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Do We Really Know that the WTO Increases Trade?

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  • Rose, Andrew K

Abstract

This Paper estimates the effect on international trade of multilateral trade agreements: the World Trade Organization (WTO), its predecessor the Generalized Agreement on Tariffs and Trade (GATT), and the Generalized System of Preferences (GSP) extended from rich countries to developing countries. I use a standard ‘gravity’ model of bilateral merchandise trade and a large panel data set covering over fifty years and 175 countries. Despite an extensive search, I am basically unable to find positive significant effects of GATT/WTO membership on trade. The GSP does seem to have a strong effect, and is associated with an approximate doubling of trade.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3538.

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Date of creation: Sep 2002
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Handle: RePEc:cpr:ceprdp:3538

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Keywords: bilateral; empirical; GATT; gravity; GSP; international; multilateral; panel;

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  1. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: a Skeptic's Guide to the Cross-National Evidence," Working Papers 9912, Economic Research Forum, revised Apr 1999.
  2. 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.
  3. Gourieroux, Christian & Monfort, Alain, 1981. "On the Problem of Missing Data in Linear Models," Review of Economic Studies, Wiley Blackwell, vol. 48(4), pages 579-86, October.
  4. Jeffrey A. Frankel, 1997. "Regional Trading Blocs in the World Economic System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 72, 1st quart.
  5. Alston, Richard M & Kearl, J R & Vaughan, Michael B, 1992. "Is There a Consensus among Economists in the 1990's?," American Economic Review, American Economic Association, vol. 82(2), pages 203-09, May.
  6. Kearl, J R, et al, 1979. "A Confusion of Economists?," American Economic Review, American Economic Association, vol. 69(2), pages 28-37, May.
  7. Alan V. Deardorff, 1995. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Working Papers 5377, National Bureau of Economic Research, Inc.
  8. Griliches, Zvi, 1986. "Economic data issues," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 3, chapter 25, pages 1465-1514 Elsevier.
  9. Pritchett, Lant, 1996. "Measuring outward orientation in LDCs: Can it be done?," Journal of Development Economics, Elsevier, vol. 49(2), pages 307-335, May.
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  1. Au fait, à quoi sert l'OMC exactement?
    by Alexandre Delaigue in Econoclaste on 2005-12-19 19:36:35
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