Trends in food quality regulation: implications for processed food trade and foreign direct investment

Foreign direct investment (FDI) has been increasing at a faster rate than direct exports of processed foods over the past decades. To what extent does national-level food quality regulation influence these trends? Although unquantified as to its impact, such national-level regulation is frequently cited as a potential source of nontariff barriers to trade for food products. FDI may allow food processors to avoid rules intended to disadvantage imported products by siting production within particular markets. It may also allow more precise and rapid adaptation to domestic quality regulations. We discuss what is known about the effect of national-level regulation on companies' strategies for operating in international markets