P. 1
Effects of World Trade Organization (1)

Effects of World Trade Organization (1)

|Views: 79|Likes:
Published by Swati Tiwari

More info:

Published by: Swati Tiwari on Jul 27, 2011
Copyright:Attribution Non-commercial


Read on Scribd mobile: iPhone, iPad and Android.
download as PPTX, PDF, TXT or read online from Scribd
See more
See less





Effects of World Trade Organization

International Business Project Submitted by: Swati Tiwari 10609181- R3

Douglas Rivers. and Michael Tomz. Goldstein. ‡ The analysis is organized around two factors: ± Institutional standing ± Institutional embeddedness .Introduction ‡ The article Institutions in International Relations: Understanding the Effects of the GATT and the WTO on World Trade by Judith L. ‡ The article comprehensively evaluates the effects of the GATT/WTO and other trade agreements since World War II.

.International Institutions ‡ General Agreement on Tariffs and Trade (GATT): ± Negotiated during the UN Conference on Trade and Employment ± Was the outcome of the failure of negotiating governments to create the International Trade Organization (ITO). ‡ World Trade Organization (WTO): ± An organization that intends to supervise and liberalize international trade. replacing the General Agreement on Tariffs and Trade (GATT). ± The organization deals with regulation of trade between participating countries. 1995 under the Marrakech Agreement. ± The organization officially commenced on January 1. ± GATT was formed in 1949 and lasted until 1993.

Empirical Research has not proceeded as swiftly as theoretical framework.Theoretical Framework Vs Empirical Research ‡ Sophisticated theories about the emergence and effects of international institutions due to the contribution of Keohane and others. WTO. ‡ ‡ ‡ The gap between theory and evidence appears severely in analysis of the GATT and its successor. and international trade has grown in tandem ‡ . has expanded dramatically since its founding. International Institutions promote Cooperation.GATT/WTO. Membership in the successful international institutions .

Analysis ‡ Many observers assume the trends of effect of WTO and growth in international trade are linked & praise the institution for transforming world commerce ‡ But few have attempted to quantify the GATT/WTO's effect on the level and direction of trade. after controlling for national income. and other factors that affect the flow of goods between nations. geography. ‡ Doubts on the GATT/WTO as the beau ideal. the statistical analysis finds no evidence that the GATT/WTO increased trade among members. . ‡ Also.

.Factors ‡ Institutional standing ‡ Institutional embeddedness.

or nongovernmental actor possesses rights and obligations established by the institution. ‡ Standing. helps in understanding the true reach of international institutions. which can be wider or narrower than formal membership. ‡ The concept of standing. . is the more useful concept for understanding incentives and behaviour. territory. not formal membership.Institutional Standing ‡ A state.

. ± Some formal members employ opt-out clauses or express reservations that affect the distribution of rights and obligations.Standing: Rights and Obligations in International Organizations Standing differs from formal membership in two ways: ± Rights and obligations to territories and groups that never signed the agreement.

institutions ‡ Four types of arrangements: ‡ GATT/WTO ‡ PTAs ‡ Nonreciprocal agreements such as GSP . functionally equivalent.Institutional Embeddedness ‡ Analysts used it to assess the effect of different.

including PTAs. economic. .Embeddedness: The GATT/WTO in the Context of Other Commercial Agreements ‡ The international system is complex. and social institutions. and most countries participate in a wide range of military. and that all but two were signatories to at least 100 IGOs. ‡ Hierarchy hypothesis: the effect of the GATT/WTO depends on the presence or absence of higher-order agreements. ‡ Even the "least integrated" country in the world belonged to fourteen intergovernmental organizations. ‡ The GATT/WTO is embedded in a system of other trade agreements.

± problem of computing dynamic multipliers not taken into account. which can cause bias in the estimate. . ± GDP is endogenously determined. ‡ However. ± only the contemporaneous effects of participation. this approach. ‡ Estimate the effects of post war trade agreements. while standard. does not capture all potential effects of the GATT/WTO.Statistical Model ‡ The gravity model Workhorse model of international trade.

‡ Standing and embeddedness ‡ Sample .Data ‡ Measures of Trade IMF ‡ Size and Distance GDP of each partner in each dyad.

‡ Embeddedness and the trade regime.Empirical Result ‡ The effects of participation. . ‡ Effects of international agreements overtime.

but the work suggests other avenues for research. ‡ Standing in the GATT/WTO is not coterminous with membership.Conclusion ‡ The empirical analysis in this article focuses on trade. rather than studying each agreement in isolation. ‡ The concept of embeddedness also has wide-reaching implications for other areas of international relations ‡ In a world where countries enter multiple agreements. we must examine agreements in context. ‡ The findings in this article show that such an approach can pay valuable dividends for understanding international relations .


You're Reading a Free Preview

/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->