Do we know that the WTO increases trade?

The stated mission of the World Trade Organisation (WTO) and the General Agreement on Tariffs and Trade (GATT) that preceded it is ‘to open trade for the benefit of all’.  Rose (2004) questions whether the GATT/WTO is actually accomplishing its mission by showing that, surprisingly, member countries’ trade patterns are little different from those of non-members.  The subsequent debate has focused on differences in trade patterns of developed versus developing country members, arguing that while the GATT failed to promote trade among developing countries, it was successful at promoting trade between countries that are developed. This in turn raises the question of whether the WTO should promote trade among developed and developing countries alike, or whether equity implications of the MFN rule imply that developing countries should be exempted.

Bagwell K. and R. Staiger, (2011); “Can the Doha Round be a Development Round? Setting a Place at the Table” NBER Working Paper No. 17650.

Kennett M., S. J. Evenett and J. Gage , (2005); “Evaluating WTO accessions: legal and economic perspectives.” Geneva: Ideas Centre.

Lawrence R. (2003) Crimes and Punishments? Retaliation under the WTO. Institute of International Economics, Washington, D.C. [Earlier version]

Ludema R. & A. M. Mayda (2009) “Do Countries Free Ride on MFN?Journal of International Economics, 77(2), 137-150. [Earlier version]

Rose A. K., (2004); “Do we really know that the WTO increases trade?” American Economic Review, 94(1): 98-114. [Earlier version]

Rose A. K., (2004): “Response to Subramanian and Wei.”

Rose A. K. (2007); “Do We Really Know That the WTO Increases Trade? Reply.” American Economic Review, 97(5): 2019-2025. [Earlier version]

Saggi K. and F. Sengul , (2009); “On the emergence of an MFN club: equal treatment in an unequal world. Canadian Journal of Economics, 42(1): 267-299. [Earlier Version]

Subramanian A. and S.-J. Wei, (2007); “The WTO Promotes Trade, Strongly But Unevenly.”  Journal of International Economics, 72(1): 151-175. [Earlier version]

Tomz M., J.Goldstein and D. Rivers, (2007); “Do We Really Know That the WTO Increases Trade? Comment.”  American Economic Review, 97(5): 2005–18. [Earlier version]

Leave a Reply