Do We Really Know that the WTO Increases Trade?
Andrew K. Rose
University of California - Haas School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)
HKIMR Working Paper No. 18/2002
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 50 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.
Number of Pages in PDF File: 38
Keywords: empirical, bilateral, panel, gravity, GATT, GSP, international, multilateral, panel
JEL Classification: F13, F15
Date posted: August 27, 2007