1887

WTO Working Papers

WTO working papers usually represent research in progress. Such research may be conducted in the preparation of WTO Secretariat reports, studies or other material for WTO members. The papers are circulated for comment because the WTO considers critical review of professional research to be extremely important.

English

How WTO Commitments Tame Uncertainty

Guided by a cost benefit analysis model and using a unique database of tariff bindings for all WTO countries over the 1996-2011 period, we show that WTO commitments affect members’ trade policy. More stringent bindings reduce the likelihood of responding to import shocks by raising tariffs and increase the likelihood of contingent measures. We argue that this reduces overall trade policy uncertainty. In a counterfactual scenario where WTO members can arbitrarily increase tariffs they are 4.5 times more likely to do so than under current bindings.

English

Keywords: trade policy, anti-dumping, trade agreements, trade policy uncertainty
JEL: F14: International Economics / Trade / Empirical Studies of Trade; F13: International Economics / Trade / Trade Policy; International Trade Organizations; F53: International Economics / International Relations, National Security, and International Political Economy / International Agreements and Observance; International Organizations
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