THE GATT/WTO HAS PROMOTED TRADE, BUT ONLY IN CAPITAL-INTENSIVE COMMODITIES!

This paper contributes to the recent empirical debate about the effectiveness of the GATT and the WTO in promoting trade. We use gravity models to explore the impact of the GATT/WTO on bilateral trade in a sample of 46 countries over the period 1965-1997. Our data enable us to disaggregate trade by broad commodity aggregates. The results for total trade are similar to those reported by Rose (2004). However, the disaggregated estimates reveal that the GATT/WTO has had a positive and statistically significant impact on trade in capital-intensive commodities, but that it has had no statistically significant impact on trade in other commodities. The paper demonstrates that simple modifications of Rose's approach lead to results that are much more 'common sense' than his.


Issue Date:
2004
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/23707
Total Pages:
18
JEL Codes:
F10; F15
Series Statement:
Discussion Paper 04.11




 Record created 2017-04-01, last modified 2017-08-24

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