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Do We Really Know that the WTO Increases Trade?

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Rose, Andrew K

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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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Related research
Keywords: bilateral empirical GATT gravity GSP international multilateral panel

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Find related papers by JEL classification:
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
F15 - International Economics - - Trade - - - Economic Integration

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References listed on IDEAS
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  1. 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. [Downloadable!] (restricted)
  2. Pritchett, Lant, 1996. "Measuring outward orientation in LDCs: Can it be done?," Journal of Development Economics, Elsevier, vol. 49(2), pages 307-335, May. [Downloadable!] (restricted)
  3. Francisco Rodriguez & Dani Rodrik, 1999. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-national Evidence," Electronic Working Papers 99-003, University of Maryland, Department of Economics. [Downloadable!]
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  4. 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!] (restricted)
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  5. Kearl, J R, et al, 1979. "A Confusion of Economists?," American Economic Review, American Economic Association, vol. 69(2), pages 28-37, May. [Downloadable!] (restricted)
  6. Gourieroux, Christian & Monfort, Alain, 1981. "On the Problem of Missing Data in Linear Models," Review of Economic Studies, Blackwell Publishing, vol. 48(4), pages 579-86, October. [Downloadable!] (restricted)
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