Geographic patterns of commodity trade and foreign direct investment are not consistent with the proposition that European economies are experiencing a process of increasing ‘globalisation’. Internationalisauon is taking place as economic integration within the European Union. During the last 35 years, the European Union has not become relatively more integrated with the world's other trade blocs. Moreover, in contrast to what globalisation theory might cause us to predict, the share in foreign direct investment taken by low-wage countries shows little growth. We try to explain such findings, using arguments about the nature of the process of technological change.