ABSTRACT
The degree of integration between the United States and the European Community (E.C.) in terms of intra-industry trade and reciprocal foreign investment has grown enormously. This chapter explores the implications of the structural changes for international trade and trade liberalization. It attempts to provide an overview of developments in the multinational structure of agribusinesses with particular focus on the United States and the E.C. The chapter explores the question of whether direct foreign investment and expanded exports complement or substitute each other. It aims to develop a framework for exploring the question of whether multinational agribusiness firms prefer freer trade or protectionism. The chapter suggests that including multinational behavior in our international trade policy analysis should improve our understanding of why agricultural trade liberalization is so difficult. It discusses the evolution of the international structure of E.C. and US agribusiness, which reflects the strategic mechanisms used by food manufacturers in the global rivalry between firms of many nations.
