World Trade Organization Accession Research Articles

Oil market responses to Sino–European political relation shock: Insights after China's world trade organization accession

We investigate how changes in political relations between Europe and China affect the oil market. When political relations improve, we find a significant increase in oil demand and prices, accompanied by a decrease in market uncertainty. However, the effects on oil supply and inventory are minimal. Additionally, we compute the forecast error variance decomposition and construct the counterfactual evolution of oil variables in the absence of the impacts of political relation shocks. We find that shifts in Sino–European political relations contribute more significantly to variations in oil market uncertainty than to other oil variables. Finally, we augment the vector autoregression model by incorporating the Sino–US political relationship index. Our findings reveal that this augmentation significantly changes the impacts.

Trade liberalization, labor market power, and misallocation across firms: Evidence from China's WTO accession

Trade liberalization, labor market power, and misallocation across firms: Evidence from China's WTO accession

The impact of trade liberalization on firms’ product and labor market power

Abstract This paper examines the impact of trade liberalization on firms’ product and labor market power. We estimate the prevalence and intensity of price-cost markups and either wage markups or wage markdowns, taking the dependence between these model-consistent measures of product and labor market power into account. Exploiting reductions in tariffs upon China’s World Trade Organization accession, we find that trade liberalization has not switched firms away from exercising product and labor market power. Reducing input tariffs has widened price-cost markups, narrowed wage markdowns, and widened wage markups at the firm level. We reveal heterogeneous trade liberalization effects on the intensity of firms’ product and labor market power.

Does opening up change customs? Evidence from trade liberalization and marriage payments in China

Abstract There is widespread concern about whether opening up changes cultural customs. However, empirical evidence remains limited. In this paper, we provide new evidence on this issue by examining the impact of trade liberalization on marriage payment customs in China. We first provide a conceptual framework based on a labor market perspective to illustrate how trade liberalization has driven changes in marriage payment customs. Then, using China's World Trade Organization accession as a quasi‐natural experiment, this paper uses the difference‐in‐differences strategy and China's large‐scale household survey data to conduct an empirical study. Our results suggest that trade liberalization has reduced marriage payments in China, especially the bride price but not the dowry. Evidence from industry and census surveys suggests that the declining earning ability of marriageable men and the increasing relative economic status of women have driven down the bride price from the supply and demand sides, respectively. We also find that the impact of trade liberalization has been concentrated on southern and rural households. In addition to the decline in the bride price, the bad practice of child marriage in China has also been alleviated as a result.

The impact of trade policy uncertainty on short-term financing

The impact of trade policy uncertainty on short-term financing

MACROECONOMIC IMPACT OF INTERNATIONAL TRADE AGREEMENTS ON UZBEKISTAN’S ECONOMY

This study examines the optimal sequence for Uzbekistan's integration strategies into the World Trade Organization (WTO) and the Eurasian Economic Union (EAEU). We explore four main scenarios: joining the WTO without entering the EAEU, becoming an EAEU member without WTO accession, first joining the WTO then the EAEU, and initially entering the EAEU followed by WTO accession. The results suggest that Uzbekistan would benefit most from initially joining the WTO and then the EAEU, as this approach offers greater trade liberalization and generates more significant positive outcomes.

The Global Environmental Impacts of China's Accession to the WTO: A 20-Year Review.

Robust empirical assessments of the long-term cumulative global effects of free trade and economic globalization on the environment are limited. This account fills this gap by constructing a dynamic computable general equilibrium model to estimate the environmental effects of a milestone in the recent history of trade liberalization: China's 20-year World Trade Organization (WTO) accession. The modeling shows that China's accession could have resulted in an increase in the global cumulative greenhouse gases (GHGs), sulfur dioxide (SO2), and nitrogen oxide (NOx) emissions by roughly 14,000 Mt CO2-eq, 64 Mt, and 46 Mt, respectively. The global production scale effect contributed to most of these estimated increases. The regional total output composition effect also caused higher emissions. Meanwhile, the sectoral output composition effect helped reduce total emissions to a limited extent. Fortunately, a package of emission abatement measures led to a decrease in emission factors and a drop in the global cumulative emissions of GHGs, SO2, and NOx. The findings suggest that to enjoy the free trade and economic globalization benefits and minimize the induced emission increases, it is vitally important to systemically reduce emissions across the entire economy and nurture a low-carbon trade regime.

China's Economic Evolution: From WTO Accession to Global Leadership

This study provides a comprehensive exploration of the transformative journey of China's economic policies and global engagement from its accession to the World Trade Organization (WTO) in 2001 to the present day. The analysis spans three distinct phases: the initial shift from a centrally planned to a market-oriented system, the full integration into the global economic system marked by meticulous adherence to WTO commitments, and the subsequent era characterized by the Belt and Road Initiative and high-quality development strategies. Examining key milestones such as the establishment of free trade zones, internationalization of the yuan, and participation in significant agreements like the Regional Comprehensive Economic Partnership (RCEP) and the China-EU Comprehensive Agreement on Investment (CECAI), the study highlights China's pivotal role in shaping global economic structures. The findings underscore China's commitment to opening-up, fostering international cooperation, and contributing significantly to reshaping the global economic landscape.

The World Trade Organization (WTO) Accession Process, Building Peace and Inclusiveness.

The World Trade Organization (WTO) Accession Process, Building Peace and Inclusiveness.

EXPORT LIBERALIZATION AND EXPORTERS’ LEVERAGE: EVIDENCE FROM CHINA’S WTO ACCESSION

This paper investigates the effect of export liberalization on exporters’ financial leverage. With the data on Chinese exporter leverage around World Trade Organization (WTO) China’s accession, we identify a negative causal effect of export liberalization, removal of the trade policy uncertainty as an exogenous shock, on exporter’s leverage using a difference-in-difference approach. The results are robust under a series of tests. We also examine the heterogeneous effects across firm types and across locations. These effects primarily concentrate on private enterprises, foreign-invested enterprises, companies located in the eastern regions and processing trade enterprises. State-owned enterprises, businesses in western regions and general trade enterprises are not significantly affected. Further analyses reveal that export liberalization also reduces the industry financial leverage dispersion across firms. The main mechanism is that export liberalization reduces exporters’ financing constraints.

SOCIALIZATION THROUGH INTERNATIONAL INSTITUTIONS? DECODING CHINA’S VIEWS ON INTELLECTUAL PROPERTY RIGHTS SINCE ITS WTO ACCESSION

Constructivism in the studies of international relations (IR) posits that international institutions have the power to induce a state’s socialization into the norms and rules enshrined in these institutions. The study puts this hypothesis to an empirical test by analyzing China’s views on intellectual property rights (IPR) since its WTO (World Trade Organization) accession in 2001. The article examines relevant People’s Daily commentary articles published from 2001 to 2022 using Structural Topic Model (STM) and domestic scholarly debates. The study identifies four prevalent themes, including IPRs and international competition, strengthening IPR protection, developing indigenous IPRs, and achievements and barriers in IPR development. It finds that although China has increasingly realized the importance of IPRs, China’s views on IPRs are predominantly oriented toward a realpolitik discourse on leveraging IPRs to enhance China’s overall national power in international competition. While socialization is at best subordinate to China’s domestic interests in shaping China’s views on IPRs, as the country’s worldview acts as a strong mediating force between international ideas and China’s views on IPRs.

Assessing the Effect of Joining the World Trade Organization on Trade Performance: A Study of CIS Countries

This research delves into the impact of World Trade Organization (WTO) membership on trade dynamics in the Commonwealth of Independent States (CIS) region, focusing on the potential augmentation or diversion of trade resulting from CIS countries’ WTO accession. The study context is grounded in the interplay between regionalism, represented by regional trade agreements and historical connections, and global integration facilitated by WTO membership. The study also scrutinizes the potentially complicating role of the Eurasian Economic Union (EAEU) regional bloc, referencing the ‘Spaghetti Bowl’ phenomenon of overlapping trade agreements. The gravity model of trade serves as a conceptual foundation to understand the effects of WTO membership and regional trade agreements on trade costs. Empirical results suggest that WTO membership has not enhanced trade for the CIS. Instances of trade within the CIS region where there is only one WTO member have resulted in a positive trend, even though there is no robust evidence that it is due to WTO membership. The EAEU enhances trade and serves as a trading bloc within the region. This study highlights that while the WTO strives to foster trade liberalization and growth, its effects can be region-specific and complex, as demonstrated by the CIS region’s experience. The research also hints at the importance of intra-regional trade and unique regional factors as critical determinants of trade patterns, which can enhance broader trade expansion and economic development.

Russia’s WTO membership: Assessing the impact on foreign trade

The paper assesses some of the consequences of Russia’s accession to the World Trade Organization (WTO). Whereas much discussion about its costs and benefits happened during the WTO negotiations and in the first years after the accession, there was little said on the real consequences afterwards. The aim of the research is to assess the degree of fulfillment of the accession expectations after a decade. The research method is the analysis of panel data on the world trade for 2000-2019 (an econometric model based on the gravity model of foreign trade). It has been established that the WTO accession ultimately benefited for Russian foreign trade. However, this effect has been offset by increased political tensions since 2014. The objections to the WTO also turned out to be predominantly justified. The most positive economic consequences of the WTO exist for exporters of low value added goods. The criticism of the WTO participation by machine builders is understandable: although they are among the beneficiaries, the effects on exports and imports are comparable.

Trade development and agricultural productivity change: Evidence from China

Abstract Since China joined the World Trade Organisation (WTO) in 2001, more Chinese agricultural products have been exported to various countries at low tariff rates. However, the impacts of WTO accession on China's agricultural productivity and technical efficiency are ambiguous. The aim of this study is to investigate the impacts of trade on China's agricultural production by analysing productivity changes before and after 2001. To understand the role trade plays in productivity and technical efficiency change, we introduce two trade indices to the multi‐input multi‐output distance function and technical inefficiency model to examine the export and import effects on technical efficiency and total factor productivity (TFP) change. Our findings indicate that the average growth rate of TFP is 5.8% per annum before joining the WTO, and it increases slightly with an annual rate of 8.5% after joining the WTO. Additionally, with the development of trade liberalisation, the traditional advantages (e.g., technology innovation, spillovers, FDI) of exports on agricultural productivity are being replaced by the competitive effect of imports.

Trade policies in Central Asia after EAEU enlargement and after Russian WTO accession: regionalism and integration into the world economy revisited

ABSTRACT This paper revisits the question of choice between regionalism and multilateralism in trade relations of Central Asia introduced by Pomfret (2005). Our study is motivated by a significant restoration of economic links between the former Soviet republics following Russian accession to the World Trade Organization (WTO), the creation of the Eurasian Economic Union (EAEU), and the formation of new trade ties with Vietnam, Iran, and Serbia. Above all, there have been substantial commitments made by the three Central Asian republics of Tajikistan, Turkmenistan, and Uzbekistan toward a multilateral system under the WTO rules. To this end, we apply a multi-region gravity model with interdependent trade flows using bilateral trade data of Tajikistan and Uzbekistan to study the ex-ante effects of economic integration with various bilateral, plurilateral, and multilateral partners. Our findings indicate the existence of considerable gains if the aforementioned economies would ascend to the EAEU in comparison to integration with China or Iran. We also document the presence of shared economic links between Tajikistan, Central Asia, and Turkey.

Did US Politicians Expect the China Shock?

Information sets, expectations, and preferences of politicians are fundamental, but unobserved determinants of their policy choices. Employing repeated votes in the US House of Representatives on China’s normal trade relations (NTR) status during the two decades straddling China’s World Trade Organization (WTO) accession, we apply a moment inequality approach designed to deliver consistent estimates under weak informational assumptions on the information sets of members of Congress. This methodology offers a robust way to test hypotheses about what information politicians have at the time of their decision and to estimate the weight that constituents, ideology, and other factors have in policy making and voting. (JEL D72, D78, D83, D84, F14, P33)

The Political Economy of Singapore and Its Development Strategies under USA-China Power Rivalry: A Choice of Hedging Policies

Since the United States and China established diplomatic relations, this relationship has been encountered many difficulties; for example, the 1989 Tiananmen Square Incident, the 1999 US-led NATO bombing of the Chinese Embassy in Belgrade, the 2001 US-China aircraft collision in China’s Hainan Island, and China’s 15-year World Trade Organization accession negotiation process and its disputes later with the United States under the WTO, etc. Needless to say, the two great powers also have serious debates and arguments on the Taiwan issue. Under this long-term US-China strategic competition and conflict, Southeast Asian countries therefore have their views and considerations. They smartly have cooperated with China on trade and economic issues while are eagerly or kind of faithfully inclined toward the United States on political and militarily issues. This paper therefore wants to review first the neorealist assumptions on great powers’ relations, and then examine US-China strategic competition and rivalry in the Pacific. Also, it introduces Singapore’s domestic politics and foreign policy as well as its strategic hedging considerations and choices under US-China power rivalry and make a conclusion.

Trade policy uncertainty and foreign direct investment: Evidence from China’s WTO accession

Trade policy uncertainty and foreign direct investment: Evidence from China’s WTO accession

Trade liberalization and firm toxic emissions

Abstract We investigate the effects of trade liberalization on firm‐level toxic emissions. Using China's World Trade Organization (WTO) accession as an exogenous shock, we further introduce government administrative data of firm toxic emissions to conduct a difference‐in‐differences estimation. We show that trade liberalization significantly reduces firm toxic emissions. Our results are robust to alternative measures and different specifications. Endogeneity tests based on different empirical designs or omitted variables further validate our main findings. China's WTO accession primarily affected pollution emissions through the scale of production, export opportunities, technology upgrading, intermediate inputs, and within‐firm responses mechanisms.

Managing the U.S.-China Relationship in Three (and Three Alternative) Dimensions

Gregory Shaffer's article discussing the legal aspects of the multifaceted U.S.-China relationship is comprehensive, pragmatic, and timely at the twentieth anniversary of China's World Trade Organization (WTO) accession. Shaffer provides a surgical analysis of the “three central dimensions of this relationship: (i) the economic dimension; (ii) the geopolitical/national security dimension; and (iii) the normative/social policy dimension.” He also offers a targeted roadmap to reconceptualize a world where policies are increasingly securitized and to revitalize domestic safety valves embedded in the post-war economic system. Under Shaffer's proposed “Rebalancing Within a Multilateral Framework,” states enjoy more policy space and accommodation, subject to the proportionality principle and protection of third parties. Supplementing Shaffer's analysis, I offer three alternative dimensions, namely, the perceptions of businesses, states, and international organizations and how they complicate the successful delivery of Shaffer's proposal. I echo Shaffer's call for empathy between the United States and China regarding their respective domestic challenges and approaches to each other. Yet I contend that adequate trust and understanding of each other and the agreement over Shaffer's identification of interfaces/dimensions by decisionmakers of the two nations are susceptible to disruptions caused by the three alternatives I offer. Furthermore, I argue that a thorough and inclusive policy and legal analysis—designed in a coordinated way (“统筹” in Chinese)—should reduce negative externalities from the management of the U.S.-China relationship and minimize impacts for developing and least developed countries.