Journal article
On the trade effects of GATT/WTO membership: They are positive and large after all
The Canadian journal of economics, v 58(1), pp 281-328
Feb 2025
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
The existing empirical literature on impact of GATT/WTO membership on international trade is mixed. This paper contributes to solving the puzzle of “the missing GATT/WTO effects” by adhering closely to the theoretical foundations of the gravity model of trade. Capitalizing on the latest developments in the empirical trade literature and building a new and large data set covering 186 countries over the period 1980–2016, we estimate a theory‐consistent gravity equation, which includes intra‐national in addition to international trade flows. We find that joining GATT/WTO increased partial equilibrium trade between members by 140%. Our methods also deliver novel estimates of the impact of GATT/WTO on trade between members and non‐member countries, indicating an increase of 72%. Résumé La littérature empirique existante sur l'impact de l'adhésion au GATT/OMC sur le commerce international est mitigé. Cet article contribue à résoudre l'énigme de « l'absence d'effets du GATT/OMC » en adhérant scrupuleusement aux fondements théoriques du modèle gravitationnel du commerce. En capitalisant sur les derniers développements de la littérature empirique sur le commerce et en construisant un nouvel ensemble de données couvrant 186 pays pour la période 1980‐2016, nous estimons une équation gravitationnelle cohérente avec la théorie, qui inclut les flux commerciaux intra‐nationaux en plus des flux commerciaux internationaux. Nos estimations d'équilibre partiel suggèrent que l'adhésion au GATT/OMC a augmenté le commerce entre les membres de 139 %. Nos méthodes permettent également d'obtenir de nouvelles estimations de l'impact de l'adhésion au GATT/OMC sur le commerce entre les membres et les non‐membres, montrant un augmentation de 72 %.
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Details
- Title
- On the trade effects of GATT/WTO membership: They are positive and large after all
- Creators
- Mario Larch - University of BayreuthJosé‐Antonio Monteiro - World Trade OrganizationRoberta Piermartini - World Trade OrganizationYoto V. Yotov - Drexel University, Economics (School of Economics)
- Publication Details
- The Canadian journal of economics, v 58(1), pp 281-328
- Number of pages
- 48
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:001432552800012
- Scopus ID
- 2-s2.0-105011597745
- Other Identifier
- 991022029671104721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Economics