We must have a trade agreement to increase trade.  Right?  Wrong.  WTO membership, for example, has a zero effect on increased overall trade, at best, compared with pre-WTO.

We assume that trade agreements are to promote trade.  But people needing stuff promotes trade.  And government manipulation of currency and border adjustable taxes impacts trade.  Subsidies promote trade, in a distorting way.  But not the WTO.

Heresy!

But who has studied it?  Very few.  The Very. Serious. People. in Washington DC merely accept the trade-is-good phrase as accepted wisdom, relieving themselves of the obligation of actual thought. 

Andrew Rose did study the relationship between the WTO and trade.  Andrew Rose of the National Bureau of Economic Research is not a "protectionist."  But he took a look at trade flows, screening for WTO effects.  He found this:

Not only does the WTO not increase trade by member countries; it doesn't even produce more open trade policies among member states.

But the guy has to protect his job.  So he said:

"No reasonable person believes that membership in the GATT or WTO actually reduces trade," explains the author, "so I prefer to interpret the negative coefficient as a mystery rather than an indictment."
 

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