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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.

Suggested Citation

  • Rose, Andrew K, 2002. "Do We Really Know that the WTO Increases Trade?," CEPR Discussion Papers 3538, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3538
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    References listed on IDEAS

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    1. 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.
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    7. Alan Deardorff, 1998. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Chapters,in: The Regionalization of the World Economy, pages 7-32 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.
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    More about this item

    Keywords

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

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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