WTO Membership May Not Lead to More Trade, Study Finds

2002-11-05 19:01 (New York)

WTO Membership May Not Lead to More Trade, Study Finds

London, Nov. 6 (Bloomberg) -- World Trade Organization

membership may not boost a country's international trade,

according to a report published by the U.K.'s Centre for Economic

Policy Research.

``There is still little evidence that belonging to the WTO

really matters,'' Andrew K. Rose, an economics professor at the

University of California, Berkeley and fellow at the London-based

institute, said in the report.

Founded in 1995 as the successor to the General Agreement on

Tariffs and Trade, the WTO now has 145 member governments, with

more applying every year. China joined last December after 15

years of negotiations; President Vladimir Putin wants Russia to

become a member before the end of 2004.

The role of the Geneva-based trade arbiter is to promote

trade and help settle disputes among its members. Tariffs on

industrial goods now average about 4.7 percent, compared with

about 40 percent in 1947 when the GATT was formed. The annual

volume of global exports grew more than 6 percent on average

during the 1990s.

``We currently do not have strong empirical evidence that the

GATT/WTO has systematically played a strong role in encouraging

trade,'' Rose's study concludes.

Other factors, such as higher productivity in traded goods or

lower transport costs, may explain why trade has grown faster than

income since 1947 when the GATT was founded, he said.

Last year the WTO began a new round of talks, aimed at

reaching agreement by 2005 on opening markets such as cars,

banking and food. The University of Michigan estimates a potential

gain in global commerce of $700 billion from halving tariffs as a

result of the talks.

--Warren Giles in the Geneva bureau +41 22 317 92 02 or

wgiles@bloomberg.net Editor: McGill, *Shankar

Story illustration: For a tour of trade stories and related links,

see {CNP 02877200102 <GO>}. For more stories about the WTO and

economies, click {TNI WTO ECO BN <GO>}.

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-0- (BN ) Nov/06/2002 0:01 GMT