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Does the World Trade Organization Promote Trade? An Empirical Assessment of Agricultural and Non‐Agricultural Trade Flows

Author

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  • 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.

Suggested Citation

  • Grant, Jason H. & Boys, Kathryn A., 2009. "Does the World Trade Organization Promote Trade? An Empirical Assessment of Agricultural and Non‐Agricultural Trade Flows," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49510, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea09:49510
    DOI: 10.22004/ag.econ.49510
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    References listed on IDEAS

    as
    1. Gabriel J Felbermayr & Wilhelm Kohler, 2014. "Exploring the Intensive and Extensive Margins of World Trade," World Scientific Book Chapters, in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 4, pages 115-148, World Scientific Publishing Co. Pte. Ltd..
    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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    5. 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.
    6. Martin, Will & Pham, Cong S., 2008. "Estimating the gravity model when zero trade flows are frequent," Working Papers eco_2008_03, Deakin University, Department of Economics.
    7. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
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    9. 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.
    10. 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.
    11. repec:lmu:muenar:20646 is not listed on IDEAS
    12. 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.
    13. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
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    Cited by:

    1. Aaronson Susan Ariel & Abouharb M. Rodwan & Daniel Wang K., 2015. "The Liberal Illusion Is Not a Complete Delusion: The WTO Helps Member States Keep the Peace Only When It Increases Trade," Global Economy Journal, De Gruyter, vol. 15(4), pages 455-484, December.

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