ABSTRACT
The purpose of this chapter is to review the effects of regional integration on the organization and structure of multinational enterprise (MNE) activity into and out of the European Community (EC)* and to compare and contrast these effects with those which might be expected to arise from a NAFTA. The first part of this chapter briefly outlines the similarities and differences between the kinds of economic integration forged by the two trading blocs. The second part theorizes on the likely consequences for foreign direct investment (FDI) arising from these interdependencies. The third part considers the role played by the changing regulatory environment in the EC for the intra-EC organization of MNE activity. The fourth part examines the evidence of the consequences of Mark I and Mark II European integration for the level, composition and organization of both EC- and non-EC-owned MNE operations. Finally, with this evidence in mind, the-fifth part speculates on the possible effects of a NAFTA both within the free trade area and between the participating countries and the rest of the world.
