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.

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

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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]

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