Comments on: Does the WTO liberalize trade? http://www.tradediversion.net/archives/2005/08/does-the-wto-liberalize-trade.html Commentary on development, globalization, and trade by Jonathan Dingel Tue, 07 Feb 2012 12:16:24 -0800 http://wordpress.org/?v=2.8 hourly 1 By: ivan http://www.tradediversion.net/archives/2005/08/does-the-wto-liberalize-trade.html/comment-page-1#comment-9 ivan Wed, 10 Aug 2005 08:37:36 +0000 http://www.tradediversion.net/?p=26#comment-9 According to this paper (http://www.stanford.edu/~tomz/working/TomzGoldsteinRivers2004.pdf) Rose has understated the effect of GATT because he only included countries with formal membership of the GATT. But not all non-member are outsiders. Many outsiders have the rights and obligations of GATT although they are not formal members. Nonmember participants are colonies and oversees territories, de facto participants and some states that acceded provisionally. If those countries are included the effect of GATT on trade turns positive, both for members as for non-member participants. Now in the end this paper as the papers of Rose suggest the same thing: the importance of the MFN-principle. As the authors state: GATT requires developing countries to extend minimum tariffs to other participants, many of whom were previously subject to higher rates. Through the simple application of the most-favorednation principle, then, GATT broadens the geographic coverage of free trade: it widens the set of countries to which minimum tariff rates apply. According to this paper (http://www.stanford.edu/~tomz/working/TomzGoldsteinRivers2004.pdf) Rose has understated the effect of GATT because he only included countries with formal membership of the GATT. But not all non-member are outsiders. Many outsiders have the rights and obligations of GATT although they are not formal members. Nonmember participants are colonies and oversees territories, de facto participants and some states that acceded provisionally. If those countries are included the effect of GATT on trade turns positive, both for members as for non-member participants. Now in the end this paper as the papers of Rose suggest the same thing: the importance of the MFN-principle. As the authors state:

GATT requires developing countries to extend minimum tariffs to other participants, many of whom
were previously subject to higher rates. Through the simple application of the most-favorednation
principle, then, GATT broadens the geographic coverage of free trade: it widens the set of
countries to which minimum tariff rates apply.

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