Effects of WTO Membership on Developing Members’ Trade: A Case for South Africa

Abstract: Empirical literature assessing the effects of the WTO on its membership found no notable effect on the trade patterns of developing members in comparison to those of developed countries. This has been attributed to the high levels of protectionism by developing countries. However, the conclusion of the Uruguay round of negotiations culminated in a regime change with respect to the obligation requirements of developing countries. The current paper therefore brings to light the prospects availed by membership in the WTO for the South African economy against the backdrop of the Uruguay Round liberalization reforms. The cross-section gravity equation is employed to analyse South Africa’s bilateral export data ranging from 1992 to 2009. The paper finds no significant trade promoting in the period before 1995 and evidence of the trade promoting effect of the WTO on South Africa’s level of exports in the period after 1995, a finding which is consistent with the reciprocity principle of the theory of the GATT.