ABSTRACT
A number of important changes have been on-going in international agricultural markets, and especially for trade in processed food products. Over the last fifteen years, high-value agricultural trade has been growing substantially more rapidly than trade in bulk commodities. The value of U.S. exports of high-value agricultural products now exceeds that of commodity exports, a situation reached much earlier in the European Union (MacDonald and Lee 1994). This trend toward greater trade in high value products must be kept in perspective, as Handy and Henderson (1994) note, domestic sales of foreign owned subsidiaries of U.S. multinationals are roughly four times the magnitude of exports for processed food products. Thus, the tendency to invest abroad is much stronger than to service foreign markets by exporting. This alternative to trade is an important and growing phenomenon, and may be a complementary rather than competitive firm strategy.
