Working Paper: NBER ID: w10024
Authors: Arvind Subramanian; Shangjin Wei
Abstract: Contrary to the recent literature that concludes that the GATT/WTO has been completely ineffective in promoting world trade, this paper furnishes robust evidence that the institution has had a powerful and positive impact on trade. The impact has, however, been uneven. GATT/WTO membership for industrial countries has been associated with a large increase in imports estimated at about 44 percent of world trade. The same has not been true for developing country members, although those that joined after the Uruguay Round have benefited from increased imports. Similarly, there has been an asymmetric impact between sectors. These results are consistent with the history and design of the institution.
Keywords: WTO; Trade; Developing Countries; Econometrics; Gravity Model
JEL Codes: F1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| WTO membership (F13) | increase in world imports (F69) |
| WTO membership (F13) | asymmetries in trade liberalization outcomes (F13) |
| asymmetries between developed and developing countries (F63) | uneven benefits from WTO liberalization (F69) |
| asymmetries between developing countries that joined before and after the Uruguay Round (F63) | greater liberalization obligations for new members (F55) |
| WTO effectiveness in reducing trade barriers (F13) | sectoral differences in trade outcomes (F12) |
| historical obligations and special and differential treatment (F13) | influence on developing country trade patterns (F63) |