An Exclusive Country Club: The Effects of the GATT on Trade, 1950–94

Abstract

Using data on bilateral trade flows from both before and after World War II, this article examines the impact of the General Agreement on Tariffs and Trade on trade between its members and on the system of interwar trade blocs. It shows that the distribution of the benefits produced by the GATT was much more highly skewed than conventional wisdom assumes. The article also shows that the gold, Commonwealth, Reichsmark, and exchange-control blocs exerted positive and significant effects on trade after 1945. The authors attribute these effects to the bargaining protocol that governed successive rounds of GATT negotiations, the signature element of the postwar trade regime.

Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade

“…A review of the GATT0WTO's history suggests three possible explanations+ First, the GATT0 WTO required developing countries to extend MFN tariffs to other participants, 45+ Gowa and Kim conclude differently, arguing that the GATT, "had a large, positive, and significant impact on trade between only five of its member states: Britain, Canada, France, Germany, and the United States"; see Gowa and Kim 2005, 454+ Subramanian and Wei forthcoming agree with our finding that, contra Rose, the GATT0WTO promoted world trade+ They claim, however, that most of the benefits went to the developed world and not to developing nations+ We suspect the difference in findings stems from our use of different data and a corrected measure of standing in the GATT0WTO+ Notes: All estimates in the table come from a pooled ordinary least squares~OLS! regression with separate GATT coefficients for each negotiating round+ The unit of observation is the directed dyad and the dependent variable is the natural log of imports~measured in 1967 U+S+ dollars!+ The regression involved 381,656 observations, which covered fifty-nine years and 17,359 directed dyads+ The model includes fixed effects for directed dyads and years, as well as controls for reciprocal PTAs, nonreciprocal PTAs, GSP, currency union, colonial orbit, and the log product of real GDP+ Robust standard errors, clustered by directed dyad, appear in parentheses+ The standard error of the regression was +94, and R 2 was +84+ many of whom were previously subject to higher rates+ Through the simple application of this principle, the GATT0WTO broadened the geographic coverage of trade+ Second, through negotiations, the organization encouraged developing countries to lower and bind their tariffs+ In some cases this occurred because developed countries acted on behalf of their colonies; in other cases, developing countries participated directly in the negotiating rounds+ Finally, the GATT0WTO gave developing countries access to markets of other participants, including ones that liberalized their trade policies considerably+ Thus, even when countries only partially followed the rule of the regime, all members benefited, making the GATT0WTO more than an elite "country club+" 46 A similar logic helps explain our finding that the GATT0WTO had a positive effect even when only one member of the dyad participated in the organization+ The final column of Table 4 shows that, in all but the most recent time period, dyads with one GATT0WTO participant traded more than dyads without any participants+ We see no evidence of trade diversion, even in the early years of limited membership+ The positive effect when only one country participates may be due to MFN agreements that predate the GATT0WTO+ The United States, for example, maintained MFN treaties with many trading partners at the time of the GATT's creation+ As a consequence, U+S+ concessions in the GATT0WTO were extended to parties that did not participate in the organization+ Finally, we considered the effects of invoking the key opt-out clause, Article XXXV+ The number of invocations in our data set was small: only about 2,200 of 46+ Gowa and Kim 2005+ Notes: Each column comes from a separate ordinary least squares~OLS!…”

Who Files? Developing Country Participation in GATT/WTO Adjudication

“…Thus filing complaints can potentially influence distributional outcomes. Gowa and Kim (2005) show that most benefits from trade liberalization in the GATT accrued to a small group of industrial states. Some inequality in outcomes reflects the low influence of developing countries in bargaining over the rules, but developing countries may also gain worse distributional outcomes as a consequence of weak enforcement.…”

Expected Macroeconomic Impacts of the Accession to WTO on Azerbaijan Economy: Empirical Analysis

“…Both criticizers' and supporters' studies about WTO are evaluated briefly. More precisely, the researches that find no significant impact of WTO (Rose 2004a(Rose , 2004b(Rose , 2004cGowa and Kim 2005;Park 2009;Eicher and Henn 2011;Roy 2011;Swinnen, Olper and Vandemoortele 2012) are discussed as parallel to the studies of the supporters of WTO (Subramanian and Wei 2007;Rivers 2007a, 2007b;Balding 2010;Liu 2009;Dutt, Zandtand Mihov 2013;Konya, Matyas and Harris 2011;Kim 2008;Grant and Boys 2012;Herzl and Warner2011;Chang and Lee 2011;Anderson2010;Mansfield and Reinhardt 2008;Jansen 2010;Buthe and Milner2008;Shah, Hasnat and Li 2010).…”