Trade, Export Capacity, and the WTO: Evidence from Jordan

Jordan - 19 November 2012

In this paper we investigate the impact of Jordan’s accession to the WTO on its trade and international competitiveness. Using Jordan’s trade, imports, and exports data over the period 1994-2009, we apply the commonly used gravity model to examine the association between accession to the WTO and Jordan’s exports as capacity to compete internationally. We find that following accession to the WTO, Jordan’s contribution to world exports decreased significantly. The results of the gravity model reveal significant negative association between joining the WTO and Jordan’s exports. Excluding Jordan’s trade with countries that have restrictions on their trade or have been unable to trade freely renders Jordan’s WTO membership unrelated to its trade and exports. That the foreign country shares a common language and borders with Jordan have positive impact on Jordan’s exports.