Do We Really Know that the WTO Increases Trade?

Andrew Kenan Rose

145 citations0/0 files storedNational Bureau of Economic Research

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Global trade and economics World Trade Organization Law Global Trade and Competitiveness

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.An extensive search reveals little evidence that countries joining or belonging to the GATT/WTO have different trade patterns than outsiders.The GSP does seem to have a strong effect, and is associated with an approximate doubling of trade.

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References

2003Gravity with Gravitas: A Solution to the Border Puzzle 2000Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence 1998Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?1995Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?2001Gravity with Gravitas: A Solution to the Border Puzzle 1996Measuring outward orientation in LDCs: Can it be done?1992Is There a Consensus among Economists in the 1990's?2001Does a Currency Union Affect Trade? The Time Series Evidence

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