Does the World Trade Organization Promote Trade? An Empirical Assessment of Agricultural and Non‐Agricultural Trade Flows

In this paper we ask whether the GATT/WTO has actually failed to increase members’ agricultural trade. Surprisingly, there is very little empirical econometric support to shed light on this question despite the fact that agricultural trade is often at the forefront of multilateral negotiations. We address this issue by considering GATT/WTO effects across agricultural and non‐agricultural sectors. Despite much ‘hoopla and hype’ that the GATT/WTO has done nothing to boost members’ agricultural trade, our results suggest that the multilateral institution has delivered significant positive effects on agricultural trade over the period 1980‐2004. Moreover, in many cases the trade flow effect of membership in the GATT/WTO exceeds that of non‐agriculture, merchandise trade. The results have important policy implications when one considers the growing body of literature that often presumes that the GATT/WTO has done nothing to stimulate members' agricultural trade.