Recent Trends in U.S. Trade and Investment

This paper reviews some of the main recent developments in U.S.trade and overseas investment against the background of long-term trends.The United States, and particularly the agricultural sector, has become more linked with the rest of the world. The commodity distributionof trade has moved toward being in large part an exchange of U.S. manufactured goods for other countriest manufactures even though the shareof developed countries in U.S. trade has declined. The fall in the U.S.share of world trade which began around 1950 has slowed down or evenstopped, as has the fall in the terms of trade of the United States andother developed countries.The U.S. share of new direct investment outflows has fallen while that of Japan and Germany have increased, but the United States has become one of the major recipients of direct investment from other countries. U.S. firms have increasingly accepted less than 100 per cent or even majority ownership, but majority ownership is still the usual form,by a large margin, in industries in which technology is important.U.S.-owned affiliates in foreign countries, particularly those in the smaller Asian countries, have shifted their activities towards exporting.In most areas U.S. affiliates increased their exports more in recent years than did other firms in their host countries, thus increasing their share of exports from these countries.