When congressional pressure last month forced the Arab company to drop its takeover of some operations at six U.S. ports, some warned of a backlash among offended foreign investors. But despite signs of rising protectionism in Congress, 57% of U.S. subsidiaries of foreign corporations expect to increase capital investment in the USA in the next 12 months vs. just 12% who plan to cut back.

"The CEOs believe the free-traders are going to prevail," says Nancy McLernon, a senior vice president of the Organization for International Investment, which surveyed its members.

OFII is a Washington, D.C.-based trade group that represents the U.S. offshoots of foreign multinationals, including Nokia, DaimlerChrysler and GlaxoSmithKline. The survey results are scheduled to be made public today before a House subcommittee hearing that will examine the role of foreign investment in the USA.

At the same time, 15 CEOs of foreign-owned U.S. units — from companies such as Panasonic, Total and ThyssenKrupp — will be meeting with congressional leaders and administration officials to discuss proposals to tighten government approvals of foreign takeovers of U.S. companies.

Some fear that new regulations could lead to lengthy delays on national-security grounds.

"We're not some foreign monster. ... We pay taxes. We're your neighbors," says Joseph Taylor, president of Panasonic Industrial in Secaucus, N.J.

Congress began moving to reform the inter-agency Committee on Foreign Investment in the United States after the disclosure in February that it had approved the Dubai Ports World deal.

Congressional opposition ultimately forced the Dubai firm to agree to sell off its interests in the U.S. ports.

President Bush is due to rule Friday on another proposed acquisition by a Dubai company of a British firm that makes turbine fans for U.S. M-1 Abrams tanks.

In the survey, CEOs gave the USA high marks for a skilled workforce and stable political environment while complaining about soaring medical costs and lawsuits.

Still, the survey does not address the ports controversy's potential impact on new investments by companies not yet doing business in the USA. And not everyone is as sanguine as the surveyed CEOs.

William Overholt, director of Rand's Center for Asia Pacific Policy, worries over opposition to cross-border mergers in Europe, rising protectionism in Congress and China's failure to resolve currency and copyright issues.

"I'm very concerned that the whole globalization process ... is potentially at a turning point. ... On three continents, we face risks and difficulties," says Overholt, a former investment banker.