ABSTRACT
The food processing industries of the United States are characterized by trade barriers that are more restrictive than most manufacturing industries (Lavergne 1983; Ray 1990). These trade barriers, which include nominal tariffs and nontariff barriers (NTBs), act as entry barriers from the standpoint of foreign competitors. The strategic implication is that firms will spend resources to compete in the political arena to influence trade barriers in their favor, instead of concentrating their efforts on regular market competition, such as pricing and other nonprice strategies. As a result, a significant redistribution of wealth may occur as trade barriers increase prices and food processing industry profits at the expense of domestic consumers. In addition, resources are spent on unproductive activities, such as lobbying, which may result in a decline in overall economic efficiency (Lopez and Pagoulatos 1994).
