New Evidence on WTO Membership After the Uruguay Round: An Analysis at the Sectoral Level

Lourenco Paz, Magnus Reis and André Filipe Zago Azevedo
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Magnus Reis: Unisinos
André Filipe Zago Azevedo: CNPq

Open Economies Review, 2024, vol. 35, issue 1, No 1, 39 pages

Abstract: Abstract The creation of the World Trade Organization in 1995 brought several changes to the world trade system, including more stringent accession commitments, separate agreements for agricultural products and for textiles and garment. This study examines the effects of WTO membership on disaggregated sectoral trade flows and their extensive and intensive margins by means of a gravity model estimated by Poisson pseudo-maximum likelihood. We employ a panel dataset on bilateral imports for agriculture, textile, and manufacturing sectors for the 1995–2017 period. Our estimates suggest that WTO membership has succeeded in expanding trade flows for new members. Nevertheless, this growth occurred asymmetrically between developed and developing countries, and among the different types of products. In the period under review, developing countries benefited most from this WTO-promoted increase in world trade, in stark contrast to the findings of the extant literature for 1950–2000. The largest trade growth occurred in the agriculture sector, which is also at odds with earlier findings of growth in manufacturing products only. Furthermore, our results show that the increase in trade due to WTO liberalization took place exclusively in the extensive margin of trade, most of which also happened in the agricultural sector.

Keywords: Extensive margin; Gravity model; Intensive margin; Poisson pseudo-maximum likelihood; World Trade Organization (search for similar items in EconPapers)
JEL-codes: F14 F15 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11079-023-09717-6

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