Trade, institutions, and the timing of GATT/WTO accession in post-colonial states

Abstract

Prior to 1995, when the World Trade Organization (WTO) superseded the General Agreement on Tariffs and Trade (GATT), a number of states took advantage of GATT Article XXVI:5(c), which allowed them-as former colonies or component territories of existing GATT members-to quickly and simply join the multilateral trade regime. The speed with which these post-colonial accessions took place, however, varied widely: some states joined immediately upon independence, while others joined much later. Still other post-colonial states passed on this opportunity, only to subsequently begin the longer, more onerous accession process required of other GATT/WTO applicants. Our paper seeks to explain this variation in the timing of post-colonial states' accession to the GATT/WTO. We argue that three key variables explain the timing of accession decisions: 1) a country's trade ties with existing member-states; 2) its existing preferential trade agreement (PTA) commitments; and 3) its domestic political institutions-specifically, the country's level of democracy. Furthermore, we argue that the effects of these variables are conditional upon each other: post-colonial countries with more extensive trade ties to existing member-states were more likely to accede rapidly under Article XXVI:5(c), but only under specific conditions-namely, when they had not already locked in ties with key trading partners through bilateral or regional PTAs, and when they were governed by a more democratic regime. We test this argument empirically using an original dataset of 61 post-colonial states from 1951 to 2004. Our results strongly Rev Int Organ (2012) 7:81-107 support this explanation of GATT/WTO accession and help to clarify the pattern of participation in the multilateral trading system that we have observed over the last half-century.

Conclusions: Emerging Powers in the wto – Beware the Glass Ceiling

“…"grandfathered" into the system during the institution's early years if they were deemed to be of little economic and political significance or threat-as were the former colonies of the European powers-or else they faced exception clauses that nullified many of the benefits of membership, as was the case with Japan in 1955; or (ii) they were required to agree to significant and overly burdensome accession protocols that have become steadily more, rather than less, demanding over the institution's lifecycle (Copelovitch and Ohls, 2012) been to increase steadily overtime the relative gap between the trading fortunes of the most and least significant players in world trade through the negotiation of a series of asymmetrical trade bargains across the institution's lifetime (see Wilkinson, 2006a). …”

Outside looking in: non-accession to the WTO

“…In addition to the small but important nuance between outsiders and observers, Copelovitch and Ohls (2012) also restrict their analysis to post-colonial states and include data for only one of the thirteen outsiders in their study.…”

“…Each employs a Cox proportional hazard model to analyze the 'hazard' of accession, using an array of independent variables to explain differences in the timing of the accession decision. Copelovitch and Ohls (2012) find that existing trade ties to GATT/WTO members, levels of democracy, and existing trade openness increase the 'hazard' rate (of acceding to the WTO) while membership in preferential trade agreements (PTAs) decreases the hazard rate. Furthermore, they find that these relationships are conditional, or interactive.…”

“…The WTO accession decision has been examined more directly in recent papers by Copelovitch and Ohls (2012) and Davis and Wilf (2012). Each employs a Cox proportional hazard model to analyze the 'hazard' of accession, using an array of independent variables to explain differences in the timing of the accession decision.…”

“…Both of these papers support the functionalist and democratization logics that are found in the broader IO accession literature discussed above. Copelovitch and Ohls (2012) and Davis and Wilf (2012) papers offer valuable insight into why, of the countries that have sought accession, some wait longer to begin and reach accession they do not explain the decision of those countries that have not yet sought accession. This distinction is lost in Copelvitch and Ohls' (2012) Cox Hazard model, which treats failure as achieving formal accession rather than starting the accession process.…”