Trade policy under the GATT-WTO: empirical evidence of the equal treatment rule

A fundamental difference between multilateral trade agreements like the GATT and WTO and a preferential agreement is the multilateral agreements' inclusion of a most-favoured-nation principle. Though MFN requires that members implement policies that provide equal treatment to all GATT-WTO countries, how far do members actually follow the MFN principle when so required? We empirically investigate a sample of GATT-WTO trade disputes and the effect of successful dispute settlement negotiations on the disputed product trade of third country exporters to the defendant country. We document evidence of trade liberalization consistent with defendant countries successfully applying the equal treatment rule.