The article reviews recent developments in European Community (EC) agricultural markets and in the Common Agricultural Policy (CAP). In particular, the process of shaping CAP reform is extensively documented and commented on. It is seen as a means not so much to comply with national economic and external political requirements, but rather to continue agricultural protection for internal political reasons and to attempt to impose the Community's new position on the ongoing General Agreement on Tariffs and Trade (GA 11) negotiation of the Uruguay Round. With regard to the latter, attention is paid to the GATT questionnaire (Dunkel paper) and to the EC's response. Finally, new developments in the process of European integration (Single Market, EC enlargement, European Monetary Union) are summarised in view of some broad impacts on EC agriculture and food industries.