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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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Bibliographic Info

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. Barry Eichengreen & Douglas A. Irwin, 1998. "The Role of History in Bilateral Trade Flows," NBER Chapters, in: The Regionalization of the World Economy, pages 33-62 National Bureau of Economic Research, Inc.
  2. Rose, Andrew K, 2002. "Do We Really Know that the WTO Increases Trade?," CEPR Discussion Papers 3538, C.E.P.R. Discussion Papers.
  3. Subramanian, Arvind & Wei, Shang-Jin, 2005. "The WTO Promotes Trade, Strongly But Unevenly," CEPR Discussion Papers 5122, C.E.P.R. Discussion Papers.
  4. Joao Santos Silva & Silvana Tenreyro, 2005. "The log of gravity," LSE Research Online Documents on Economics 3744, London School of Economics and Political Science, LSE Library.
  5. James E. Anderson & Eric van Wincoop, 2001. "Gravity with Gravitas: A Solution to the Border Puzzle," NBER Working Papers 8079, National Bureau of Economic Research, Inc.
  6. Jason H. Grant & Dayton M. Lambert, 2008. "Do Regional Trade Agreements Increase Members' Agricultural Trade?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 765-782.
  7. Thierry Mayer & Soledad Zignago, 2011. "Notes on CEPII’s distances measures: The GeoDist database," Working Papers 2011-25, CEPII research center.
  8. Robert C. Feenstra & Robert E. Lipsey & Haiyan Deng & Alyson C. Ma & Hengyong Mo, 2005. "World Trade Flows: 1962-2000," NBER Working Papers 11040, National Bureau of Economic Research, Inc.
  9. Felbermayr, Gabriel & Kohler, Wilhelm K., 2006. "Exploring the intensive and extensive margins of world trade," Munich Reprints in Economics 20610, University of Munich, Department of Economics.
  10. Scott L. Baier & Jeffrey H. Bergstrand, 2005. "Do free trade agreements actually increase members’ international trade?," Working Paper 2005-03, Federal Reserve Bank of Atlanta.
  11. 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.
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