Premium
Agricultural Trade and the GATT/WTO: Does Membership Make a Difference?
Author(s) -
Grant Jason H.,
Boys Kathryn A.
Publication year - 2012
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aar087
Subject(s) - agriculture , margin (machine learning) , gravity model of trade , international trade , economics , international economics , world trade , sample (material) , estimation , gravity equation , trade barrier , institution , panel data , bilateral trade , political science , econometrics , geography , law , chemistry , management , archaeology , chromatography , machine learning , computer science , china
Recent empirical studies have estimated the trade flow effect of membership in the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT). One important, although largely untested, conclusion from this literature is that the GATT/WTO works well if we ignore trade in agriculture ‐ one of the institutions seemingly apparent failures. This article investigates this conclusion using a large panel of agricultural and non‐agricultural trade flows. The results are impressive: the multilateral institution has delivered significant positive effects on members agricultural trade despite its sensitive nature and the reluctance of members to undertake serious reform. These findings are robust to various slices of the data and recent advances in the specification and estimation of the gravity equation to account for sample selection issues and the extensive margin of trade.