André Sapir produced this short paper at the request of Commissioner Mandelson for the Expert Seminar on Trade Defence Instruments at the European Commission.

This paper reviews the theory of foreign direct investment (FDI), focusing on an apparent con‡ict between theory and recent trends in the globalized world. The bulk of FDI is horizontal rather than vertical, but horizontal FDI is discouraged when trade costs fall. This seems to conflict with...

Comment on Trade and Investment: An American Perspective by G. Hufbauer and F. Neumann Old and New Issues in EC-US Trade Disputes by André Sapir

The economic changes during transition involved a shift away from the planned foreign trade organization within the council for mutual economic assistance. Following a phase of farreaching trade policy liberalization, the agricultural sector in the Central and Eastern European countries (CEEC)...

Croatia recently signed several trade liberalisation agreements. The cornerstones of its trade policy are WTO membership, the Stabilisation and Association Agreement with the EU and Croatia's application of membership as well as bilateral free trade agreements within the Stability Pact for South...