Limit Foreign Control of Key Industries

Deardorff (2001) stated that, direct foreign investments refer to the particular countries and kinds of countries toward which a country's exports are sent, and from which its imports are brought, in contrast to the commodity composition of its exports and imports. Besides, direct foreign investments also can be defined as the situation in which a foreign investor owns10% or more of the ordinary shares or voting power of a local company. Thus, the pattern that the direct foreign investments follow is that of a bilateral trade.

Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products. (example: McDonald 's)

He argued that three conditions all need to be present for a firm to have a strong motive to undertake direct investment. He named these three components as the “OLI” framework which means ownership advantages, location advantages and internalisation advantages.

Therefore when the investors are deprived off their firms they will loose and the individuals, government or investors who are accorded the firm will gain.

Foreign investment is an important part of our economy. There are many benefits to foreign investment in any country. It would be very difficult or impossible today to close the doors to foreign investment. The fact is foreign investment is responsible for providing a great deal of needed capital in this country. This capital is an asset in the continuous modernization and expansion of our manufacturing and other productive facilities. Without investment in our factories and processes we would fall behind in the world market. These investments lead to increased competitiveness within the international community.

Countries would participate in foreign direct investments because it helps in the economic development of the country where the investment is being made. They also engage in FDI to reduce production costs.

Even though Canadian government are showing protective approach presently because of several factors that have affected the land, and has taken the country 's wealth to other country. But some believe that because of the foreign investment the wealth of the country has increased, and this has contributed to the overall development of the Canada and the world. Today, there are so much investment done and this looks like it is going to increase in future, and this has showed sign of rejection from the country’s environmentalists because it is taking away the natural resources and polluting the environment. Even though the nation has been benefited, there is contrary feeling towards it. On the other hand, government are taking steps to make sure that too much power or all assets are not handled by foreign companies. But some economists believe the rules and regulations of the government in the past has benefited and supported foreign firms rather than domestic firms, because they were trying to cut down the expenses and increase profit in the form of tax. So, the Gray report puts forward the following policy which suggest Canadians to posses high command over the business and environment, increase the profit and reduce the harm of foreign direct investment, and to hold and expand Canadian control where there is need and can be controlled. The problem that worries the government in the past was foreign investors take domestic

The United States is both the world’s largest foreign direct investor and the largest beneficiary of foreign direct investment. While there may be many positive advantages to foreign investments, such as: increased productivity and economic development simulation, there are and equal amount, if not more, disadvantages. Direct foreign investments cause less domestic investments to occur within the United States and they could possibly even lead to Modern-Day Economic Colonialism. The United States Foreign Policy is a guideline that limits and allows overseas trade within the country. It is used to as a form of security to protect the United States' well-being, to make sure that trade with other countries and organizations won't jeopardize the

Many governments, especially in industrialized and developed nations, pay very close attention to foreign direct investment because the investment flows into and out of their economies can and does have a significant impact.

Imposing barriers is a policy passed by the government to discourage imports from the foreign countries. Since every government has a responsibility to safeguard the wellbeing of its people, it is very importation for government to quickly take care of situations where the country is not necessarily profiting from international trade and take required actions as quickly as possible. Restrictions on overseas companies are tend to protect country’s own interest. There are so many reasons why sovereign government impose barriers. Some reasons are as follows.

In theory, the liberalization of FDI not only should benefit foreign investors, but also should help domestic economies share in the wealth derived from foreign investment. FDI, as a means of generating domestic revenue, may also serve as an effective means by which to redeploy those revenues into a nation's economic, social, and political infrastructures. "^^ Insofar as states restrict FDI in protectecl sectors, they may encourage it in less protected sectors.

FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)

The level of internationalisation around the globe has grown throughout the years, with advanced technologies the ease and ability to work with foreign countries has also grown. However, firms do not simply interact with each other with no outside party involvement; the government can be seen to play a large role in conducting international business. Governments continuously have the responsibility to act in the manner that they believe is best for their nation; this includes decisions regarding protectionism, which may serve to aid domestic industries but simultaneously hinder international business. It can be seen that governments do not always act in their nation’s best interest and are corrupt which can serve to increase the risks and costs of entering an international business environment. While these are examples in which the government makes international business difficult it can also be seen that the presence of a government is instrumental in creating international business effectiveness, whether this be through their legal system or from trade agreements. This makes the role the government plays paradoxical; as their involvement generally increases the risks and costs of firms seeking to internationalise, whilst simultaneously playing a significant role in creating international business effectiveness.

Foreign direct investment has many forms. Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra-company loans".

Well known companies like Nike, Microsoft, Sony, Shell Group are just some of the big companies that went global and expanded their trading around the world, they are large businesses that operate internationally in many countries. Development of worldwide integration urges companies to reach out international markets and interact with foreign customers. Businesses focus on fulfilling the demand of the market by its products or services, besides their target is increasing profit, in order achieve these goals they favor to expand their work in a foreign market. Other reasons to internationalize their business may be to become