Will WTO Membership Really Improve Market Access for Ukrainian Exports?

  • Igor Eremenko
  • Nadiya Mankovska
  • James W. Dean


Although the WTO embraces over 90% of world trade, several large CIS transition countries have not joined it yet. Delays have not only been due to technical problems, but also to a lack of clear understanding of the consequences of WTO membership. The aim of this paper is to ask how important improved market access might be as an incentive for one of the biggest CIS countries, Ukraine, to join the WTO.

We employ the gravity model of international trade and include data on 85 of Ukraine’s trade partners. By looking at initial conditions for Ukrainian exports, we estimate the extent to which Ukrainian exports are hurt by barriers imposed by its trading partners, as well as Ukraine 's potential level of trade.

Our estimates show that import barriers imposed by Ukraine’s trade partners do not play an important role in determining the volume of Ukrainian exports. Moreover, Ukraine already exports twice the potential level, predicted by our gravity model. Nevertheless, Ukraine depends on small number of unprocessed and semi-processed export goods and the efficiency of its exporting industries is quite low.

These results suggest that the Most Favoured Nation mechanism and putative improved market access might not be an important criteria for deciding Ukraine’s accession to the WTO. Our results are consistent with other studies on transition economies, which found that WTO membership plays a much less important role in improving market access than do increasing FDI, regularising dispute settlements, and improving resource allocation.


Gravity Model Trade Partner Trade Barrier Dispute Settlement Gravity Equation 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Akimova I. and A. Scherbakov (2002): Competition and Technical Efficiency of Ukrainian Manufacturing Enterprises. Institute for Economic Research and Policy Consulting, Working Paper No. 17.Google Scholar
  2. Anderson J. E. (1979): A Theoretical Foundation for the Gravity Model. American Economic Review.Google Scholar
  3. Bergstrand J. H. (1985): The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence. Review of Economics and Statistics.Google Scholar
  4. Brocker J. (1998): How Would an EU-membership of the Visegrad-countries Affect Europe’s Economic Geography? The Annals of Regional Science Springer-Verlag.Google Scholar
  5. CEFIR-Club 2015 (2001): Russia in the WTO: Myths and Reality. Scholar
  6. Davis D. R. and D. E. Weinstein (1997): Does Economic Geography Matter for International Specialization? HIID Development Discussion Paper No. 591.Google Scholar
  7. Deardorff A. V. (1995): Determinants of Bilateral trade: Does Gravity Work in a Neoclassical World? NBER Working Paper No. 5377.Google Scholar
  8. Djankov S. and C. Friend (2000): Disintegration and Trade Flows: Evidence from the Soviet Union. World Bank.Google Scholar
  9. Drabek Z. and S. Laird (1997): The New Liberalism: Trade Policy Developments in Emerging Markets. WTO, Geneva.Google Scholar
  10. Feenstra R. C. (1992): How Costly is Protectionism? Journal of Economic Perspectives.Google Scholar
  11. Jensen J., T. Rutherford, and D. Tarr (2002): Economy-Wide and Sector Effects of Russia’s Accession to the WTO. Paper prepared for the New Economic School Tenth Anniversary Conference, Moscow, Russia, December 19-21.Google Scholar
  12. Harrigan J. (2001): Specialisation and the Volume of Trade: Do the Data Obey the Laws? NBER Working Paper No. 8675.Google Scholar
  13. Langhammer R. and M. Lucke (2000): WTO Negotiations and Accession Issues for Vulnerable Economies. Kiel Institute of World Economics, Working Paper No. 990.Google Scholar
  14. Martin C. (1995): The Impact of EU Trade Agreements with Central and East European Countries: The Case of Spain. Universidad Complutense de Madrid, Facultad de Economicas, Documentos de Trabajo series.Google Scholar
  15. Matyas L. (1997): Proper Econometric Specification of the Gravity Model. The World Economy.Google Scholar
  16. Michalopoulos C. (1999): The Integration of Transition Economies Into the World Trading System. Paper presented at the Fifth Dubrovnik Conference on Transition Economies.Google Scholar
  17. Michalopoulos C. (1998): WTO Accession for Countries in Transition. Post-Soviet Prospects 6, No.3.Google Scholar
  18. Michalopoulos C. and D. Tarr (1997): The Economics of Customs Unions in the Commonwealth of Independent States. Policy Research Working Paper, World Bank, April 24.Google Scholar
  19. Oguledo V. I. and C. R. MacPhee (1994): Gravity Model: A Reformulation and an Application to Discriminatory Trade Arrangements. Applied Economics.Google Scholar
  20. O'Driscoll Jr., P. Gerald, E. J. Feulner, and M. A. O'Grady (2002 a): Explaining the Factors of the Index of Economic Freedom. Heritage Foundation.Google Scholar
  21. O'Driscoll Jr., P. Gerald, E. J. Feulner, and M. A. O'Grady (2002 b): The 2002 Index of Economic Freedom. Heritage Foundation.Google Scholar
  22. Poyhonen P. A (1963): Tentative Model for the Flows of Trade Between Countries. Weltwirtschaftliches Archiv.Google Scholar
  23. Prichett L. (1996): Measuring Outward Orientation in LDCs: Can it be Done? Journal of Development Economics.Google Scholar
  24. Radelet S. (1999): Manufacturing Exports, Export Platforms, and Economic Growth. CAER II Discussion Paper No. 43.Google Scholar
  25. Rollo J. (2001): Putting Trade on Track. A Realistic Negotiation agenda for the WTO. A Federal Trust Report. Scholar
  26. Rose A. K. (2002 a): Do We Really Know that the WTO Increases Trade? NBER Working Paper No. 9273.Google Scholar
  27. Rose A. K. (2002 b): Do WTO Members Have More Liberal Trade Policy? NBER Working Paper No. 9347.Google Scholar
  28. Sachs J., C. Zinnes and Y. Eilat (2000): Benchmarking Competitiveness in Transition Economies. CAER II Discussion Paper No. 62.Google Scholar
  29. Schumacher D. (2001): Market Size and Factor Endowment: Explaining Comparative Advantage in Bilateral trade by Difference in Income and Per Capita Income. DIW Discussion Paper No. 259.Google Scholar
  30. Tinbergen J. (1962): Shaping the World Economy: Suggestions for an International Economic Policy. New York: The Twentieth Century Fund.Google Scholar
  31. The South Centre (1999): Issues Regarding the Review of the WTO Dispute Settlement Mechanism.Google Scholar
  32. The South Centre (1999): Special and Differential Treatment for Developing Countries in the WTO.Google Scholar
  33. The WTO Fiftieth Anniversary of the Multilateral Trading System (1998): Press Brief. Scholar
  34. Wall H. J. (1999): Using the Gravity Model to Estimate the Costs of Protection. Federal Reserve Bank of St. Louis.Google Scholar
  35. Xymena C. and J. A Tavares (2000): Quantitative Approach Using Gravity Equation. HIID Development Discussion Paper No. 748.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2004

Authors and Affiliations

  • Igor Eremenko
    • 1
  • Nadiya Mankovska
    • 2
  • James W. Dean
    • 2
  1. 1.Institute for Economic Research and Policy ConsultingKyivUkraine
  2. 2.Simon Fraser UniversityCanada

Personalised recommendations