiliates. Equity capital decreases are
funds parents receive when they reduce their equity interest in
existing affiliates. Intercompany debt flows result from changes in
net outstanding loans and trade accounts between parents and their
affiliates, including loans by parents to affiliates and loans by
affiliates to parents. Reinvested earnings are the parents' claim on
the undistributed after-tax earnings of the affiliates.

Direct investment position. The value of direct investors' equity
in, and net outstanding loans to, their affiliates. The position may be
viewed as the parents' claims on the total assets of their affiliates
or as the financing provided in the form of equity (including
reinvested earnings) or debt by parents to their affiliates. Financing
obtained from other sources, such as local or third-party borrowing, is
excluded.

BEA provides estimates of the positions for USDIA and for FDIUS
that are valued on three bases--historical cost, current cost, and
market value. At historical cost, the positions are valued according to
the values carried on the books of affiliates; thus, most investments
reflect price levels of earlier time periods. At current cost, the
portion of the position representing parents' shares of their
affiliates' tangible assets (property, plant, and equipment and
inventories) is revalued from historical cost to replacement cost. At
market value, the owners' equity portion of the position is revalued
to current market value using indexes of stock prices.

Valuation adjustments to the historical-cost position. Adjustments
that are made to account for the differences between changes
in the historical-cost position, which are measured at book value, and
direct investment capital flows, which are measured at transaction
value. (Unlike the positions on a current-cost and market-value basis,
the historical-cost position is not adjusted to account for changes in
the replacement cost of the tangible assets of affiliates or in the
market value of parent companies' equity in affiliates.)

Valuation adjustments to the historical-cost position consist of
currency translation and "other" adjustments. Currency-translation
adjustments are made to account for changes in the exchange rates
that are used to translate affiliates' foreign-currency-denominated
assets and liabilities into U.S. dollars. The precise effects of
currency fluctuations on these adjustments depend on the value and
currency composition of affiliates' assets and liabilities.
Depreciation of foreign currencies against the dollar usually results
in negative translation adjustments because it tends to lower the
dollar value of foreign-currency-denominated net assets. Similarly,
appreciation of foreign currencies usually results in positive
adjustments because it tends to raise the dollar value of
foreign-currency-denominated net assets.

"Other" adjustments are made to account for differences between
the proceeds from the sale or liquidation of affiliates and their book
values, for differences between the purchase prices of affiliates and
their book values, for writeoffs resulting from uncompensated
expropriations of affiliates, for changes in industry of affiliate or
country of foreign parent, and for capital gains and losses (other than
currency translation adjustments). These capital gains and losses
represent the revaluation of the assets of ongoing affiliates for
reasons other than exchange-rate changes, such as the sale of assets
(other than inventory) for an amount different from their book value.

Changes by country

In 2000, the USDIA position grew about 10 percent in Europe, Latin America and Other Western Hemisphere, and Asia and Pacific, and it grew 14 percent in Canada. Position changes that exceeded $3 billion by area and by country are shown in the following table:

[Billions of dollars]

All countries 113.9
 Canada 15.4
 Europe 60.4
 Of which:
 United Kingdom 21.4
 Netherlands 9.9
 Ireland 7.3
 Switzerland 6.0
 Italy 5.7
 Latin America and Other
 Western Hemisphere 18.7
 Of which:
 Bermuda 7.0
 Mexico 3.2
 Asia and Pacific 17.7
 Of which:
 Japan 6.2
 Hong Kong 3.2
 Singapore 3.1

Within Europe, the largest increase by far was in the United Kingdom, followed by the Netherlands, Ireland, Switzerland, and Italy. The increase in the United Kingdom mainly reflected acquisitions of existing British businesses, notably investment banks. U.S. investing firms were partly motivated by recent changes in U.S. banking laws that have allowed U.S. depository institutions to diversify domestically; in order to become globally competitive in these diversified activities, these institutions have sought to expand their diversified activities abroad. The increases in the Netherlands and Ireland were largely accounted for by reinvested earnings, mainly reflecting strong earnings. In the Netherlands, most of the earnings were accounted for by holding companies that derive virtually all of their earnings from operating affiliates, many of which are located in other countries. In Ireland, earnings were concentrated in manufacturing and services. The increases in Switzerland and Italy mainly reflected the acquisition of existing foreign businesses.

Within Latin America and Other Western Hemisphere, Bermuda and Mexico accounted for most of the increase. The increases in both countries were mainly accounted for by reinvested earnings, reflecting strong earnings. In Bermuda, the robust, and growing, earnings were concentrated in FIRE (mainly insurance and holding companies). In Mexico, the sizable earnings were widespread by industry and partly reflected favorable local economic conditions and strong growth in exports to the United States.(5)

Within Asia and Pacific, the largest increases in the position were in Japan, Hong Kong, and Singapore. The increases in all three countries were mainly accounted for by reinvested earnings, reflecting strong earnings. In Japan, affiliates in FIRE and services accounted for nearly two-thirds of total earnings. Affiliates in these industries may have benefitted from recent shifts in Japanese business strategies in response to stagnant domestic business conditions. For example, Japanese affiliates of U.S. information technology (IT) services firms expanded their sales to large Japanese firms that were increasing their outsourcing of IT services, and Japanese affiliates of U.S. securities firms obtained new underwriting business as a result of a higher level of corporate merger and acquisition activity in Japan. Earnings in Hong Kong were concentrated in wholesale trade and finance. Earnings in Singapore were concentrated in industrial machinery and electronics manufacturing.

In Canada, most of the increase was accounted for by reinvested earnings, reflecting strong earnings, but equity capital to finance acquisitions also contributed. Earnings were large in petroleum, reflecting the high levels of oil and gas prices, and in transportation equipment manufacturing, reflecting substantial U.S. motor vehicle imports from Canada. Equity capital outflows to Canada were concentrated in services and in FIRE, reflecting the acquisition of Canadian business services and finance firms.

The USDIA positions in emerging markets, such as China and Eastern Europe, are relatively small but are growing rapidly. The position in China was $9.6 billion in 2000, up $1.6 billion from 1999; much of the growth was in electronics manufacturing. The position in Eastern Europe was $11.0 billion in 2000, up $1.4 billion from 1999; much of the growth was in financial industries.

Foreign Direct Investment in the United States

The FDIUS position valued at historical cost--the book value of foreign direct investors' equity in, and net outstanding loans to, their U.S. affiliates--was $1,238.6 billion at the end of 2000 (table 1 and chart 1) (see the box "Benchmark Revisions of the Estimates of Foreign Direct Investment in the United States"). The largest positions remained those of the United Kingdom ($229.8 billion, or 19 percent), Japan ($163.2 billion, or 13 percent), and the Netherlands ($152.4 billion, or 12 percent) (table 3.2 and chart 3).

Benchmark Revisions of the Estimates of Foreign
Direct Investment in the United States

The estimates of the position of foreign direct investment
in the United States (FDIUS) and related flows
for 1997 have been revised to incorporate data collected
in BEA's 1997 benchmark survey, which covered
the universe of FDIUS. The estimates for 1998 and
1999 have been revised by extrapolating the 1997 universe
data on the basis of data collected in BEA's quarterly
survey (which covers all foreign-owned U.S.
business above a size-exemption level) and by incorporating
new or adjusted data from that survey. The
revisions to the FDIUS position for these years were
small--2 percent or less for all countries and industries
combined. Previously, the estimates for 1997-99
were extrapolated from the 1992 benchmark survey of
FDIUS. For additional information, see "U.S. International
Transactions, Revised Estimates for 1989-2000"
in this issue. A summary of the benchmark revisions
to the 1997 data, by area and by major industry, will be
published in the September issue of the SURVEY.

In 2000, the FDIUS position increased $273.0
billion, or 28 percent, following an increase of 24
percent in 1999. The following table shows the
change in the FDIUS position in 1999 and 2000 by
type of capital flow and valuation adjustment:

[Billions of dollars]

 1999 2000

Total 187.2 273.0
 Capital inflows 295.0 281.1
 Equity capital 225.6 216.7
 Increases 254.3 233.9
 Decreases 28.7 17.1
 Intercompany debt 55.4 47.3
 Reinvested earnings 14.0 17.1
 Valuation adjustments -107.8 -8.1
 Currency translation -4.8 -1.9
 Other -102.9 -6.2
CHART 3

Foreign Direct Investment Position
in the United States, 2000:
Parent-Country Shares

United Kingdom (18.5%)
Japan (13.2%)
Netherlands (12.3%)
Germany (9.9%)
France (9.6%)
Canada (8.1%)
Luxembourg (6.7%)
Switzerland (6.6%)
Other (15.0%)

Note: Table made from a pie graph.

U.S. Bureau of Economic Analysis

Capital inflows were $281.1 billion in 2000, down 5 percent from the record level in 1999. Net inflows of equity capital accounted for 77 percent of total capital inflows. Intercompany debt accounted for 17 percent, and reinvested earnings for 6 percent.

Equity capital inflows were $216.7 billion, down 4 percent from 1999. Equity capital increases of $233.9 billion mainly reflected the acquisition of U.S. businesses by foreigners. Several of the largest acquisitions were made through exchanges of stock, in which the U.S. shareholders of the acquired firms exchanged their stock for shares in foreign firms. These self-financing transactions resulted in large, but almost entirely offsetting, financial flows in the U.S. international transactions accounts: The large inflows on direct investment that resulted from the foreign investors' acquisition of U.S. companies were offset by the outflows on foreign securities that resulted from the U.S. shareholders receiving the stock of the foreign firms.(6) Thus, these transactions had little effect on the net international investment position of the United States. The increases in equity capital were partly offset by equity capital decreases of $17.1 billion, which primarily reflected the sale of affiliates to U.S. buyers.

Intercompany debt inflows were $47.3 billion, down from a record $55.4 billion in 1999. More than 40 percent of the inflows were from parents in Luxembourg and represented existing U.S. affiliates' borrowing to finance acquisitions in manufacturing and services.

Reinvested earnings were a record $17.1 billion in 2000. Foreign parents chose to leave these earnings with U.S. affiliates, rather than to repatriate them as dividends, in order to finance acquisitions and expenditures on property, plant, and equipment in the United States. The increase in reinvested earnings was due to an increase in the earnings of U.S. affiliates; the share of earnings that was reinvested--at 42 percent--was little changed from 1999. The largest increase in reinvested earnings was in petroleum, reflecting both increased profitability associated with higher oil prices and the entry into the direct investment universe of recently acquired U.S. oil companies. Reinvested earnings also increased in machinery manufacturing, depository institutions, and insurance.

The capital inflows for FDIUS were partly offset by a small negative valuation adjustment. This adjustment was primarily related to acquisitions and was made to reconcile the transactions values reflected in capital inflows (which would otherwise determine the measured change in the position) with the smaller book values that are recorded in the historical-cost position.(7)

Changes by country

Parents in Europe accounted for more than four-fifths of the increase in the FDIUS position. Among these parents, those in the United Kingdom accounted for over one-quarter of the increase. The next largest increases were for parents in France, Switzerland, the Netherlands, and Luxembourg. Outside of Europe, the largest increase in position was by parents in Canada. Japan accounted for more than one-half of the increase by parents in Asia and Pacific.

The following table presents the major changes in position by area and by country. For every country except Japan, the increase in the position was largely due to acquisitions. For Japan, reinvested earnings accounted for a major portion of the increase.

[Billions of dollars]

All countries 273.0
 Canada 24.3
 Europe 220.6
 Of which:
 United Kingdom 62.9
 France 36.8
 Switzerland 28.0
 Netherlands 26.7
 Luxembourg 26.3
Latin America and Other
 Western Hemisphere 4.6
Asia and Pacific 19.0
 Of which:
 Japan 10.1
 Singapore 6.1

Most of the increase in the position of the United Kingdom was in petroleum and services (mainly in advertising and computer services). The position in petroleum nearly doubled, reflecting strong reinvested earnings of affiliates as well as the acquisition of new affiliates.

Elsewhere in Europe, the increase in the position of France was mainly in finance, insurance, and services. The increases in the positions of both Switzerland and the Netherlands were largely in finance, chemicals, and services. The position of Luxembourg increased as a result of acquisitions by firms ultimately owned by investors in other countries.(8)

The position of Canada increased largely because of acquisitions of communications equipment manufacturers and telecommunications firms. Nearly 40 percent of the increase in the position of Japan was from reinvested earnings, mostly those of affiliates in wholesale trade.

Technical Note: Holding Companies in the Data on U.S. Direct Investment Abroad

For the past two decades, U.S. parent companies have been funneling an increasing share of their direct investments abroad through holding companies.(9) In 1982, foreign affiliates classified as holding companies accounted for only 9 percent of the U.S. direct investment position abroad, but by 2000, they accounted for 23 percent of the position (chart A).

[GRAPH OMITTED]

The growth in holding-company affiliates reflects a variety of factors. Some holding-company affiliates are established primarily to coordinate management and administration of activities--such as marketing, distribution, or financing--worldwide or in a particular geographic region. In addition, the presence of holding-company affiliates in countries where the effective income tax rate faced by affiliates is relatively low suggests tax considerations may have also played a role in their growth.

One consequence of the increasing use of holding companies has been a reduction in the degree to which the USDIA position (and related flow) estimates reflect the industries and countries in which the production of goods and services by foreign affiliates actually occurs. This is because the estimates are classified according to the countries and industries of the affiliates with which the U.S. parent companies have direct transactions and positions, rather than according to the countries and industries of the affiliates whose operations the parents ultimately own or control.(10) For example, suppose that a U.S. manufacturer makes a capital contribution of $100 million to its holding-company affiliate in the Netherlands. This affiliate uses the funds to add to its equity investment in a German manufacturing affiliate of the U.S. manufacturer, which uses them to build a factory in Germany. In the U.S. international transactions accounts, the $100 million is recorded as a direct investment equity capital outflow to the Netherlands, and in the U.S. direct investment position abroad, a position of $100 million is recorded for finance in the Netherlands, because that is the industry and country of the affiliate with which the U.S. company has a direct claim.

Partly in response to the growing impact of holding companies on the distributions of the estimates by industry of affiliate, BEA has added a presentation of the USDIA position (and income) estimates by industry of U.S. parent.(11) Both distributions cover only those affiliates with which the U.S. parent companies have direct transactions and positions. By industry of U.S. parent, the positions in (and income of) affiliates of a given parent are all classified in the single industry that reflects the primary activity of the parent company in the United States. By industry of affiliate, they are classified in the industry that reflects the primary activity of each affiliate abroad.(12)

The following table shows the USDIA position in 2000 by industry of affiliate and by industry of U.S. parent:

[Billions of dollars]
 By industry of:

 affiliate U.S. parent

 All industries 1,244.7 1,244.7

Petroleum 105.5 160.5
Manufacturing 344.0 665.2
Wholesale trade 88.1 30.4
Depository institutions 37.2 39.2

FIRE 497.3 179.5

Services 79.9 55.5

Other industries 92.8 114.2

The largest differences between the two disaggregations are in manufacturing (which is larger by industry of parent) and in FIRE (which is larger by industry of affiliate). These differences primarily reflect the use of holding companies by U.S. parents in manufacturing.

In addition to the direct investment position (and related flow) estimates, BEA produces another set of estimates--the U.S. multinational company financial and operating (F&O) estimates. The F&O estimates provide a variety of measures of the overall operations of U.S. multinational companies--including assets, sales, employment, and gross product (value added)--and of the separate operations of U.S. parent companies and their foreign affiliates. Because the estimates for foreign affiliates are uniformly classified according to the country where the affiliate's physical assets are located or where its primary activity is carried out and because they are classified according to the industry that reflects the affiliate's primary activity, the F&O estimates more closely reflect the industries and countries in which the production of goods and services by foreign affiliates actually occurs than do those on the direct investment position (and related flows). However, as measures of operations, the estimates are not adjusted for the percentage of U.S. ownership and therefore cannot substitute for the position as measures of U.S. investments.

The preceding example involving affiliates in the Netherlands and Germany can be used to illustrate how the industry and country patterns differ for the two types of data. In the example, the F&O data for the German manufacturing affiliate would be classified by country in Germany and by industry in manufacturing, whereas the U.S. direct investment position (and related flow) data associated with that indirectly held affiliate would be classified by country in the Netherlands and by industry in FIRE.

One consequence of the increased use of holding-company affiliates has been a growing divergence in the industry patterns between the position estimates and the F&O estimates. The extent of this divergence can be illustrated by comparing estimates of the USDIA position and a selected F&O data item--the net property, plant, and equipment (PP&E) of affiliates.(13) For example, manufacturing accounted for over 40 percent of both the position and the net PP&E of affiliates in 1982; by 1994, its share was up slightly based on the PP&E estimates but down sharply (to 33 percent) based on the position estimates (chart B).(14)

[GRAPH OMITTED]

The country patterns in the two types of estimates also have diverged. As a result, the relative importance of some countries differs substantially for the two types of estimates. For example, the Netherlands accounted for just over 3 percent of both the direct investment position in, and the PP&E of, affiliates in 1982; by 1994, its share had risen to 5 percent based on the position but was essentially unchanged based on net PP&E (chart C). This example notwithstanding, the divergences of the country patterns in the position and F&O estimates have been much less pronounced than those of the industry patterns.(15)

[GRAPH OMITTED]

Table 2.1.--U.S. Direct Investment Position Abroad
on a Historical-Cost Basis, 1999(r)

[Millions of dollars]

 Manufacturing

 All
 industries Petroleum Total

 All countries 1,130,789 97,864 312,072

Canada 111,051 15,575 42,808

Europe 588,341 33,884 161,748

 Austria 3,711 (D) 1,120
 Belgium 17,347 90 7,560
 Denmark 4,123 1,108 1,334
 Finland 1,290 (D) 483
 France 40,009 (D) 17,519

 Germany 50,892 2,729 25,301
 Greece 604 (D) 61
 Ireland 26,084 (D) 8,704
 Italy 17,914 (D) 9,329
 Luxembourg 16,484 (D) 2,449
 Netherlands 105,571 3,355 21,592

 Norway 6,181 4,039 860
 Portugal 1,463 (D) 461
 Spain 13,244 161 8,383
 Sweden 10,200 83 2,077
 Switzerland 48,849 269 4,913
 Turkey 1,235 59 633
 United Kingdom 212,007 17,069 46,913
 Other 11,135 1,921 2,055

Latin America and Other
 Western Hemisphere 220,705 8,963 48,615

 South America 74,743 6,303 27,335
 Argentina 14,175 603 3,618
 Brazil 34,276 1,416 19,001
 Chile 10,105 33 1,292
 Colombia 3,854 687 1,302
 Ecuador 1,035 513 270
 Peru 2,705 369 199
 Venezuela 7,342 2,588 1,470
 Other 1,251 94 183

 Central America 68,456 1,322 20,009
 Costa Rica 1,539 30 (D)
 Guatemala 578 180 214
 Honduras 126 (D) 212
 Mexico 32,262 213 18,627
 Panama 33,027 622 (D)
 Other 923 (D) 156

 Other Western Hemisphere 77,506 1,337 1,271
 Bahamas 702 111 77
 Barbados 1,065 (D) 22
 Bermuda 47,119 (D) (D)
 Dominican Republic 956 156 471
 Jamaica 2,311 (D) 261
 Netherlands Antilles 3,652 (D) 27
 Trinidad and Tobago 1,329 1,025 49
 United Kingdom Islands,
 Caribbean 19,767 304 130
 Other 605 83 (D)

Africa 14,884 9,456 2,028
 Egypt 2,190 1,527 548
 Nigeria 1,462 1,240 59
 South Africa 2,905 11 901
 Other 8,326 6,678 520

Middle East 10,519 2,590 2,219
 Israel 3,051 4 2,068
 Saudi Arabia 4,426 238 143
 United Arab Emirates 557 235 87
 Other 2,486 2,113 -79

Asia and Pacific 181,882 24,476 54,654
 Australia 34,776 3,880 8,333
 China 8,058 1,347 4,887
 Hong Kong 20,092 160 2,876
 India 1,402 -386 853
 Indonesia 10,495 7,227 220
 Japan 49,438 (D) 12,638
 Korea, Republic of 8,559 (D) 3,492
 Malaysia 5,820 1,159 3,598
 New Zealand 5,433 72 792
 Philippines 3,136 12 1,301
 Singapore 20,117 1,742 9,950
 Taiwan 6,513 60 3,072
 Thailand 6,809 2,497 2,661
 Other 1,235 698 -19

International(1) 3,406 2,921 ...

Addenda:
 Eastern Europe(2) 9,581 1,964 2,007
 European Union (15)(3) 520,942 27,596 153,287
 OPEC(4) 29,152 15,794 1,914

 Manufacturing

 Primary
 Food and Chemicals and
 kindred and allied fabricated
 products products metals

 All countries 35,151 83,524 18,930

Canada 4,851 8,258 3,219

Europe 16,094 54,119 10,864

 Austria 39 56 1
 Belgium 1,036 4,669 127
 Denmark (D) (D) (D)
 Finland 7 346 (D)
 France 3,211 4,114 4,153

 Germany 486 4,856 1,505
 Greece (D) 43 (*)
 Ireland 600 3,040 184
 Italy 1,020 3,364 99
 Luxembourg -2 (D) (D)
 Netherlands 2,354 11,910 271

 Norway (D) 17 9
 Portugal 90 97 -8
 Spain 1,609 1,439 1,256
 Sweden -27 270 418
 Switzerland (D) 2,709 174
 Turkey 177 90 149
 United Kingdom 4,464 16,262 2,233
 Other 389 344 152

Latin America and Other
 Western Hemisphere 9,710 10,340 2,909

 South America 4,154 6,495 2,325
 Argentina 918 1,498 236
 Brazil 2,174 3,895 1,338
 Chile 186 226 (D)
 Colombia 312 413 (D)
 Ecuador 68 93 1
 Peru 72 84 (D)
 Venezuela 387 249 104
 Other 37 37 0

 Central America 5,406 3,436 (D)
 Costa Rica 108 171 24
 Guatemala 88 74 2
 Honduras 201 2 (*)
 Mexico 4,961 3,129 506
 Panama 36 30 (D)
 Other 11 30 (D)

 Other Western Hemisphere 150 409 (D)
 Bahamas 0 78 0
 Barbados (D) 0 0
 Bermuda 0 (D) 0
 Dominican Republic 26 26 0
 Jamaica (D) 151 0
 Netherlands Antilles (D) 0 0
 Trinidad and Tobago (*) (D) (D)
 United Kingdom Islands,
 Caribbean 1 47 (D)
 Other 0 (D) 0

Africa 788 273 254
 Egypt (D) 63 (D)
 Nigeria (D) 20 -1
 South Africa 204 155 (D)
 Other 151 34 199

Middle East 61 4 36
 Israel (D) 1 (D)
 Saudi Arabia (D) 74 15
 United Arab Emirates 0 (D) (D)
 Other (D) (D) 0

Asia and Pacific 3,647 10,530 1,648
 Australia 1,100 3,044 450
 China 207 278 206
 Hong Kong -25 324 (D)
 India (D) 96 (D)
 Indonesia 19 87 (D)
 Japan 852 2,905 320
 Korea, Republic of 476 696 22
 Malaysia 4 326 -6
 New Zealand 221 90 45
 Philippines 348 421 41
 Singapore -4 569 18
 Taiwan 52 1,423 43
 Thailand 107 301 70
 Other (D) -30 2

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 389 339 152
 European Union (15)(3) 14,859 50,959 10,380
 OPEC(4) 454 360 135

 Manufacturing

 Industrial Electronic
 machinery and other Transportation
 and electric equipment
 equipment equipment

 All countries 34,944 37,474 36,133

Canada 3,017 2,475 9,057

Europe 18,957 15,211 15,574

 Austria 67 (D) 356
 Belgium 208 335 293
 Denmark (D) (D) -11
 Finland 11 40 -5
 France 1,232 1,041 735

 Germany 4,751 1,837 7,505
 Greece 0 11 0
 Ireland 402 1,336 38
 Italy 898 1,167 737
 Luxembourg 9 -1 0
 Netherlands 1,910 3,218 123

 Norway 212 13 (D)
 Portugal (D) 241 66
 Spain 123 984 2,020
 Sweden 259 141 101
 Switzerland 468 602 (D)

 Turkey 0 -10 102
 United Kingdom 7,409 3,635 3,340
 Other 412 -33 (D)

Latin America and Other
 Western Hemisphere 3,434 2,555 7,086

 South America 1,870 1,919 2,807
 Argentina 53 2 198
 Brazil 1,777 1,830 2,190
 Chile 21 (D) (D)
 Colombia -7 (D) (D)
 Ecuador 0 0 (D)
 Peru 1 0 0
 Venezuela 25 57 222
 Other 1 0 3

 Central America 1,563 451 4,280
 Costa Rica (D) 85 0
 Guatemala 0 0 0
 Honduras 0 0 3
 Mexico (D) (D) 4,277
 Panama 0 0 0
 Other 0 (D) 0

 Other Western Hemisphere 1 185 0
 Bahamas -1 0 0
 Barbados 0 2 0
 Bermuda 0 (D) 0
 Dominican Republic 0 0 0
 Jamaica 0 0 0
 Netherlands Antilles 0 0 0
 Trinidad and Tobago 2 0 0
 United Kingdom Islands,
 Caribbean 0 (D) 0
 Other 0 0 0

Africa 106 76 168
 Egypt 14 -2 (D)
 Nigeria 0 0 (D)
 South Africa 90 61 76
 Other 3 17 (D)

Middle East 36 1,458 -12
 Israel (D) 1,457 (D)
 Saudi Arabia (D) 2 (D)
 United Arab Emirates 0 0 0
 Other 20 0 (*)

Asia and Pacific 9,394 15,699 4,259
 Australia 709 140 1,423
 China 962 2,275 199
 Hong Kong 143 1,385 27
 India 328 132 -115
 Indonesia -22 17 (D)
 Japan 1,170 1,799 2,036
 Korea, Republic of 278 933 171
 Malaysia 460 2,563 0
 New Zealand 17 40 0
 Philippines 19 296 0
 Singapore 3,915 4,663 210
 Taiwan 196 1,076 (D)
 Thailand 1,225 376 (D)
 Other -5 3 (D)

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 412 -63 136
 European Union (15)(3) 17,865 14,637 15,300
 OPEC(4) 19 75 220


 Manufacutring

 Other Wholesale Depository
 manufacturing trade institutions

 All countries 65,916 80,254 38,382

Canada 11,931 8,866 1,983

Europe 30,928 46,715 22,532

 Austria (D) 605 (D)
 Belgium 891 2,943 365
 Denmark 321 (D) (*)
 Finland (D) 370 20
 France 3,034 2,517 1,649

 Germany 4,362 3,298 1,046
 Greece (D) 88 138
 Ireland 3,105 278 -7
 Italy 2,043 2,596 212
 Luxembourg 2,017 (D) 228
 Netherlands 1,805 8,478 (D)

 Norway (D) 282 (D)
 Portugal (D) 337 (D)
 Spain 953 1,346 2,003
 Sweden 916 397 (D)
 Switzerland 774 13,888 2,812
 Turkey 124 55 273
 United Kingdom 9,570 7,409 9,726
 Other (D) 514 (D)

Latin America and Other
 Western Hemisphere 12,581 7,530 2,148

 South America 7,765 2,304 5,383
 Argentina 713 448 2,090
 Brazil 5,797 861 1,939
 Chile 176 370 654
 Colombia 431 144 (D)
 Ecuador (D) 68 (D)
 Peru (D) 80 133
 Venezuela 425 228 50
 Other 105 106 302

 Central America (D) 2,647 1,280
 Costa Rica (D) (D) 0
 Guatemala 50 (D) (D)
 Honduras 6 2 5
 Mexico 4,154 1,314 1,120
 Panama 46 439 131
 Other (D) (D) (D)

 Other Western Hemisphere (D) 2,579 -4,515
 Bahamas 0 75 -2,423
 Barbados (D) 271 (D)
 Bermuda 0 1,827 0
 Dominican Republic 419 29 72
 Jamaica (D) 83 (D)
 Netherlands Antilles (D) 59 0
 Trinidad and Tobago (D) 21 (D)
 United Kingdom Islands,
 Caribbean (D) 211 -2,276
 Other 3 3 (D)

Africa 363 210 384
 Egypt 2 48 (D)
 Nigeria 0 7 (D)
 South Africa (D) 119 (D)
 Other (D) 35 120

Middle East 637 305 701
 Israel (D) 109 0
 Saudi Arabia (D) 98 (D)
 United Arab Emirates (D) 98 (D)
 Other -3 1 -39

Asia and Pacific 9,477 16,629 10,634
 Australia 1,467 2,274 2,681
 China 760 222 70
 Hong Kong (D) 4,870 1,971
 India (D) 90 (D)
 Indonesia (D) 11 287
 Japan 3,557 5,322 727
 Korea, Republic of 915 852 1,908
 Malaysia 250 131 448
 New Zealand 379 237 (D)
 Philippines 176 194 171
 Singapore 580 1,422 522
 Taiwan (D) 651 691
 Thailand (D) 323 525
 Other 0 31 (D)

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 642 467 479
 European Union (15)(3) 29,286 31,976 17,830
 OPEC(4) 649 441 (D)

 Finance
 (except
 depository
 institu-
 tions), Other
 insurance, Services industries
 and real
 estate

 All countries 443,263 70,398 88,556

Canada 27,059 6,450 8,311

Europe 241,634 44,067 37,762

 Austria 133 165 -58
 Belgium 3,794 2,687 -93
 Denmark (D) 130 190
 Finland (D) 58 127
 France 10,597 5,171 (D)

 Germany 13,371 2,470 2,677
 Greece 147 33 (D)
 Ireland 8,621 7,807 (D)
 Italy 1,657 2,403 (D)
 Luxembourg 13,012 40 18
 Netherlands 67,182 3,684 (D)

 Norway 519 253 (D)
 Portugal 218 85 94
 Spain 537 489 325
 Sweden 5,868 1,068 (D)
 Switzerland 24,766 1,638 564
 Turkey 7 64 143
 United Kingdom 87,023 15,418 28,448
 Other 3,313 404 (D)

Latin America and Other
 Western Hemisphere 125,128 6,258 22,063

 South America 15,201 2,365 15,852
 Argentina 4,698 834 1,885
 Brazil 5,304 691 5,064
 Chile 3,384 194 4,177
 Colombia 922 46 (D)
 Ecuador 122 4 (D)
 Peru 302 49 1,572
 Venezuela 354 524 2,129
 Other 114 24 428

 Central America 37,921 1,578 3,700
 Costa Rica 2 -2 (*)
 Guatemala (D) 4 28
 Honduras 34 0 (D)
 Mexico 6,047 1,280 3,661
 Panama 31,457 287 (D)
 Other (D) 9 (D)

 Other Western Hemisphere 72,006 2,315 2,512
 Bahamas 2,736 72 55
 Barbados 291 324 (D)
 Bermuda 43,852 1,625 (D)
 Dominican Republic (*) 20 208
 Jamaica 11 46 1,844
 Netherlands Antilles 3,523 (D) (*)
 Trinidad and Tobago (D) 1 183
 United Kingdom Islands,
 Caribbean 21,097 167 135
 Other (D) (D) (D)

Africa 1,227 208 1,371
 Egypt 0 -139 (D)
 Nigeria (D) 0 5
 South Africa 606 244 (D)
 Other (D) 103 (D)

Middle East 1,998 773 1,933
 Israel 303 383 183
 Saudi Arabia 1,342 283 (D)
 United Arab Emirates (D) 66 -37
 Other (D) 41 (D)

Asia and Pacific 46,217 12,642 16,630
 Australia 9,151 2,224 6,234
 China 622 229 680
 Hong Kong 6,234 636 3,344
 India 268 70 (D)
 Indonesia 330 33 2,387
 Japan 17,143 7,535 (D)
 Korea, Republic of 60 537 (D)
 Malaysia 406 125 -46
 New Zealand 3,303 30 (D)
 Philippines 1,095 65 297
 Singapore 5,429 951 101
 Taiwan 1,741 113 185
 Thailand 371 60 373
 Other 62 34 (D)

International(1) ... ... 485

Addenda:
 Eastern Europe(2) 3,020 333 1,311
 European Union (15)(3) 213,029 41,707 35,516
 OPEC(4) 2,408 975 (D)

(*) Less than $500,000 (+/-).

(D) Suppressed to avoid disclosure of data of individual companies.

(r) Revised.

(1.) "International" consists of affiliates that have operations
spanning more than one country and that are engaged in petroleum
shipping, other water transportation, or offshore oil and gas
drilling.

(2.) "Eastern Europe" comprises Albania, Armenia, Azerbaijan, Belarus,
Bulgaria, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan,
Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovakia,
Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

(3.) The European Union (15) comprises Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

(4.) OPEC is the Organization of Petroleum Exporting Countries. Its
members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria,
Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.
Table 2.2.--U.S. Direct Investment Position
Abroad on a Historical-Cost Basis, 2000(p)

[Millions of dollars]

 Manufacturing

 All
 industries Petroluem Total

 All countries 1,244,654 105,486 343,992

Canada 126,421 18,018 50,425

Europe 648,731 32,566 177,445

 Austria 3,676 (D) 1,114
 Belgium 16,409 -164 7,346
 Denmark 5,618 1,099 2,340
 Finland 1,279 81 672
 France 39,087 1,010 16,515

 Germany 53,610 2,946 26,801
 Greece 672 78 29
 Ireland 33,369 667 9,874
 Italy 23,622 (D) 14,498
 Luxembourg 19,470 49 2,297
 Netherlands 115,506 3,149 24,228

 Norway 6,303 4,192 810
 Portugal 1,784 (D) 479
 Spain 14,561 149 8,603
 Sweden 11,371 93 2,860
 Switzerland 54,873 152 4,698
 Turkey 1,378 46 746
 United Kingdom 233,384 15,749 50,994
 Other 12,760 2,126 2,543

Latin America and Other
 Western Hemisphere 239,388 9,084 50,696

 South America 79,354 6,317 27,245
 Argentina 14,489 654 3,623
 Brazil 35,560 1,102 18,940
 Chile 10,846 73 1,363
 Colombia 4,423 772 1,373
 Ecuador 838 461 175
 Peru 3,317 358 196
 Venezuela 8,423 2,803 1,366
 Other 1,456 93 210

 Central America 74,754 1,264 21,874
 Costa Rica 1,983 31 764
 Guatemala 904 474 230
 Honduras 115 (D) 192
 Mexico 35,414 163 20,379
 Panama 35,407 273 152
 Other 931 (D) 157

 Other Western Hemisphere 85,280 1,502 1,577
 Bahamas 668 631 (D)
 Barbados 1,227 (D) 65
 Bermuda 54,114 (D) (D)
 Dominican Republic 1,126 (D) 590
 Jamaica 2,596 (D) 239
 Netherlands Antilles 3,725 (*) (D)
 Trinidad and Tobago 1,331 1,063 62
 United Kingdom Islands,
 Caribbean 20,165 322 146
 Other 329 -74 (D)

Africa 15,813 10,085 2,226
 Egypt 2,735 2,053 581
 Nigeria 1,283 881 58
 South Africa 2,826 6 947
 Other 8,969 7,145 640

Middle East 11,851 2,864 2,490
 Israel 3,426 4 2,326
 Saudi Arabia 4,784 218 132
 United Arab Emirates 573 211 (D)
 Other 3,069 2,431 (D)

Asia and Pacific 199,599 26,736 60,710
 Australia 35,324 6,992 7,964
 China 9,577 1,846 5,663
 Hong Kong 23,308 202 3,283
 India 1,258 -430 790
 Indonesia 11,605 8,440 273
 Japan 55,606 (D) 15,173
 Korea, Republic of 9,432 (D) 3,954
 Malaysia 5,995 1,252 3,411
 New Zealand 5,340 63 711
 Philippines 2,910 1 1,207
 Singapore 23,245 1,718 11,834
 Taiwan 7,737 60 3,692
 Thailand 7,124 2,666 2,767
 Other 1,138 574 -12

International(1) 2,851 3,134 ...

Addenda:
 Eastern Europe(2) 11,009 2,167 2,489
 European Union (15)(3) 573,416 26,051 168,648
 OPEC(4) 32,401 17,460 1,884

 Manufacturing

 Primary
 Food and Chemicals and
 kindred and allied fabricated
 products products metals

 All countries 36,840 86,081 18,713

Canada 4,445 8,929 3,630

Europe 16,787 55,898 9,882

 Austria 39 73 (D)
 Belgium 1,018 4,558 143
 Denmark (D) (D) 28
 7 355 59
 France 3,387 3,742 3,800

 Germany 467 4,873 1,210
 Greece -30 33 2
 Ireland (D) 3,753 192
 Italy 934 3,588 96
 Luxembourg (*) (D) (D)
 Netherlands 2,830 12,832 -52

 Norway (D) 19 9
 Portugal 113 95 -11
 Spain 1,593 1,832 1,277
 Sweden -27 206 (D)
 Switzerland 86 2,779 134
 Turkey 191 81 (D)
 United Kingdom 4,815 16,170 2,188
 Other (D) 413 (D)

Latin America and Other
 Western Hemisphere 10,595 10,616 3,304

 South America 4,293 6,188 2,503
 Argentina 883 1,549 213
 Brazil 2,450 3,473 1,458
 Chile 151 230 (D)
 Colombia 348 425 104
 Ecuador -10 109 (*)
 Peru 66 89 (D)
 Venezuela 347 272 97
 Other 58 40 0

 Central America 6,176 3,743 (D)
 Costa Rica 116 166 28
 Guatemala 103 61 2
 Honduras 208 2 -1
 Mexico 5,696 3,436 (D)
 Panama 40 (D) 30
 Other 12 (D) 6

 Other Western Hemisphere 126 686 (D)
 Bahamas 0 (D) 0
 Barbados (D) (D) 0
 Bermuda 0 (D) 0
 Dominican Republic 31 31 0
 Jamaica (D) 167 0
 Netherlands Antilles 2 0 0
 Trinidad and Tobago (*) 17 (D)
 United Kingdom Islands,
 Caribbean 8 -15 (D)
 Other 0 (D) 0

Africa 833 294 246
 Egypt (D) 29 (D)
 Nigeria (D) 22 -1
 South Africa 142 205 (D)
 Other 182 37 197

Middle East 62 30 28
 Israel 79 5 -2
 Saudi Arabia (D) 53 (D)
 United Arab Emirates 0 (D) (D)
 Other (D) (D) 0

Asia and Pacific 4,117 10,314 1,623
 Australia 1,197 2,624 472
 China 181 245 183
 Hong Kong -55 374 349
 India 239 92 (D)
 Indonesia 21 148 1
 Japan 1,232 2,843 330
 Korea, Republic of 527 807 19
 Malaysia -8 312 -4
 New Zealand 234 74 42
 Philippines 349 371 55
 Singapore 5 574 11
 Taiwan 59 1,483 60
 Thailand 105 399 69
 Other 29 -32 (D)

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 433 408 219
 European Union (15)(3) 15,594 52,605 9,385
 OPEC(4) 413 468 127

 Manufacturing

 Industrial Electronic
 machinery and other Transportation
 and electric equipment
 equipment equipment

 All countries 42,523 43,441 41,099

Canada 3,447 3,271 12,707

Europe 24,374 18,075 16,015

 Austria 131 403 228
 Belgium 206 312 229
 Denmark (D) 487 -13
 Finland 77 61 77
 France 1,330 1,242 594

 Germany 6,063 2,537 6,979
 Greece 0 13 0
 Ireland 460 1,433 32
 Italy 1,167 1,346 989
 Luxembourg 10 -7 0
 Netherlands 2,925 3,584 -26

 Norway 210 7 -11
 Portugal (D) 237 69
 Spain 123 1,020 1,838
 Sweden 293 846 183
 Switzerland 607 556 49
 Turkey 0 -12 228
 United Kingdom 9,022 3,977 4,319
 Other 416 34 252

Latin America and Other
 Western Hemisphere 3,361 1,987 7,683

 South America 1,961 1,870 2,677
 Argentina 47 -5 151
 Brazil 1,867 1,794 2,198
 Chile 17 (D) (D)
 Colombia (D) (D) (D)
 Ecuador 0 0 (D)
 Peru (D) 0 0
 Venezuela 35 49 145
 Other (D) 0 6

 Central America 1,396 92 5,004
 Costa Rica 301 96 0
 Guatemala 0 0 0
 Honduras 0 0 -26
 Mexico 1,095 (D) 5,029
 Panama 0 0 0
 Other 0 (D) 0

 Other Western Hemisphere 3 24 3
 Bahamas -2 0 0
 Barbados 0 3 0
 Bermuda 0 0 0
 Dominican Republic 0 0 0
 Jamaica 0 0 0
 Netherlands Antilles 0 0 0
 Trinidad and Tobago 4 0 0
 United Kingdom Islands,
 Caribbean 0 21 3
 Other 0 0 0

Africa 113 91 212
 Egypt 21 -3 (D)
 Nigeria 0 0 (D)
 South Africa 89 71 141
 Other 3 22 (D)

Middle East 118 1,828 -14
 Israel 95 1,827 7
 Saudi Arabia -2 2 -21
 United Arab Emirates 0 0 0
 Other 24 0 1

Asia and Pacific 11,111 18,189 4,496
 Australia 705 159 1,446
 China 931 3,208 147
 Hong Kong 138 1,758 33
 India 358 157 -161
 Indonesia -28 3 (D)
 Japan 1,581 2,033 2,391
 Korea, Republic of 336 1,059 196
 Malaysia 202 2,718 0
 New Zealand 18 44 0
 Philippines 11 283 0
 Singapore 5,411 4,801 284
 Taiwan 188 1,454 65
 Thailand 1,263 509 93
 Other -2 3 (D)

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 416 -5 252
 European Union (15)(3) 23,141 17,490 15,497
 OPEC(4) 23 53 143

 Manufacturing

 Other Wholesale Depository
 manufacturing trade institutions

 All countries 75,294 88,090 37,155

Canada 13,996 9,834 1,999

Europe 36,413 50,869 23,941

 Austria (D) 592 1,601
 Belgium 880 1,828 543
 Denmark (D) 619 (*)
 Finland 36 328 20
 France 2,419 2,558 1,823

 Germany 4,673 3,215 699
 Greece 11 178 117
 Ireland (D) 620 -50
 Italy 6,376 2,637 270
 Luxembourg 1,872 1,111 310
 Netherlands 2,135 10,486 (D)

 Norway (D) 325 (D)
 Portugal (D) 278 128
 Spain 921 1,608 2,096
 Sweden (D) 354 (D)
 Switzerland 486 15,577 2,974
 Turkey (D) 30 351
 United Kingdom 10,504 7,953 9,930
 Other 776 571 (D)

Latin America and Other
 Western Hemisphere 13,150 9,076 -1,639

 South America 7,753 2,063 5,871
 Argentina 785 389 2,319
 Brazil 5,698 792 2,139
 Chile 186 374 700
 Colombia 443 96 (D)
 Ecuador (D) 53 (D)
 Peru 45 56 (D)
 Venezuela 421 176 51
 Other (D) 129 309

 Central America (D) 3,112 1,238
 Costa Rica 56 1,147 0
 Guatemala 64 34 (D)
 Honduras 8 3 (D)
 Mexico (D) 1,450 1,189
 Panama (D) 446 16
 Other (D) 33 (D)

 Other Western Hemisphere (D) 3,901 -8,748
 Bahamas 0 (D) -3,783
 Barbados 4 331 24
 Bermuda 0 2,682 0
 Dominican Republic 529 49 90
 Jamaica (D) 259 (D)
 Netherlands Antilles (D) 62 0
 Trinidad and Tobago (D) (D) (D)
 United Kingdom Islands,
 Caribbean (D) 322 -5,174
 Other 3 (*) (D)

Africa 437 268 413
 Egypt 1 (D) (D)
 Nigeria 0 (D) (D)
 South Africa (D) 166 (D)
 Other (D) (D) 140

Middle East 437 299 863
 Israel 315 74 0
 Saudi Arabia 74 109 (D)
 United Arab Emirates (D) 115 (D)
 Other (D) (*) -1

Asia and Pacific 10,861 17,744 11,578
 Australia 1,360 2,512 2,627
 China 768 362 78
 Hong Kong 686 5,617 2,405
 India (D) 124 291
 Indonesia (D) (D) 249
 Japan 4,764 4,689 733
 Korea, Republic of 1,009 858 2,104
 Malaysia 192 271 (D)
 New Zealand 299 232 (D)
 Philippines 140 232 201
 Singapore 749 1,590 696
 Taiwan 381 871 703
 Thailand 329 318 650
 Other 0 (D) (D)

International(1) ... ... ...

Addenda:
 Eastern Europe(2) 766 532 1,233
 European Union (15)(3) 34,936 34,365 18,083
 OPEC(4) 657 445 (D)

 Finance
 (except
 depository
 institu- Other
 tions), Services industries
 insurance,
 and real
 estate

 All countries 497,267 79,857 92,809

Canada 29,125 8,297 8,724

Europe 272,340 49,504 42,066

 Austria 126 164 (D)
 Belgium 4,024 2,996 -163
 Denmark 1,278 111 171
 Finland -3 68 114
 France 9,964 5,537 1,680

 Germany 14,678 2,729 2,542
 Greece 152 40 77
 Ireland 12,668 9,277 313
 Italy 1,929 2,236 (D)
 Luxembourg 15,649 35 19
 Netherlands 71,373 4,602 (D)

 Norway 609 253 (D)
 Portugal 214 491 (D)
 Spain 1,176 559 370
 Sweden 6,022 1,141 (D)
 Switzerland 28,384 1,687 1,402
 Turkey 2 53 150
 United Kingdom 100,273 17,258 31,227
 Other 3,822 269 (D)

Latin America and Other
 Western Hemisphere 140,655 7,301 24,215

 South America 17,993 2,768 17,096
 Argentina 5,633 698 1,172
 Brazil 6,240 925 5,424
 Chile 3,557 210 4,569
 Colombia 758 48 (D)
 Ecuador 124 5 (D)
 Peru 841 55 (D)
 Venezuela 727 811 2,489
 Other 112 17 587

 Central America 41,506 1,393 4,366
 Costa Rica 2 -2 41
 Guatemala 123 3 (D)
 Honduras 9 0 -119
 Mexico 6,732 1,200 4,301
 Panama 34,388 182 -50
 Other 252 10 (D)

 Other Western Hemisphere 81,156 3,139 2,753
 Bahamas 3,507 32 55
 Barbados 312 331 (D)
 Bermuda 49,316 2,380 (D)
 Dominican Republic (*) 19 (D)
 Jamaica 14 53 1,969
 Netherlands Antilles 3,641 (D) (*)
 Trinidad and Tobago (D) 1 118
 United Kingdom Islands,
 Caribbean 23,970 261 317
 Other (D) (D) (D)

Africa 1,425 98 1,298
 Egypt 0 -138 4
 Nigeria 274 0 6
 South Africa (D) 118 (D)
 Other (D) 118 (D)

Middle East 2,283 1,018 2,033
 Israel 236 588 197
 Saudi Arabia 1,527 297 (D)
 United Arab Emirates -1 71 (D)
 Other 520 62 (D)

Asia and Pacific 51,439 13,638 14,755
 Australia 8,145 2,242 4,843
 China 740 295 594
 Hong Kong 7,828 546 3,427
 India 179 68 236
 Indonesia 385 (D) 2,219
 Japan 20,685 8,646 (D)
 Korea, Republic of 91 510 (D)
 Malaysia 470 150 (D)
 New Zealand 3,291 (D) (D)
 Philippines 975 -15 308
 Singapore 6,217 908 282
 Taiwan 1,972 154 285
 Thailand 421 70 232
 Other 39 28 (D)

International(1) ... ... -283

Addenda:
 Eastern Europe(2) 3,505 179 905
 European Union (15)(3) 239,523 47,243 39,504
 OPEC(4) 3,305 1,292 (D)

(*) Less than $500,030 (+/-).

(D) Suppressed to avoid disclosure of data of individual companies.

(p) Preliminary.

(1.) "International" consists of affiliates that have operations
spanning more than one country and that are engaged in petroleum
shipping, other water transportation, or offshore oil and gas drilling.

(2.) "Eastern Europe" comprises Albania, Armenia, Azerbaijan, Belarus,
Bulgaria, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan,
Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovakia,
Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.

(3.) The European Union (15) comprises Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

(4.) OPEC is the Organization of Petroleum Exporting Countries. its
members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria,
Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.
Table 3.1.--Foreign Direct Investment Position in the
United States on a Historical-Cost Basis, 1999(r)

[Millions of dollars]

 Manufacturing

 All Petro- Food and
 industries leum Total kindred
 products

 All countries 965,632 51,890 399,525 19,599

Canada 76,526 2,926 34,116 953

Europe 670,030 46,792 310,205 15,988
 Austria 3,203 (D) 866 (D)
 Belgium 10,037 6 3,783 1
 Denmark 5,226 -2 1,322 507
 Finland 4,967 (D) 2,122 (D)
 France 82,276 (D) 54,781 2,690

 Germany 111,706 160 56,354 148
 Ireland 15,621 596 4,476 901
 Italy 4,709 (D) 957 88
 Liechtenstein 287 0 14 -1
 Luxembourg 57,047 (D) 44,751 37
 Netherlands 125,775 10,733 42,988 3,675

 Norway 3,089 255 1,805 (D)
 Spain 2,746 -6 982 14
 Sweden 20,843 (D) 10,992 0
 Switzerland 53,706 736 25,782 1,857
 United Kingdom 166,900 32,418 57,333 5,943
 Other 1,890 8 896 (D)

Latin America and Other
 Western Hemisphere 38,104 1,313 3,021 1,072

 South and Central America 8,365 -394 165 1,057
 Brazil 740 (D) -101 -7
 Mexico 1,730 -8 328 1,061
 Panama 5,475 14 114 1
 Venezuela -62 (D) -19 (*)
 Other 483 -11 -157 2

 Other Western Hemisphere 29,739 1,707 2,855 16
 Bahamas 1,581 (D) 135 (D)
 Bermuda 12,590 155 151 -72
 Netherlands Antilles 3,153 160 1,089 (D)
 United Kingdom Islands,
 Caribbean 11,082 979 1,472 58
 Other 1,334 (D) 8 18

Africa 1,547 18 234 (D)
 South Africa 421 1 -34 (D)
 Other 1,126 17 268 1

Middle East 4,432 847 808 (D)
 Israel 2,485 0 811 (D)
 Kuwait 916 (D) 1 0
 Lebanon 1 0 (D) 0
 Saudi Arabia 946 (D) -1 0
 United Arab Emirates 13 (D) -3 0
 Other 71 (D) (D) 0

Asia and Pacific 174,993 -5 51,141 1,578
 Australia 13,230 62 3,458 -124
 Hong Kong 883 (D) 251 (D)
 Japan 153,119 145 45,617 1,432
 Korea, Republic of 1,853 (D) 314 (D)
 Malaysia 71 (*) 19 -3
 New Zealand 425 0 11 (*)
 Philippines 101 (*) 16 0
 Singapore 1,370 -12 109 (D)
 Taiwan 2,990 -4 1,168 (*)
 Other 951 -19 177 (D)

Addenda:
 European Union (15)(1) 611,171 45,802 281,747 14,003
 OPEC(2) 2,129 375 -9 (*)

 Manufacturing

 Chemi- Primary
 cals and and
 allied fabricated Machinery
 products metals

 All countries 97,327 20,125 83,917

Canada 2,515 3,962 11,398

Europe 87,255 12,312 57,244
 Austria (D) (D) 210
 Belgium 3,002 (D) (D)
 Denmark 16 0 398
 Finland (D) (D) 136
 France 16,358 1,064 22,174

 Germany 18,667 2,097 6,293
 Ireland (D) (D) 1,340
 Italy 97 285 67
 Liechtenstein (*) (D) 6
 Luxembourg (D) 84 (D)
 Netherlands 11,343 1,162 7,654

 Norway 861 (D) 324
 Spain -17 (D) (*)
 Sweden 552 345 4,541
 Switzerland 14,154 940 1,736
 United Kingdom 19,350 3,718 10,204
 Other -20 7 74

Latin America and Other
 Western Hemisphere 927 262 628

 South and Central America -342 61 -260
 Brazil -82 41 -118
 Mexico (D) (D) -50
 Panama (D) (D) (*)
 Venezuela -10 0 -17
 Other -80 2 -74

 Other Western Hemisphere 1,268 201 888
 Bahamas 1 (D) (*)
 Bermuda (D) 3 (D)
 Netherlands Antilles 895 (D) (D)
 United Kingdom Islands,
 Caribbean (D) (D) 860
 Other -24 16 1

Africa (D) (D) -3
 South Africa -6 1 -3
 Other (D) (D) (*)

Middle East (D) (D) 496
 Israel (D) (D) 500
 Kuwait 1 0 (*)
 Lebanon 0 0 (D)
 Saudi Arabia (*) 0 -3
 United Arab Emirates -2 0 -1
 Other 0 (D) (D)

Asia and Pacific 6,107 3,634 14,153
 Australia 323 192 1,848
 Hong Kong -2 (D) (*)
 Japan 5,038 3,173 11,863
 Korea, Republic of (D) 138 -47
 Malaysia 3 1 -1
 New Zealand (D) (D) 9
 Philippines (*) (*) 11
 Singapore -61 (D) 104
 Taiwan 802 (*) 311
 Other -53 (D) 55

Addenda:
 European Union (15)(1) 72,253 10,887 55,111
 OPEC(2) -12 0 -20

 Manu-
 facturing

 Other Whole-
 manu- sale Retail
 facturing trade trade

 All countries 178,556 94,657 24,843

Canada 15,288 5,117 1,054

Europe 137,405 40,351 20,249
 Austria 457 334 (D)
 Belgium 492 93 (D)
 Denmark 402 3,493 9
 Finland 1,030 (D) (D)
 France 12,495 2,220 353

 Germany 29,148 10,987 1,905
 Ireland 1,642 2,192 (D)
 Italy 421 310 1,355
 Liechtenstein (D) 89 0
 Luxembourg (D) 1,457 (D)
 Netherlands 19,153 7,958 (D)

 Norway 70 -313 0
 Spain (D) 151 40
 Sweden 5,555 363 7
 Switzerland 7,094 2,645 423
 United Kingdom 18,118 5,823 4,179
 Other (D) (D) 0

Latin America and Other
 Western Hemisphere 132 2,905 838

 South and Central America -351 495 104
 Brazil 66 61 2
 Mexico -391 528 (D)
 Panama -26 -6 2
 Venezuela 7 4 0
 Other -7 -92 (D)

 Other Western Hemisphere 483 2,410 734
 Bahamas -2 243 (D)
 Bermuda 136 (D) 214
 Netherlands Antilles 200 (D) (D)
 United Kingdom Islands,
 Caribbean 152 1,546 292
 Other -3 (D) -16

Africa -19 410 19
 South Africa (D) (D) 0
 Other (D) (D) 19

Middle East 82 126 28
 Israel 81 135 (D)
 Kuwait 0 (*) 0
 Lebanon (*) 0 0
 Saudi Arabia 2 (D) (D)
 United Arab Emirates 0 0 (D)
 Other 0 (D) 0

Asia and Pacific 25,667 45,749 2,656
 Australia 1,219 29 12
 Hong Kong -8 252 2
 Japan 24,111 43,061 2,418
 Korea, Republic of 160 1,364 40
 Malaysia 19 8 118
 New Zealand 1 138 (D)
 Philippines 4 -25 0
 Singapore 38 175 (D)
 Taiwan 55 583 21
 Other 70 162 1

Addenda:
 European Union (15)(1) 129,494 37,695 19,826
 OPEC(2) 23 2 23

 Finance,
 except
 Deposi- deposi-
 tory tory
 institu- institu- Insurance
 tions tions

 All countries 61,539 62,450 85,290

Canada 3,160 9,433 6,899

Europe 44,041 30,758 68,694
 Austria (D) (D) 0
 Belgium (D) 2,422 (*)
 Denmark (D) (D) -4
 Finland (D) (D) (*)
 France 3,338 9,854 4,552

 Germany 14,085 5,482 10,565
 Ireland (D) 443 4,740
 Italy 1,175 (D) 290
 Liechtenstein 0 (D) 0
 Luxembourg 0 2,888 (D)
 Netherlands 14,593 3,609 24,257

 Norway (D) (D) 1
 Spain 1,307 (D) 158
 Sweden -21 (D) (D)
 Switzerland (D) 2,011 14,758
 United Kingdom 3,669 3,760 7,959
 Other 254 9 (D)

Latin America and Other
 Western Hemisphere 2,173 2,098 8,383

 South and Central America 1,616 598 (D)
 Brazil 413 (D) (D)
 Mexico 198 (D) 2
 Panama 49 223 (D)
 Venezuela 302 -1 7
 Other 654 (D) 5

 Other Western Hemisphere 557 1,500 (D)
 Bahamas (D) (D) 0
 Bermuda 21 -92 1,781
 Netherlands Antilles 98 22 -2
 United Kingdom Islands,
 Caribbean 419 (D) (D)
 Other (D) 20 (D)

Africa 60 65 (*)
 South Africa 0 (D) (*)
 Other 60 (D) 0

Middle East 1,091 280 0
 Israel 999 (D) 0
 Kuwait (D) (D) 0
 Lebanon 0 0 0
 Saudi Arabia 11 2 0
 United Arab Emirates (D) 1 0
 Other 49 (D) 0

Asia and Pacific 11,014 19,817 1,313
 Australia (D) 1,987 (D)
 Hong Kong 203 (D) 1
 Japan 7,362 17,851 1,099
 Korea, Republic of 183 73 (D)
 Malaysia (D) (D) 0
 New Zealand 0 0 (D)
 Philippines 112 5 1
 Singapore 142 7 (*)
 Taiwan 881 59 8
 Other 592 16 (D)

Addenda:
 European Union (15)(1) 40,355 28,609 53,900
 OPEC(2) 621 (D) 7

 Real Other
 estate Services industries

 All countries 40,248 60,878 84,311

Canada 5,886 387 7,548

Europe 14,433 49,822 44,684
 Austria 34 25 -8
 Belgium 38 2,054 665
 Denmark (D) 26 271
 Finland 12 11 (D)
 France (D) 3,269 2,903

 Germany 3,842 4,139 4,189
 Ireland 113 330 1,161
 Italy 78 124 78
 Liechtenstein 68 (D) 28
 Luxembourg 107 4,868 2,368
 Netherlands 5,991 4,542 (D)

 Norway 32 169 1,038
 Spain (D) (*) 96
 Sweden 959 (D) 375
 Switzerland 429 3,321 (D)
 United Kingdom 2,058 20,246 29,453
 Other 457 -16 7

Latin America and Other
 Western Hemisphere 5,168 2,375 9,830

 South and Central America 201 216 (D)
 Brazil -7 (*) 2
 Mexico 18 165 386
 Panama 195 (D) (D)
 Venezuela -16 1 (D)
 Other 12 (D) -1)

 Other Western Hemisphere 4,967 2,159 (D)
 Bahamas 416 245 -76
 Bermuda 617 321 (D)
 Netherlands Antilles 1,088 182 100
 United Kingdom Islands,
 Caribbean 2,746 1,316 (D)
 Other 101 95 2

Africa 196 201 345
 South Africa -5 (D) (D)
 Other 201 (D) (D)

Middle East 932 155 165
 Israel (D) 64 (D)
 Kuwait 831 (D) (*)
 Lebanon (D) 0 (*)
 Saudi Arabia 55 (D) -9
 United Arab Emirates 10 0 2
 Other 25 11 (D)

Asia and Pacific 13,632 7,938 21,739
 Australia 881 149 4,946
 Hong Kong 160 85 -87
 Japan 10,799 7,416 17,352
 Korea, Republic of 36 -5 6
 Malaysia (*) 108 -4
 New Zealand 77 -1 179
 Philippines 3 (*) -10
 Singapore (D) 35 -699
 Taiwan 47 149 76
 Other (D) 1 -20

Addenda:
 European Union (15)(1) 13,716 46,345 43,177
 OPEC(2) 919 (D) 88

(*) Less than $500,000 (+/-).

(D) Suppressed to avoid disclosure of data of individual companies.

(r) Revised.

(1.) The European Union (15) comprises Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

(2.) OPEC is the Organization of Petroleum Exporting Countries. Its
members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria,
Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.
Table 3.2.--Foreign Direct Investment Position in the United
States on a Historical-Cost Basis, 2000(p)

[Millions of dollars]

 Manufacturing

 Food and
 All Petro- kindred
 industries leum Total products

 All countries 1,238,627 92,856 496,578 23,442

Canada 100,822 4,508 50,117 1,819

Europe 890,611 82,563 384,368 17,733
 Austria 3,172 0 943 0
 Belgium 14,186 4 6,688 5
 Denmark 5,905 (*) 3,675 498
 Finland 5,473 (D) 2,191 (D)
 France 119,069 (D) 66,056 3,905

 Germany 122,846 232 59,824 141
 Ireland 23,031 (D) 6,333 461
 Italy 6,409 (D) 1,064 124
 Liechtenstein 276 0 -10 -1
 Luxembourg 83,304 (D) 63,685 (D)
 Netherlands 152,432 13,195 50,840 3,688

 Norway 2,441 (D) 2,079 3
 Spain 8,860 -1 1,172 (D)
 Sweden 27,389 (D) 12,711 0
 Switzerland 81,698 1,107 36,594 1,602
 United Kingdom 229,762 66,086 67,881 7,054
 Other 4,357 713 2,643 57

Latin America and Other
 Western Hemisphere 42,700 1,563 3,891 998

 South and Central
 America 8,671 504 -2,392 995
 Brazil 846 (D) -290 -7
 Mexico 2,471 -5 258 1,000
 Panama 4,004 24 (D) 2
 Venezuela 826 (D) -8 (*)
 Other 525 -6 (D) 1

 Other Western
 Hemisphere 34,029 1,059 6,283 2
 Bahamas 1,385 (D) 294 11
 Bermuda 14,942 196 1,142 -66
 Netherlands Antilles 3,515 (D) 793 (D)
 United Kingdom
 Islands, Caribbean 12,513 281 3,997 29
 Other 1,674 96 57 (D)

Africa 2,119 (D) 168 (D)
 South Africa 663 -1 -96 (D)
 Other 1,456 (D) 264 (*)

Middle East 8,373 (D) 1,253 (D)
 Israel 3,183 0 1,258 (D)
 Kuwait 957 -5 2 0
 Lebanon 1 0 (D) 0
 Saudi Arabia (D) (D) -4 0
 United Arab Emirates 79 54 -5 0
 Other (D) -5 (D) 0

Asia and Pacific 194,002 147 56,781 2,883
 Australia 14,487 62 5,491 (D)
 Hong Kong 1,494 (D) 491 (D)
 Japan 163,215 602 43,724 1,464
 Korea, Republic of 2,696 (D) 1,017 (D)
 Malaysia 36 -6 4 -2
 New Zealand 387 0 6 (*)
 Philippines 27 (*) (*) 0
 Singapore 7,661 10 (D) 3
 Taiwan 3,224 -4 1,179 -1
 Other 774 -53 (D) (*)

Addenda:
 European Union (15)(1) 802,712 80,674 343,853 16,075
 OPEC(2) 6,220 (D) -10 (*)

 Manufacturing

 Primary
 Chemi- and
 cals and fab- Machin- Other
 allied ricated ery manu-
 products metals facturing

 All countries 122,083 21,561 118,920 210,571

Canada 2,889 3,995 26,914 14,500

Europe 113,798 14,321 72,241 166,275
 Austria -7 124 197 630
 Belgium (D) (D) 1,082 316
 Denmark 25 0 561 2,592
 Finland (D) 482 284 1,037
 France 22,805 1,388 24,322 13,636

 Germany 17,379 1,959 11,268 29,076
 Ireland -19 534 1,300 4,058
 Italy 70 222 298 350
 Liechtenstein (*) (D) 3 (D)
 Luxembourg (D) 93 4,059 56,937
 Netherlands 23,604 1,234 8,863 13,452

 Norway 1,028 (D) 112 (D)
 Spain -9 (D) -3 579
 Sweden (D) (D) 4,388 7,089
 Switzerland 21,156 1,109 2,789 9,937
 United Kingdom 19,759 4,505 11,666 24,896
 Other -46 5 1,051 1,576

Latin America and Other
 Western Hemisphere -1,098 293 2,348 1,350

 South and Central
 America -2,604 89 -371 -502
 Brazil -99 6 -181 -9
 Mexico (D) (D) -55 -472
 Panama (D) (D) (*) -29
 Venezuela 7 0 -22 7
 Other (D) 3 -113 1

 Other Western
 Hemisphere 1,506 204 2,719 1,852
 Bahamas 1 (D) (*) (D)
 Bermuda (D) 3 (D) (D)
 Netherlands Antilles (D) (D) (D) 212
 United Kingdom
 Islanda, Caribbean 735 84 2,694 455
 Other -6 2 1 (D)

Africa 260 (D) -4 -12
 South Africa (D) 0 -1 -16
 Other (D) (D) -3 4

Middle East 219 (D) 921 103
 Israel 221 (D) 926 102
 Kuwait (*) 0 2 0
 Lebanon 0 0 (D) (*)
 Saudi Arabia (*) 0 -5 2
 United Arab Emirates -2 0 -3 0
 Other 0 (D) (D) 0

Asia and Pacific 6,015 3,028 16,500 28,355
 Australia 178 209 (D) 2,046
 Hong Kong (*) (D) 236 -12
 Japan 5,188 2,528 8,457 26,087
 Korea, Republic of 48 168 696 (D)
 Malaysia (*) 1 -13 18
 New Zealand -4 (*) 3 7
 Philippines 2 1 -4 1
 Singapore -113 (D) (D) 34
 Taiwan 782 (*) 342 56
 Other -66 (D) -10 (D)

Addenda:
 European Union (15)(1) 91,649 12,398 68,325 155,407
 OPEC(2) -5 0 -28 23

 Finance,
 Deposi- except
 Whole- Retail tory deposi-
 sale trade institu- tory
 trade tions institu-
 tions

 All countries 109,611 32,091 68,619 88,082

Canada 3,565 999 3,191 11,443

Europe 50,028 26,846 50,686 52,488
 Austria 385 (D) (D) (D)
 Belgium 577 (D) (D) 2,417
 Denmark 1,656 11 (D) (D)
 Finland 2,485 (D) (D) 33
 France 2,947 335 2,955 (D)

 Germany 10,039 2,049 19,124 4,693
 Ireland 7,025 (D) (D) (D)
 Italy 212 1,884 1,171 (D)
 Liechtenstein 111 0 0 (D)
 Luxembourg 1,514 289 0 2,371
 Netherlands 7,673 14,080 12,340 6,313

 Norway -437 (*) (D) (D)
 Spain 143 (D) 1,371 3
 Sweden (D) 12 -135 (D)
 Switzerland 3,632 566 (D) (D)
 United Kingdom 6,993 5,039 6,818 7,758
 Other (D) 0 361 (D)

Latin America and Other
 Western Hemisphere 3,503 1,583 2,597 1,794

 South and Central
 America 569 (D) 2,025 608
 Brazil 78 3 424 (D)
 Mexico 533 (D) 267 (D)
 Panama -35 2 57 (D)
 Venezuela 2 (*) 582 -1
 Other -9 (D) 696 45

 Other Western
 Hemisphere 2,933 (D) 572 1,187
 Bahamas 262 (D) (D) (D)
 Bermuda (D) 166 (D) (D)
 Netherlands Antilles 484 (D) 161 22
 United Kingdom
 Islanda, Caribbean 1,652 315 240 1,329
 Other (D) (D) (D) 20

Africa 344 (D) (D) (D)
 South Africa (D) 0 0 (D)
 Other (D) (D) (D) (D)

Middle East 154 (D) (D) (D)
 Israel 155 5 1,107 (D)
 Kuwait (*) 0 (D) 1
 Lebanon 0 0 0 0
 Saudi Arabia 0 (D) (D) 2
 United Arab Emirates (*) (D) (D) 1
 Other -1 0 49 (D)

Asia and Pacific 52,018 2,605 10,869 21,470
 Australia 84 10 (D) 1,914
 Hong Kong 406 2 207 8
 Japan 48,424 2,356 7,258 19,597
 Korea, Republic of 1,727 41 247 (D)
 Malaysia 11 (D) (D) (D)
 New Zealand 228 (D) 0 0
 Philippines 8 0 (D) 7
 Singapore 178 35 169 7
 Taiwan 722 21 878 65
 Other 226 4 553 16

Addenda:
 European Union (15)(1) 45,996 26,280 45,994 36,577
 OPEC(2) 2 (D) 909 3

 Insur- Real Other
 ance estate Services industries

 All countries 106,403 42,300 102,955 99,134

Canada 8,229 5,887 2,145 10,739

Europe 87,376 15,578 90,346 50,331
 Austria (D) 36 (D) -18
 Belgium -1 38 2,599 495
 Denmark -4 (D) 23 434
 Finland (*) (D) (D) 543
 France 13,256 (D) (D) 4,710

 Germany 13,709 4,386 4,823 3,969
 Ireland (D) (D) 291 1,102
 Italy (D) 80 40 (D)
 Liechtenstein 0 67 (D) 28
 Luxembourg (D) 102 8,989 (D)
 Netherlands 28,125 5,682 12,410 1,774

 Norway (*) 31 175 (D)
 Spain 280 50 (D) 107
 Sweden (D) (D) 7,613 392
 Switzerland 15,370 481 3,743 (D)
 United Kingdom 9,261 2,583 27,553 29,791
 Other 15 674 (D) 17

Latin America and Other
 Western Hemisphere 9,440 5,598 1,875 10,854

 South and Central
 America (D) 195 288 503
 Brazil (D) 13 -13 -22
 Mexico (*) 14 269 293
 Panama (D) 174 33 (D)
 Venezuela 3 -21 -8 (D)
 Other -1 15 8 -14

 Other Western
 Hemisphere (D) 5,403 1,588 10,351
 Bahamas 0 378 11 -94
 Bermuda 1,954 387 412 10,670
 Netherlands Antilles -2 1,224 194 185
 United Kingdom
 Islands, Caribbean (D) 3,313 863 (D)
 Other (D) 101 107 (D)

Africa (*) 226 389 259
 South Africa (*) (D) 351 -1
 Other 0 (D) 38 260

Middle East 0 978 146 282
 Israel 0 (D) 50 329
 Kuwait 0 (D) (D) -1
 Lebanon 0 (D) 0 (*)
 Saudi Arabia 0 55 (D) -13
 United Arab Emirates 0 10 0 -10
 Other 0 31 11 -22

Asia and Pacific 1,358 14,033 8,053 26,668
 Australia (D) (D) 119 4,036
 Hong Kong -1 162 87 (D)
 Japan 1,127 10,894 7,435 21,794
 Korea, Republic of 17 40 -7 8
 Malaysia 0 (*) 107 -1
 New Zealand 0 (D) -1 (D)
 Philippines 0 7 -1 (D)
 Singapore 1 (D) 75 (D)
 Taiwan (D) 56 240 (D)
 Other (D) 36 -1 -60

Addenda:
 European Union (15)(1) 71,991 14,603 87,281 49,463
 OPEC(2) 5 956 80 71

(*) Less than $500,000 (+/-).

(D) Suppressed to avoid disclosure of data of individual companies.

(p) Preliminary.

(1.) The European Union (15) companies Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

(2.) OPEC is the Organization of Petroleum Exporting Countries. Its
members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria,
Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela.

Acknowledgments

The data for the U.S. direct investment position abroad were drawn from BEA's quarterly survey of transactions between U.S. parent companies and their foreign affiliates. The survey was conducted under the supervision of Mark W. New, assisted by Howard S. Chenkin, Jennifer C. Chilzer, Laura A. Downey, Javier J. Hodge, Marie K. Laddomada, Sherry Lee, Leila C. Morrison, and Dwayne Torney. Computer programming for data estimation and tabulation was provided by Marie Colosimo.

The data for the foreign direct investment position in the United States were drawn from BEA's quarterly survey of transactions between U.S. affiliates of foreign companies and their foreign parents. The survey was conducted under the supervision of Gregory G. Fouch, assisted by Peter J. Fox, Michelle L. Granson, Y. Louise Ku-Graf, Tracy K. Leigh, Beverly E. Palmer, and Christine L. Perrone. Computer programming for data estimation and tabulation was provided by Karen E. Poffel, assisted by Neeta B. Kapoor.

(1.) In addition to these historical-cost position estimates, BEA also produces estimates on a current-cost and market-value basis. See the box "Alternative Measures of the Direct Investment Positions"

Alternative Measures of the Direct Investment Positions

This article presents the country and industry detail
underlying the two positions. The estimates are prepared
on a historical-cost basis, which is not adjusted
for inflation. Because most investments reflect price
levels of earlier periods, the estimates on this valuation
basis are less than the current and market values
of the positions. Current-cost and market-value estimates
of the positions are also prepared, but only at
an aggregate level. The revised estimates of the position
for 1999 and the preliminary estimates for 2000
are shown on all three valuation bases below. The
current-cost and market-value estimates are discussed
in "The International Investment Position of
the United States in 2000" in this issue.

Alternative Direct Investment Position Estimates,
1999 and 2000

[Millions of dollars]

 Changes in 2000
 (decrease (-))

 Position Valuation Position
 Valuation at Total Capital adjust- at
 method yearend flows ments yearend
 1999(r) 2000(p)

U.S. direct
 investment
 abroad:

 Historical
 cost 1,130,789 113,865 139,257 -25,392 1,244,654
 Current cost 1,327,954 117,223 152,437 -35,214 1,445,177
 Market value 2,613,175 -145,418 152,437 -297,855 2,467,757

Foreign direct
 investment
 in the
 United
 States:

 Historical
 cost 965,632 272,996 281,115 -8,119 1,238,627
 Current cost 1,094,439 275,066 287,655 -12,588 1,369,505
 Market value 2,805,221 -68,355 287,655 -356,010 2,736,866

(p) Preliminary.

(r) Revised.

(2.) New investment spending for FDIUS set a record in 2000. See Ned G. Howenstine, "Foreign Direct Investment in the United States: New Investment in 2000," SURVEY OF CURRENT BUSINESS 81 (June 2001): 27-34. According to the preliminary data from BEA's survey of new foreign direct investments, total outlays to acquire or establish U.S. businesses, including those financed by capital inflows from foreign parents, were up 17 percent to $320.9 billion in 2000 from $275.0 billion in 1999. These data cover only transactions involving U.S. businesses newly acquired or established by foreign direct investors and include financing other than that from the foreign parent, such as local borrowing by existing U.S. affiliates. In contrast, the changes in the FDIUS position reflect transactions of both new and existing U.S. affiliates with their foreign parents or other members of the foreign parent group and valuation adjustments, and exclude financing not provided by the foreign parent group.

Notwithstanding these differences, the two types of data are related. Any outlays to acquire or establish U.S. businesses that are funded by foreign parent groups are part of capital inflows for FDIUS, a component of the change in the position. Data from the new investments survey indicate that foreign parent groups funded $207.2 billion, or 65 percent, of outlays to acquire or establish new U.S. affiliates, compared with $219.5 billion, or 80 percent, in 1999.

(3.) The data on the FDIUS position are presented using industry classifications based on the 1987 Standard Industrial Classification (SIC). In the article on new foreign direct investments, the data on acquisitions and establishments by foreign investors in 2000 are presented using classifications derived from the North American Industry Classification System (NAICS); under the NAICS-based classifications, many of the communications-related investments are included in the sector "Information." In addition, petroleum is not treated as a separate major industry; instead, the various petroleum-related activities are distributed among the major NAICS industry groups to which they belong. (For details, see Ned G. Howenstine and Rosaria Troia, "Foreign Direct Investment in the United States: New Investment in 1999," SURVEY 80 (June 2000): 55-63.) In coming years, BEA will begin publishing the FDIUS and USDIA position and related capital-flow and income data on a NAICS basis.

(4.) For a discussion of the profitability of U.S. affiliates, see Raymond I. Mataloni, Jr., "An Examination of the Low Rates of Return of Foreign-Owned U.S. Companies," SURVEY 80 (March 2000): 55-73.

(5.) According to the Organisation for Economic Co-Operation and Development, Mexico s real gross domestic product (GDP) grew 5.2 percent in 2000-down slightly from 5.4 percent in 1999 but well above the average annual rate of 3.1 percent in 1990-98. According to estimates from BEA's international transactions accounts, Mexico's exports to the United States increased 24 percent in 2000.

(6.) The outflows were recorded as foreign securities transactions rather than as U.S. direct investment abroad because the exchange of stock did not result in any single U.S. investor owning as much as 10 percent of the shares of a foreign firm.

(7.) The large negative valuation adjustment in 1999 was due to the sizable premiums over book value that foreign investors paid for many of the finns acquired in that year, especially those in communications-related sectors of the economy. In 2000, despite the continued strong spending for acquisitions, many of the investments did not have such sizable premiums. The smaller premiums may have reflected the decline in U.S. stock prices during the latter part of the year.

(8.) BEA also prepares data on the FDIUS position by country of ultimate beneficial owner; the data are included in the detailed tables on FDIUS that are usually published in the September SURVEY.

(9.) A holding company is a company whose primary activity is holding the securities or financial assets of other companies. The increased use of holding-company affiliates is part of a broader trend in which U.S. parents own foreign affiliates who in turn own other foreign affiliates. This note focuses on holding-company affiliates because these affiliates have contributed the most to this trend.

(10.) This convention for allocating the USDIA position (and related flow) estimates by country and industry follows international guidelines, as reflected in the International Monetary Fund's Balance of Payments Manual, 5th edition.

(11.) See, for example, table 18 of "U.S. Direct Investment Abroad: Detail for Historical-Cost Position and Related Capital and Income Flows, 1999," SURVEY 80 (September 2000): 31-60.

(12.) For example, suppose that a U.S. parent company classified in chemical manufacturing has two directly held foreign affiliates, one classified in chemical manufacturing and the other in wholesale trade. By industry of parent, the position in (and income from) both affiliates would be classified in chemicals manufacturing; by industry of affiliate, the data for the chemical manufacturing affiliate would be classified in chemical manufacturing, and those for the other affiliate would be classified in wholesale trade.

(13.) In 1982, the correlation coefficient between the position and the net PP&E of affiliates, across 12 major industries, was .90 and highly significant statistically, but in 1994 (the most recent year for which estimates of the net PP&E of all affiliates are available), it was not significantly different from zero, statistically. Net PP&E was used for comparison because it closely reflects the countries and industries in which production of goods and services by affiliates occurs. Other F&O items exhibited similar patterns.

(14.) Factors other than the increased use of holding-company affiliates might also have contributed. For example, affiliates in manufacturing industries with above-average use of PP&E might have grown most rapidly, or affiliates in manufacturing industries might have become less reliant, compared to those in other industries, on their U.S. parent companies for financing. However, available evidence suggests that the increased use of holding-company affiliates was the primary factor.

(15.) In 1982, the correlation coefficient between the U.S. direct investment position abroad estimates and the PP&E estimates, across 12 major host countries, was .89 and highly significant statistically; in 1994, it was .82 and still highly significant.