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The GATT/WTO has promoted trade, but only in capital-intensive commodities!

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  • Hans-Jurgen Engelbrecht
  • Christopher Pearce

Abstract

This article uses gravity models to explore the impact of the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WHO) on bilateral trade in a sample of 46 countries over the period 1965 to 1997. Our data enable us to disaggregate trade by broad commodity aggregates. The results for total trade are similar to those reported by Rose (2004). However, the disaggregated estimates reveal that the GATT/WTO has had a positive and statistically significant impact on trade in capital-intensive commodities, but no statistically significant impact on trade in other commodities. The article demonstrates that simple modifications of Rose's approach lead to results that are much more 'common sense' than his (JEL F10, F15).

Suggested Citation

  • Hans-Jurgen Engelbrecht & Christopher Pearce, 2007. "The GATT/WTO has promoted trade, but only in capital-intensive commodities!," Applied Economics, Taylor & Francis Journals, vol. 39(12), pages 1573-1581.
  • Handle: RePEc:taf:applec:v:39:y:2007:i:12:p:1573-1581
    DOI: 10.1080/00036840600592874
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    References listed on IDEAS

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    1. 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.
    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.
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    Cited by:

    1. Jason H. Grant & Kathryn A. Boys, 2012. "Agricultural Trade and the GATT/WTO: Does Membership Make a Difference?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(1), pages 1-24.
    2. Greenaway, David & Mahabir, Aruneema & Milner, Chris, 2008. "Has China displaced other Asian countries' exports?," China Economic Review, Elsevier, vol. 19(2), pages 152-169, June.
    3. Kazunobu Hayakawa & Hyun-Hoon Lee & Donghyun Park, 2014. "Do Export Promotion Agencies Increase Exports?," The Developing Economies, Institute of Developing Economies, vol. 52(3), pages 241-261, September.
    4. Kazunobu Hayakawa & Hyun-Hoon Lee & Donghyun Park, 2014. "Are Investment Promotion Agencies Effective in Promoting Outward Foreign Direct Investment? The Cases of Japan and Korea," Asian Economic Journal, East Asian Economic Association, vol. 28(2), pages 111-138, June.
    5. Mujahid, Irfan & Kalkuhl, Matthias, 2015. "Do the WTO and RTAs Promote Food Trade?," 2015 Conference, August 9-14, 2015, Milan, Italy 212509, International Association of Agricultural Economists.
    6. Kazunobu Hayakawa & Fukunari Kimura, 2015. "How Much Do Free Trade Agreements Reduce Impediments to Trade?," Open Economies Review, Springer, vol. 26(4), pages 711-729, September.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F15 - International Economics - - Trade - - - Economic Integration

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