DP3538 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, panel|
|Programme Areas:||International Macroeconomics, International Trade and Regional Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=3538|
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.