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New Evidence on WTO Membership After the Uruguay Round: An Analysis at the Sectoral Level

Author

Listed:
  • Lourenço S. Paz

    (Baylor University
    One Bear Place)

  • Magnus Reis

    (Unisinos)

  • André Filipe Zago Azevedo

    (CNPq
    Universidade Federal de Pelotas (UFPEL))

Abstract

The creation of the World Trade Organization in 1995 brought several changes to the world trade system, including more stringent accession commitments, separate agreements for agricultural products and for textiles and garment. This study examines the effects of WTO membership on disaggregated sectoral trade flows and their extensive and intensive margins by means of a gravity model estimated by Poisson pseudo-maximum likelihood. We employ a panel dataset on bilateral imports for agriculture, textile, and manufacturing sectors for the 1995–2017 period. Our estimates suggest that WTO membership has succeeded in expanding trade flows for new members. Nevertheless, this growth occurred asymmetrically between developed and developing countries, and among the different types of products. In the period under review, developing countries benefited most from this WTO-promoted increase in world trade, in stark contrast to the findings of the extant literature for 1950–2000. The largest trade growth occurred in the agriculture sector, which is also at odds with earlier findings of growth in manufacturing products only. Furthermore, our results show that the increase in trade due to WTO liberalization took place exclusively in the extensive margin of trade, most of which also happened in the agricultural sector.

Suggested Citation

  • Lourenço S. Paz & Magnus Reis & André Filipe Zago Azevedo, 2024. "New Evidence on WTO Membership After the Uruguay Round: An Analysis at the Sectoral Level," Open Economies Review, Springer, vol. 35(1), pages 1-39, February.
    • Handle: RePEc:kap:openec:v:35:y:2024:i:1:d:10.1007_s11079-023-09717-6
    DOI: 10.1007/s11079-023-09717-6
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    More about this item

    Keywords

    Extensive margin; Gravity model; Intensive margin; Poisson pseudo-maximum likelihood; World Trade Organization;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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