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On the effects of GATT/WTO membership on trade: They are positive and large after all

Mario Larch, José-Antonio Monteiro, Roberta Piermartini and Yoto Yotov

No ERSD-2019-09, WTO Staff Working Papers from World Trade Organization (WTO), Economic Research and Statistics Division

Abstract: We capitalize on the latest developments in the empirical structural gravity literature to revisit the question of whether and how much does GATT/WTO membership affect international trade. We are the first to capture the non-discriminatory nature of GATT/WTO commitments by measuring the effects of GATT/WTO membership on international trade relative to domestic sales. These unilateral effects of GATT/WTO membership are found to be large, positive, and statistically significant. We also obtain bilateral GATT/WTO estimates, which are larger than those reported in the literature. In particular, our results imply that, on average, joining GATT and/or WTO has increased trade between members by 171% and trade between member and non-member countries by about 88%. We also find that although both GATT/WTO has been effective in promoting trade between members, the WTO has been more effective in promoting trade with non-members than GATT. A battery of sensitivity experiments confirms the effectiveness of our methods and robustness of our main findings.

Keywords: GATT/WTO; International Trade; Domestic Sales; Structural Gravity (search for similar items in EconPapers)
JEL-codes: F13 F14 F16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2019
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https://www.econstor.eu/bitstream/10419/200403/1/1668909715.pdf (application/pdf)

Related works:
Working Paper: On the Effects of GATT/WTO Membership on Trade: They Are Positive and Large after All (2019) Downloads
Working Paper: On the Effects of GATT/WTO Membership on Trade: They are Positive and Large After All (2019) Downloads
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