Journal Article

Agricultural Trade and the GATT/WTO: Does Membership Make a Difference?

Jason H. Grant and Kathryn A. Boys

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 94, issue 1, pages 1-24
Published in print January 2012 | ISSN: 0002-9092
Published online November 2011 | e-ISSN: 1467-8276 | DOI: https://dx.doi.org/10.1093/ajae/aar087

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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.

Keywords: agricultural trade; GATT; WTO; gravity equation; panel data; intensive and extensive margin; F13; Q17

Journal Article.  11517 words.  Illustrated.

Subjects: International Trade ; Agricultural Economics