Discussion Paper Details

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Title: Do We Really Know that the WTO Increases Trade?

Author(s): Andrew K Rose

Publication Date: September 2002

Keyword(s): bilateral, empirical, GATT, gravity, GSP, international, multilateral and panel

Programme Area(s): International Macroeconomics and International Trade and Regional Economics

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.

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Bibliographic Reference

Rose, A. 2002. 'Do We Really Know that the WTO Increases Trade?'. London, Centre for Economic Policy Research.