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Does the World Trade Organization Promote Trade? An Empirical Assessment of Agricultural and Non‐Agricultural Trade Flows

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Author Info
Grant, Jason H.
Boys, Kathryn A.
Abstract

In this paper we ask whether the GATT/WTO has actually failed to increase members’ agricultural trade. Surprisingly, there is very little empirical econometric support to shed light on this question despite the fact that agricultural trade is often at the forefront of multilateral negotiations. We address this issue by considering GATT/WTO effects across agricultural and non‐agricultural sectors. Despite much ‘hoopla and hype’ that the GATT/WTO has done nothing to boost members’ agricultural trade, our results suggest that the multilateral institution has delivered significant positive effects on agricultural trade over the period 1980‐2004. Moreover, in many cases the trade flow effect of membership in the GATT/WTO exceeds that of non‐agriculture, merchandise trade. The results have important policy implications when one considers the growing body of literature that often presumes that the GATT/WTO has done nothing to stimulate members' agricultural trade.

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Paper provided by Agricultural and Applied Economics Association in its series 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin with number 49510.

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Date of creation: 2009
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Handle: RePEc:ags:aaea09:49510

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Keywords: International Relations/Trade;

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  1. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March. [Downloadable!] (restricted)
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  2. Subramanian, Arvind & Wei, Shang-Jin, 2007. "The WTO promotes trade, strongly but unevenly," Journal of International Economics, Elsevier, vol. 72(1), pages 151-175, May. [Downloadable!] (restricted)
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  3. Michael Tomz & Judith L. Goldstein & Douglas Rivers, 2007. "Do We Really Know That the WTO Increases Trade? Comment," American Economic Review, American Economic Association, vol. 97(5), pages 2005-2018, December. [Downloadable!]
  4. Jason H. Grant & Dayton M. Lambert, 2008. "Do Regional Trade Agreements Increase Members' Agricultural Trade?," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 90(3), pages 765-782, 08. [Downloadable!] (restricted)
  5. Bernhard Herz & Marco Wagner, . "Do the World Trade Organization and the Generalized System of Preferences foster bilateral trade?," Macroeconomics, Department of Economics, Economics I, Bayreuth University. [Downloadable!]
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  6. Andrew K. Rose, 2004. "Do We Really Know That the WTO Increases Trade?," American Economic Review, American Economic Association, vol. 94(1), pages 98-114, March. [Downloadable!]
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  7. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March. [Downloadable!]
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  8. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, 09. [Downloadable!] (restricted)
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