ASSESSING THE EFFECT OF JOINING THE WORLD TRADE ORGANIZATION ON TRADE PERFORMANCE: A STUDY OF CIS COUNTRIES

Abstract

The primary objective of this academic research is to evaluate the impact of trade policy on trade performance. Particularly, the study investigates the impact of World Trade Organisation (WTO) on trade performance of the Commonwealth of Independent States (CIS) countries. The research applies gravity model and analyses secondary data by incorporating bilateral trade determinants, including natural causes of trade, thus, isolating the impact of trade policy. The thesis examines three critical areas of inquiry. First, this study broadens the scope of global trade investigation by incorporating CIS countries into the research sample. As the most recent members to join the Organization, the Russian Federation and Kazakhstan underwent a thorough and prolonged accession process that has yet to be examined within a global context. It is crucial to analyze how the results might vary when these regions' experiences are taken into account within a global perspective. Second, this study examines the consistency of trade dynamics for CIS countries. Considering CIS nations historical regional trade patterns, geographic isolation from global trading partners and significance of Kazakhstan and the Russian Federation as one of the main oil exporters, the CIS results might deviate from baseline results. Further, this study investigates the level of trade diversification or trade concentration of CIS countries and provides sectorial analysis of post WTO accession period export share. The research has contributed to the literature by expanding the scope of investigations to encompass the long-term impact of WTO membership on trade performance over 20 years. The study analyse trade patterns from 1990 to 2019 and provides in-depth analysis of the CIS region. The study's findings are particularly relevant to policymakers seeking to improve trade performance of the CIS region. The study, which integrates CIS countries into the survey on the impact of the WTO on world trade, reveals a positive increase in world trade and findings highlight amplified impact of WTO membership and trade agreements. WTO membership has proven to significantly enhance bilateral trade flows, particularly for countries undergoing the WTO accession process. These findings are of particular relevance to CIS countries due to their accession process, pre-existing regional trade agreements and the post-accession comprehensive trade agreement - Eurasian Economic Union (EAEU) - comprising five CIS members, with four members in WTO. The research suggests a less favorable impact of WTO membership on trade among CIS nations. Despite the conventional expectation that WTO membership should promote trade, the results paint a different picture. Membership of the WTO has not increased trade within the CIS bloc, nor does it appear to promote trade between CIS countries and other WTO members. While the impact of post-accession trade agreement, such as EAEU, positively influenced trade development of the region.