Do We Really Know that the WTO Increases Trade?
NBER Working Paper No. 9273
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.
Published: Rose, Andrew K. "Do We Really Know That The WTO Increases Trade?," American Economic Review, 2004, v94(1,Mar), 98-114.