International trade and economic growth
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The document presents research findings on the impact of joining the World Trade Organization (WTO) on economic growth in transitioning democracies. The study indicates that WTO membership correlates with improved GDP and exports, while agriculture experiences slower growth. Recommendations include initiating the WTO accession process, receiving training, and identifying trade partners.
International trade and economic growth
- 1. International Trade and Economic Growth Mehreen Boghani, Tobin Ezekwesili, Daniel Reynolds July 2013
- 2. Agenda • Mehreen – What were our research objectives? – What is the World Trade Organization (WTO)? • Tobin – How did we conduct our research? – How did we obtain and analyze our data? • Daniel – What were the research results? – What are our conclusions?
- 3. What Were Our Research Objectives? • Country has recently transitioned to democracy • New government wants to improve the people’s living standards by increased economic growth • Questions: – Should the country join the WTO? – What would be the impact on Agriculture?
- 4. What is the World Trade Organization? • Began in 1995 – Formed from GATT (started 1948) – 159 countries with more negotiating to join – Over 95% of world trade • Objective is to help trade flow – Smoothly – Freely – Fairly – Predictably • International agreements covering trade in – Goods (GATT) – Services (GATS) – Intellectual property (TRIPS) • Functions – Trade agreements & negotiations – Trade policies and dispute resolution – Assist developing countries
- 5. How Did We Conduct Our Research? • Key Measurements – Gross Domestic Product – Exports of Goods and Services – Agriculture Value Added • Countries Selected – Geographic Diversity – Developing economies • 10 Year Time Period – Before and After Country Joined WTO
- 6. How Did We Obtain and Analyze Our Data? • Source data from The World Bank • Compound Annual Growth Rates – GDP – Exports – Agriculture • Variances for 10-years – Pre-WTO – Post-WTO • Un-weighted averages • Regression analysis to compute confidence at 95%
- 7. What Were the Research Results? • Joining WTO improved GDP – 3.48% mean improvement – 18 of 32 countries improved • Export-driven growth – Also 3.48% improvement – 19 of 32 countries improved • Agriculture grew, but more slowly – -0.51% slower growth – 19 of 32 countries improved 4.06% 5.31% 0.97% 7.54% 8.79% 0.46% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% GDP Exports Agriculture 10 Year Compound Annual Growth Rates Pre-Accession Post-Accession
- 8. What Are Our Conclusions? • Expect GDP to more than double – Driven by Export Growth – Slower growth for Agriculture • Start WTO accession process – Get training and technical assistance • Make changes to open your markets • Identify potential trading partners – Negotiate trade agreements 3.0 1.2 0.5 4.5 2.0 0.6 6.2 2.8 0.5 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 GDP Export Agriculture Billions Expected 10 Year Results Current Without WTO With WTO
- 9. Questions?