Does the WTO Increase Trade? The Case of U.S. Cocoa Imports from WTO-Member Producing Countries

This study analyzes U.S. cocoa bean imports from twenty-one major cocoa-producing and exporting countries during the pre- and post-liberalization period of 1970-2008 using the gravity equation and a linear one-way fixed effects model. The objective was to measure trade creation for a World Trade Organization (WTO) member that has undergone trade liberalization. Cocoa beans can serve as a proxy for any tropical commodity upon which a developing country heavily relies on for export revenue, such as is the case with cocoa for Côte d’Ivoire and Ghana, for example. Our results find participation in free trade agreements (FTAs) and WTO membership do contribute to increased U.S. cocoa bean imports at the one percent and five percent confidence levels, respectively.