Abstract:

      The disagreement among the international trade economists on the impact of WTO on world trade growth has remained an important question since the formation of the institution. The finding of insignificant effect of WTO in promoting world trade by Rose (2004a) has been challenged by number of studies like Subramanian and Wei (2007), Tomz et al. (2007), Helpman et al. (2008), among others, with the substantial impact on world trade growth. This study investigates whether WTO membership aids trade growth in an extended gravity model framework using a dataset of 200 exporters and 234 importers. Along with extended gravity variables the study uses trade facilitating infrastructure, and tariff and non-tariff variables for estimating the model. The results showthat the sole effect of WTO membership is crucial in enhancing market accessalong with regional trade agreements and preferential trade arrangements. The impact increases with the maturity of the institution.

About authors:

Shri Pradyut Kumar Pyne,Economic Officer, Department of Economic Affairs, Ministry of Finance, New Delhi – 110001,

Shri Saikat Sinha Roy, Professor, Department of Economics, Jadavpur University, Kolkata – 700032

       An earlier version of the paper was presented at the International Conference on “International Trade, Specialization and Growth – David Ricardo and Contemporary Perspectives” jointly organized by the Centre for Studies in Social Sciences, Kolkata and the Centre for Advanced Studies, Department of Economics, Jadavpur University during 28-29 December 2017. The authors gratefully acknowledge the various comments received at the internal seminars of the Department of Economic Affairs, Ministry of Finance, Government of India, and the Department of Economics,Jadavpur University, Kolkata. We acknowledge constructive comments from Arvind Subramanian, Sarmila Banerjee, SugataMarjit, SajalLahiri, RajatAcharyya, DevashishMitra, SaibalKar, Partha Ray, C. Veeramani on an earlier draft of the paper.