## _wp04159

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---

### I. Introduction
- Research context:
  - Rose (2002a) concluded—on the basis of a gravity model—that the effect of the WTO on trade was insignificant.
  - Subramanian and Wei (2003) used an augmented gravity specification and argued the WTO strongly promotes trade, with asymmetries across sectors and groups of countries.
  - Debate remains unresolved; asymmetries between members and nonmembers are central to the controversy.
- Objective:
  - Uses a gravity model to evaluate the impact of the WTO on the trade of Russia—currently the largest nonmember.
- Single-country motivations:
  - Gauges insights of multi-country gravity models for a large, diversified country.
  - Assesses WTO-related issues from a national policy perspective.
  - Russia’s accession negotiations provide a reference point for other nonmember countries (notably in the Commonwealth of Independent States (CIS)).
  - Russia’s WTO accession has been contentious domestically and internationally.
- Main summarized conclusions:
  - Cross-section and panel evidence—after adjusting for the customary gravity model and country-specific effects—indicate Russia’s exports to WTO countries underperformed its exports to other countries in 1995–2002.
  - Possible explanations explored: (i) Russia’s nonparticipation in WTO procedures; (ii) Russia’s own export restrictions; (iii) model specification and data caveats; (iv) structural path dependence in Russia’s exports; (v) insufficient quality of Russia’s products; (vi) Russia’s comparative advantage in bargaining with WTO nonmembers.
  - The first two factors are more plausible and consistent with stylized facts.
  - WTO accession expected to relieve factors (i) and (ii); magnitude of trade-related benefits appears quantitatively large in the long term, though precise parameter estimates require caution due to model partiality and data problems.
- Contribution to the WTO debate:
  - A large nonmember like Russia may act as a local center of “gravity” for some non-WTO members; customary gravity-model controls may not fully eliminate this effect.
  - Treating all country observations as independent in multilateral models may bias inferences about the WTO’s role.

### II. Russia’s evolving integration into the world trading system — Trade developments
- Transition and trade opening:
  - After independence in late 1991, Russia transitioned from central planning to a market economy with a focus on trade and comparative advantage.
  - Trade implosion in 1991–92, followed by steady rebound in 1993–2003 (save for a brief slippage in 1997–98).
- Geographical shifts:
  - Reorientation away from former socialist economies toward more advanced market economies.
  - Exports to former socialist economies contracted abruptly; value to those countries more than halved in 1991 alone.
- Geographical structure of exports (In percent of total exports):
  - CIS: 64.0 (1990); 18.5 (1995); 14.6 (2002)
  - EU: 33.6 (1995); 34.9 (2002)
  - Former COMECON: 15.5 (1990); 11.0 (1995); 10.7 (2002)
  - US: 6.6 (1995); 6.1 (2002)
  - China: 4.4 (1995); 6.3 (2002)
- Commodity composition changes (In percent, current U.S. dollar value terms):
  - Agricultural products: 3.3 (1995); 2.6 (2002)
  - Minerals: 42 (1995); 55.2 (2002)
  - Chemical industry products: 9.9 (1995); 7 (2002)
  - Wood, pulp and paper: 5.6 (1995); 4.6 (2002)
  - Textiles: 1.5 (1995); 0.8 (2002)
  - Metals and precious stones: 26.1 (1995); 18.6 (2002)
  - Machinery and transport equipment: 9.9 (1995); 9.5 (2002)
  - Other: 1.7 (1995); 1.7 (2002)
- Macro and structural impacts:
  - Trade contraction exacerbated early output decline and disorganization.
  - Recovery in trade preceded stabilization of output, exchange rate, and prices in the mid-1990s.
  - 1998 currency crisis significantly influenced by adverse shocks to exports; post-1998 recovery relied on reversal of those shocks plus real depreciation of the ruble.
- Policy constraints on trade:
  - Domestic discretionary interference: export restrictions or bans by local governments; federal decisions to tax or restrict exports of energy products starting in 1999.
  - External restrictions: substantial remaining restrictions on Russia’s exports by industrialized and some developing countries, mostly affecting semiprocessed products like metals and chemicals.
  - These policies likely contributed to limited structural change after the early 1990s.

### II.B The WTO entry debate — motivations, opposition, and counterarguments
- Rationale for accession:
  - WTO accession could harmonize Russia’s domestic legislation and practices with those of major trading partners and remove remaining obstacles to exports to WTO members.
  - Russia’s exports to the WTO accounted for “only” about 80 percent of its total exports in 2002, compared with the 95 percent share of the WTO members in world trade.
  - The share of Russia’s exports to WTO countries that were members in 1995 hardly changed in 1995–2002; growth in Russia’s share to all WTO countries largely accounted for by increase in WTO membership.
- Political economy and delays:
  - WTO entry proclaimed as a key policy priority; debate on benefits became ambiguous, causing substantial delays in accession.
- Implication for trade potential:
  - Unused potential for further trade reorientation if accession reduces nonparticipation and export restrictions.

### Econometric specification and data
- Gravity model (Russia-centered) baseline equation includes:
  - X: Russia’s exports to country i
  - D: distance between Russia and country i
  - Products of Russia’s and partner’s GDPs and GDPs per capita
  - Dummy variables: USSR, COMECON, EAEC, BORDER
  - WTO dummy: partner country’s membership in the WTO
- Model features and robustness checks:
  - Additional independent variables: trade regimes and restrictions (tariffs, GSP) and variables to check country and sectoral asymmetries.
  - Border dummy added to partly address "capital distance" distortion given Russia’s geographic size and Moscow-centric distance measure.
  - Focus on WTO (not GATT), justified by institutional differences and timing relative to Russia’s independence.
- Data coverage and sources:
  - Period: 1995–2002
  - Countries: 171 countries (five excluded for measurement error: North Korea, Serbia and Montenegro, Iraq, Bermuda, Cuba)
  - Exports: IMF’s Direction of Trade Statistics; supplemented by Russia’s customs statistics for gaps.
  - Sectoral dummies (metals and oil): Customs Committee of the Russian Federation.
  - World population: United Nations and U.S. Census Bureau.
  - GDP: IMF’s World Economic Outlook (WEO).
  - Distances (capitals to Moscow): software from the U.S. Department of Agriculture website.
  - GSP beneficiary data: UNCTAD database as of June 1, 2001 — 19 countries (15 EU members; 4 are the Czech Republic, Slovak Republic, the United States, and Canada).
  - Estimation tools: Stata 8.0.
- Treatment of zeros and volatility:
  - Observations denoting zero exports treated as missing by Stata, significantly reducing panel observations.
  - Robustness checks: adding 1 under logarithm or assigning negligible values to missing observations did not significantly affect basic regression results.

### Empirical approach and methods
- Methods used:
  - Cross-country OLS regressions (year-specific cross-sections).
  - Pooled OLS regressions for 1995–2002.
  - Panel regressions including time effects, country fixed-effects, “between-effects,” and robustness-augmented specifications.
- Gravity-model controls included:
  - Distance, total GDP, output per capita, former Soviet Union dummy, COMECON dummy, common border, EAEC, customs-union dummy, developed-country dummy, GSP preferences, islands, landlocked, country area, import duties, oil-importer and steel-importer dummies, GATT-94 dummy.
- Standard errors and specification tests:
  - Robust standard errors to account for correlation over time.
  - Real-GDP-weighted least squares tested.
  - Random effects regressions estimated but deemed less appropriate; they produced a small and insignificant negative WTO coefficient.

### Main empirical findings
- Model fit:
  - Gravity model fits Russia’s export data well; R-squared averages some 70 percent across year-specific cross-section regressions.
  - Distance and output coefficients significant with expected signs; distance coefficient generally slightly lower than -1.
  - Sum of coefficients on output and output per capita close to unity.
  - Former Soviet Union and COMECON dummies highly positive and significant.
- WTO variable (core result):
  - WTO coefficient persistently negative in cross-section and most panel regressions.
  - Year-specific cross-sections: WTO coefficient statistically insignificant at the 5 percent level in most years (exception: 1996), often close to significance at the 10 percent level; negligible for 1998.
  - Cross-section regression on means: WTO dummy becomes statistically significant and numerically larger.
  - Pooled regressions: WTO coefficient negative and statistically significant.
  - Cumulative sequential regressions: WTO coefficient rises significantly in 1996, declines through 1998, then stays roughly constant thereafter; remains statistically significant at the 5 percent level in these regressions.
  - Time-effects panel regressions: WTO coefficient continues to be significantly negative.
  - Between-effects estimation: absolute WTO coefficient somewhat larger, in the range of 0.7–0.9, compared with 0.4–0.5 in previous regressions; standard errors increase but coefficient remains robustly statistically significant.
  - Country fixed-effects regression (within estimation): WTO coefficient is positive but not significant at the 10 percent level; interpreted cautiously given short time period and loss of time-invariant controls.
- Other notable variables:
  - Developed-country dummy: negative sign in time-effects regressions, indicating Russia’s exports to developed countries were “limited” ceteris paribus.
  - GSP dummy: positive and statistically significant in some specifications.
  - Oil and steel importer dummies: large, positive, and significant coefficients.
  - GATT-94 dummy: coefficient significantly negative; inclusion does not materially affect broader WTO coefficient.
- Robustness:
  - Results robust across various gravity-model specifications (Linnemann, 1966; Bergstrand, 1985; Wang and Winters, 1992) and to inclusion/exclusion of country-specific variables and quadratic gravity term.
  - Inclusion of islands, landlocked status, country area, import duties, and sectoral asymmetries do not overturn negative WTO coefficient.

### Interpretation, time pattern, and quantitative magnitudes
- Economic interpretation:
  - Main empirical result: within the gravity model, Russia’s WTO coefficient is negative and statistically significant in baseline cross-section and most panel regressions.
  - Interpretation: Russia’s trade structure during 1995–2002 appears “suboptimal” or “different” relative to gravity-model benchmarks—trading “too little” with WTO members and/or “too much” with non-WTO members.
  - Historical/systemic ties: former socialist economies with strong historical ties to Russia account for part of the non-WTO group; regional dummy controls capture some but not all effect.
- Time pattern:
  - WTO coefficient negative and volatile during 1996–98, stabilizing around -0.55 in 1999–2002 (value reported for cross-sections).
- Key quantitative interpretations:
  - Value of WTO coefficient in most regressions suggests that, in the long run, Russia exports on average at least one-third less [exp(-0.4)-1] to members of the WTO than to its trading partners.
  - Upper-bound coefficient estimate of -0.9 in “between” regressions implies an almost 60 percent reduction in exports to WTO members.
  - Numerical simulation caution: regressions imply a potential asymptotic upper bound of a long-run WTO-related export expansion by around 50 percent; magnitude and time profile depend on structural factors not modeled here.

### Factors investigated behind the negative WTO coefficient
- External trade restrictions:
  - Nonmember status may increase vulnerability to antidumping duties, quotas, non-tariff measures.
  - Antidumping activity intensified during 1997–2001 (a fourfold increase in the number of cases during that period).
  - Sectoral dummies: steel importer dummy reduces size of WTO coefficient; oil importer dummy increases absolute size of negative WTO coefficient.
- Domestic export restrictions and de facto constraints:
  - Export duties early in the sample mostly dropped by mid-1996; some restrictions reintroduced in 1999–2000, especially in energy.
  - Monopoly infrastructure (Transneft’) and domestic price controls may have functioned as de facto restrictions.
  - WTO variable significance falls in 1997 and breaks down in 1998 when domestic export restrictions were minimal.
- Structural, quality, bargaining-position hypotheses:
  - Low quality of processed products could deter exports to industrialized markets, but anecdotal counterexamples and prevalence of antidumping cases complicate this explanation.
  - Developed vs. developing WTO members split: developed-country WTO dummy ~ -1.1 and developing-country WTO dummy ~ -0.55 (both significant), indicating greater disadvantage in access to developed-country markets.
- Model specification and endogeneity considerations:
  - Russia-centered specification with Russia fixed addresses some multilateral-resistance concerns.
  - Country fixed-effects regressions do not support a negative endogeneity effect here.
  - Simultaneity bias cannot be fully excluded, but controls and the short horizon mitigate concerns.
  - Deleting CIS/Baltic observations did not materially change negative WTO coefficient.

### Policy implications and recommendations
- WTO accession as policy route:
  - WTO accession is likely the most logical policy route to address the identified bias in Russia’s export structure.
- Expected long-term gains:
  - Potential substantial redirection and/or expansion of Russia’s exports to WTO members (upper-bound simulation suggests around 50 percent expansion in many regressions).
  - Accession may reduce implicit and explicit trade frictions (e.g., antidumping exposure) and promote a level playing field.
- Short- and medium-term caveats:
  - Short-run export expansion may be limited by capacity constraints (metals sector capacity utilization estimated at 70–80 percent in 2000) and need for substantial investment to increase exportable supply.
  - Effect depends on negotiation outcomes and whether WTO membership proxies other factors (e.g., recognition as a market economy for antidumping).
  - Recognitions short of full membership can mitigate some frictions but may not substitute for full WTO membership.
- Trade policy guidance:
  - Entry into the WTO should be pursued to obtain uniformity and a level playing field across regional trading patterns.
  - Given Russia’s size and diversity, multilateral integration via the WTO is favored over purely regional arrangements.
  - Delay in joining the WTO is likely unattractive given the weak pace of voluntary reorientation to date.

### Implications for multilateral WTO-related studies and generalization
- Caution against multilateral averages:
  - Russia case cautions against relying solely on multilateral averages (e.g., Rose 2004) to assess WTO effects; asymmetries matter.
- Three asymmetries highlighted:
  - Member vs. nonmember asymmetry: nonmember disadvantages may be country-specific and offset by pro-WTO effects elsewhere in multilateral averages.
  - Large vs. small country asymmetry: large countries (Russia, China) may face more restrictions because of greater export potential.
  - Political/systemic alliances asymmetry: historical and political alignments can generate localized centers of gravity not fully captured by standard gravity models.
- Domino effect:
  - Costs of nonmembership can motivate accession similar to RTAs; incomplete WTO membership can create costly wedges between members and nonmembers.
- Further recommended work:
  - Detailed empirical analysis of other nonmembers (e.g., Ukraine) to assess Russia specificity.
  - Integration of revealed trade gains into general equilibrium models and more disaggregated sectoral analysis.

### Limitations and avenues for further research
- Gravity estimates should be used cautiously for simulation and policy; need a full macroeconomic model with tradable vs nontradable sector dynamics and capacity utilization to model time profiles and general equilibrium effects.
- Better bilateral measures of trade policy restrictions (including implicit measures) needed to separate external and domestic barrier effects.
- Longer time series and more disaggregated sectoral data would enable testing of sector-specific hypotheses and role of semi-processing sectors.
- Additional country case studies of important nonmembers would help generalize findings beyond Russia.

### Key statistics and numeric facts (selected)
- Sample period: 1995–2002 (eight years).
- Countries in dataset: 171 (five excluded for measurement error).
- Share of Russia’s exports to WTO countries in 2002: about 80 percent.
- WTO membership counts and changes:
  - Members as of January 1, 1995: 76
  - Total WTO members as of end-2003: 146
  - Numbers of observers as of end-2003: 30
- Antidumping, quotas, and other non-tariff restrictions against Russia totaled 120 by mid-2001.
- Sectoral share of antidumping cases against Russia:
  - Ferrous metals: 50 percent
  - Chemicals: 15 percent
  - Machinery and other manufactured goods: 12 percent
  - Fertilizers: 7 percent
- Russia’s metals sector capacity utilization: estimated at 70–80 percent in 2000; capacity utilization increased substantially in 2002–03.
- China illustrative comparison:
  - In 2002–03, China’s annual growth in exports and net foreign direct investment was 27 and 14 percent respectively, compared with corresponding annual averages of 17 and 7 percent over 1992–2001.
- Selected regression coefficients (examples):
  - Cross-section yearly WTO coefficients: 1995: -0.55; 1996: -1.19; 1997: -0.45; 1998: 0.00; 1999: -0.55; 2000: -0.55; 2001: -0.54; 2002: -0.54.
  - Pooled regressions (Table 6): WTO coefficient ~ -0.52.
  - Between-effects regressions (Table 10): WTO coefficient ~ -0.93 in some specifications.
  - Robustness checks (Table 9): WTO coefficient ranges include -0.57, -0.41, -0.41, -0.43, -0.40, -0.35.
  - Cross-country regressions excluding outliers (Table 12): WTO96 coefficient -1.163217 (standard error .2771466).
- Summary statistics (Table A3):
  - log exports: Obs 1043, Mean 3.92, Std. Dev. 2.87, Min -6.86, Max 9.01
  - WTO: Obs 1368, Mean 0.72, Std. Dev. 0.45, Min 0, Max 1
  - log product GDP per capita: Obs 1366, Mean 1.27, Std. Dev. 1.69, Min -2.19, Max 8.16
  - log product GDP: Obs 1366, Mean 8.09, Std. Dev. 2.27, Min 2.04, Max 14.93
  - log distance: Obs 1368, Mean 8.48, Std. Dev. 0.74, Min 6.52, Max 9.71

*Source: _wp04159 - References (excerpted content provided).*

### References .............................................................................................................

### _wp04159 - References .............................................................................................................

### I. INTRODUCTION
- Research context:
  - Rose (2002a) concluded—on the basis of a gravity model—that the effect of the WTO on trade was insignificant.
  - Subramanian and Wei (2003) used an augmented gravity specification and argued the WTO strongly promotes trade, with asymmetries across sectors and groups of countries.
  - Debate remains unresolved; asymmetries between members and nonmembers are central to the controversy.

- Paper objective and motivation:
  - Uses a gravity model to evaluate the impact of the WTO on the trade of Russia—currently the largest nonmember.
  - Motivations for single-country focus:
    - Gauges insights of multi-country gravity models for a large, diversified country.
    - Assesses WTO-related issues from a national (policy) perspective.
    - Russia’s accession negotiations provide a reference point for other nonmember countries (notably in the Commonwealth of Independent States (CIS)).
    - Russia’s WTO accession has been contentious domestically and internationally.

- Main conclusions (summarized):
  - Cross-section and panel data evidence indicate that, after adjusting for the customary gravity model and country-specific effects, Russia’s exports to the WTO countries underperformed its exports to other countries in 1995–2002.
  - Possible explanations explored include:
    - (i) Russia’s nonparticipation in WTO procedures;
    - (ii) Russia’s own export restrictions;
    - (iii) possible model specification and data caveats;
    - (iv) structural path dependence in Russia’s exports;
    - (v) insufficient quality of Russia’s products;
    - (vi) Russia’s comparative advantage in bargaining with WTO nonmembers.
  - The first two factors are more plausible and consistent with stylized facts.
  - With WTO accession expected to relieve factors (i) and (ii), the magnitude of trade-related benefits from joining the WTO appears quantitatively large in the long term, though precise parameter estimates require caution due to model partiality and data problems.

- Contribution to broader WTO debate:
  - A large nonmember like Russia may act as a local center of “gravity” for some non-WTO members; customary gravity-model controls may not fully eliminate this effect.
  - Treating all country observations as independent in multilateral models may bias inferences about the WTO’s role.

### II. RUSSIA’S EVOLVING INTEGRATION INTO THE WORLD TRADING SYSTEM

#### A. Trade Developments
- Transition and trade opening:
  - After independence in late 1991, Russia transitioned from central planning to market economy with a focus on trade and comparative advantage.
  - The shock of Soviet disintegration caused a trade implosion in 1991–92, followed by steady rebound in 1993–2003 (save for a brief slippage in 1997–98).
  - Figure 1: Russia's Exports in 1990–2003 (Billions of current U.S. dollars) shows levels from 1990 through 2003 (visual not reproduced here).

- Geographical shifts:
  - Main trend: reorientation away from former socialist economies toward more advanced market economies.
  - Russia’s exports to former socialist economies contracted abruptly; value to those countries more than halved in 1991 alone (footnote reference to Granville (1995) and data caveats).
  - Since the mid-1990s, changes in geographical composition were limited.

- Table 1. Geographical Structure of Russia’s Exports in 1990, 1995, and 2002 (In percent of total exports):
  - CIS: 64.0 (1990); 18.5 (1995); 14.6 (2002)
  - EU: ... (1990); 33.6 (1995); 34.9 (2002)
  - Former COMECON: 15.5 (1990); 11.0 (1995); 10.7 (2002)
  - US: ... (1990); 6.6 (1995); 6.1 (2002)
  - China: ... (1990); 4.4 (1995); 6.3 (2002)
  - Sources: own calculations based on Direction of Trade Statistics. Daviddi and Espa (1996) for the 1990 data.

- Commodity composition changes:
  - Exports shifted away from machinery toward energy and semiprocessed goods (metals and chemicals).
  - Example: share of machinery in Russia’s exports to non-CIS countries fell from 18 percent in 1990 to 7 percent in 1993 (Daviddi and Espa, 1996).
  - Table 2. Sectoral Structure of Russia’s Exports in 1995 and 2002 (In percent, current U.S. dollar value terms):
    - Agricultural products: 3.3 (1995); 2.6 (2002)
    - Minerals: 42 (1995); 55.2 (2002)
    - Chemical industry products: 9.9 (1995); 7 (2002)
    - Wood, pulp and paper: 5.6 (1995); 4.6 (2002)
    - Textiles: 1.5 (1995); 0.8 (2002)
    - Metals and precious stones: 26.1 (1995); 18.6 (2002)
    - Machinery and transport equipment: 9.9 (1995); 9.5 (2002)
    - Other: 1.7 (1995); 1.7 (2002)
    - Source: Goskomstat

- Macro and structural impacts:
  - Trade contraction exacerbated early output decline and disorganization.
  - Recovery in trade preceded stabilization of output, exchange rate, and prices in the mid-1990s.
  - The 1998 currency crisis was significantly influenced by adverse shocks to exports; post-1998 recovery relied on reversal of those shocks plus real depreciation of the ruble.
  - Trade helped curb barter and noncash economy problems during the 1990s.

- Policy constraints on trade:
  - Domestic discretionary interference: export restrictions or bans by local governments, federal decisions to tax or restrict exports of energy products starting in 1999.
  - External restrictions: substantial remaining restrictions on Russia’s exports by industrialized and some developing countries, mostly affecting semiprocessed products like metals and chemicals.
  - These domestic and external policies likely contributed to limited structural change after the early 1990s.

#### B. The WTO Entry Debate
- Rationale for accession:
  - WTO accession could harmonize Russia’s domestic legislation and practices with those of major trading partners and remove remaining obstacles to exports to WTO members.
  - Despite these potential gains, Russia’s exports to the WTO accounted for “only” about 80 percent of its total exports in 2002 (Figure 3), compared with the 95 percent share of the WTO members in world trade.
  - The share of Russia’s exports to WTO countries that became members in 1995 hardly changed in 1995–2002; growth in Russia’s share to all WTO countries largely accounted for by increase in WTO membership.

- Political economy and delays:
  - WTO entry proclaimed as a key policy priority for Russia, but debate on benefits has become more ambiguous, causing substantial delays in the accession process.

- Implication for trade potential:
  - There remains unused potential for further trade reorientation if accession reduces nonparticipation and export restrictions.
  - A chronology of Russia’s ongoing WTO accession process is provided in Appendix Table A1 (not reproduced here).

*Source: _wp04159 - References (excerpted content provided).*

### Appendix Table A1.

### Appendix Table A1.

### Figure 3 — Share of Russia’s exports to WTO countries (1995-2002)
- Chart axes and labels as presented:
  - Years covered: 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002
  - Two series: "WTO" and "WTO95"
- Source: Direction of Trade Statistics, IMF
- Note: the WTO series shows the share of Russia’s exports to all WTO members in each year, while the WTO-95 series gives the same indicator only for those countries that were WTO members by the end of 1995.

### Debate over Russia’s benefits from WTO membership — considerations and counterarguments
- Factors generating uncertainty and opposition:
  - Reduced global optimism about free trade following events in Seattle and Cancun.
  - Argument that additional gains from membership would be limited because Russia already enjoys most-favored-nation (MFN) status from many WTO members and preferential treatment under the Generalized System of Preferences (GSP) from some advanced countries.
  - Concern that Russia’s "concessions" (lower tariffs) and possible short-term output contraction would "far outweigh" export benefits.
  - Conditionality during accession, particularly liberalization of domestic energy prices, perceived as economically and socially unpopular.
  - Determined opposition from sectoral lobbies and ideological opponents of economic "liberalism".
- Advocates’ counterarguments:
  - Benefits from past and future trade liberalizations largely accrue to WTO members; nonmembers benefit much less.
  - Membership confers "intangibles" such as access to the WTO dispute settlement body, important for establishing a "level playing field".
  - Outsider status deprives Russia not only of automatic MFN treatment but also of the option of defending its interests through WTO institutions.
  - Possible short-term losses from import competition may be manageable relative to longer-term efficiency gains from a level playing field, pro-market structural reforms, and constraints on vested interests.

### Existing quantitative studies and their findings
- RAS (Russian Academy of Sciences) and National Investment Council (RAS, 2002):
  - Method: input-output model focused on accession-related reductions in import duties for sectoral and regional output dynamics.
  - Overall output effect estimated at 1 percent of GDP.
- Jensen, Rutherford, and Tarr (2002):
  - Method: computable general equilibrium (CGE) model including changes in import duties and effects of foreign investment.
  - Conclusion: foreign investment likely to account for up to 70 percent of Russia’s benefits from WTO accession.
  - GDP gains estimated to range from 3 percent in the medium term to about 25 percent in the longer term.
- Alexeev and others (2003):
  - Method: CGE model, assuming enhanced export competitiveness with lower import duties.
  - Result: a broad-based but very modest estimate of a 0.9 percent export expansion.
- Berglof and others (2003):
  - Assessment of actual restrictions on Russia’s exports across sectors.
  - Estimated shortfall from nonmembership at US$3 billion, or about 3 percent of Russia’s total exports.
- Gaps identified:
  - Lack of comprehensive projection of accession effect on Russia’s exports, especially longer-term general equilibrium effects.
  - No studies known that explore the general equilibrium export effect within models of Russia’s external trade such as the gravity model.

### Econometric specification — gravity model used
- Purpose:
  - Employ a "Russia-centered" gravity model to evaluate Russia’s trade determinants and patterns with particular reference to the role of the WTO.
- Baseline equation (as presented):
  - Equation 1
    ii iii irus irus ii
    WTO BORDEREAEC COMECON SSR)y*ln(y)Y*ln(Y)ln(D )(XLn +++++++=U
  - Interpretation of variables in text:
    - X: Russia’s exports to country i
    - D: distance between Russia and country i
    - Products of Russia’s and partner’s GDPs and GDPs per capita
    - Dummy variables: USSR, COMECON, EAEC (Eurasian Economic Community), BORDER (bordering countries)
    - WTO dummy: partner country’s membership in the WTO
- Model features and robustness checks:
  - Additional independent variables to be added for robustness, including trade regimes and restrictions (tariffs, GSP) and variables to check country and sectoral asymmetries (as identified by Subramanian and Wei (2003)).
  - Border dummy added to partly address the "capital distance" distortion given Russia’s geographic size and Moscow-centric distance measure.
  - Focus explicitly on WTO (not GATT), justified by institutional differences and timing relative to Russia’s independence and market-guided trade flows.

### Data: coverage, sources, and peculiarities
- Time span and coverage:
  - Period: 1995–2002
  - Number of countries encompassed: 171 countries
  - Effective span described as eight years from 1995 to 2002
- Exclusions and sensitivity:
  - Five countries excluded for likely measurement error and incomplete observations: North Korea, Serbia and Montenegro, Iraq, Bermuda, and Cuba.
  - Footnote: Including estimates for these countries and territories does not alter statistical significance or qualitative nature of results.
- Data sources:
  - Exports: IMF’s Direction of Trade Statistics, supplemented by Russia’s customs statistics for occasional gaps.
  - Sectoral dummy variables (metals and oil): Customs Committee of the Russian Federation.
  - World population: United Nations and U.S. Census Bureau.
  - GDP figures: IMF’s World Economic Outlook (WEO) database.
  - Distances (capitals to Moscow): computer software available from the U.S. Department of Agriculture website.
  - GSP beneficiary data: UNCTAD database listing countries that granted Russia GSP status as of June 1, 2001 — 19 countries, of which 15 are EU members and 4 are the Czech Republic, Slovak Republic, the United States, and Canada.
- Classification notes:
  - "Developed" and "developing" country classification follows Subramanian and Wei (2003) broadly, with slight differences from other classifications including within the WTO.
- Estimation tools:
  - All regressions performed using Stata 8.0.

_Italic: Source — _wp04159 - Appendix Table A1. (PDF)_

### Appendix Table A3. Data on Russia’s exports in 1995–2002 exhibit significant volatility

### _wp04159 - Appendix Table A3. Data on Russia’s exports in 1995–2002 exhibit significant volatility

### Data and measurement issues
- Exports data for 1995–2002 exhibit significant volatility; exports to most countries in Africa and Latin America emerge only toward the second half of the 1995–2002 period.
- Conversion to natural logarithms: observations denoting zero exports were treated as missing by Stata, significantly reducing the number of observations in the panel.
- Robustness checks on zeros: data were also transformed by either adding 1 under the logarithm or by assigning negligible values to missing observations; these changes did not have a significant effect on the basic regression results.

### Econometric approach
- Methods employed:
  - Cross-country ordinary least squares (OLS) regressions (year-specific cross-sections).
  - Pooled OLS regressions on all observations for 1995–2002.
  - Panel regressions including time effects, country fixed-effects, “between-effects,” and robustness-augmented specifications.
- Gravity-model variables and controls used (as described):
  - Distance, total GDP, output per capita, former Soviet Union dummy, COMECON dummy, common border, EAEC, customs-union dummy, developed-country dummy, GSP preferences, islands, landlocked, country area, import duties, oil-importer and steel-importer dummies, GATT-94 dummy.
- Tests for standard errors and specification:
  - Robust standard errors to account for correlation of country observations over time.
  - Real-GDP-weighted least squares (not shown) tested.
  - Random effects regressions were estimated but deemed less appropriate; they produced a small and insignificant negative WTO coefficient.

### Main empirical findings
- Overall model fit:
  - Gravity model fits Russia’s export data well; R-squared averages some 70 percent across year-specific cross-section regressions.
  - Distance and output coefficients are significant with expected signs and magnitudes; distance coefficient generally slightly lower than -1.
  - Sum of coefficients on output and output per capita is close to unity.
  - Former Soviet Union and COMECON dummies are highly positive and significant.
  - Common border and EAEC dummies have expected signs but are generally not significant at the 5–10 percent levels.
- WTO variable (core result):
  - WTO coefficient is persistently negative in cross-section and most panel regressions.
  - In most year-specific cross-sections the WTO coefficient is statistically insignificant at the 5 percent level (exception: 1996), but often close to significance at the 10 percent level; it is negligible for 1998.
  - Cross-section regression on means: WTO dummy becomes statistically significant and numerically larger.
  - Pooled regressions: WTO coefficient negative and statistically significant (first column of Table 6); customs-union and border dummies become statistically significant at the 5 percent level with pooled data.
  - Cumulative sequential regressions (Table 7): WTO coefficient rises significantly in 1996, declines persistently through 1998, then stays roughly constant thereafter; WTO coefficient remains statistically significant at the 5 percent level in these regressions.
  - Time-effects panel regressions: WTO coefficient continues to be significantly negative.
  - Between-effects estimation (group averages): absolute estimate of the WTO coefficient is somewhat larger, in the range of 0.7–0.9, compared with 0.4–0.5 in previous regressions; standard errors increase but coefficient remains robustly statistically significant.
  - Country fixed-effects regression (within estimation): WTO coefficient is positive but not significant at the 10 percent level; interpreted cautiously due to short time period, small number of observations, and loss of time-invariant controls.
- Other notable variable results:
  - Developed-country dummy: negative sign in time-effects regressions, indicating Russia’s exports to developed countries were “limited” compared with others, ceteris paribus.
  - GSP dummy: positive sign and statistically significant in some specifications.
  - Oil and steel importer dummies: large, positive, and significant coefficients.
  - GATT-94 dummy (founding WTO members): coefficient significantly negative; its inclusion does not materially affect the broader WTO coefficient.
- Robustness:
  - Results robust across various gravity-model specifications (Linnemann, 1966; Bergstrand, 1985; Wang and Winters, 1992) and to inclusion/exclusion of country-specific variables and quadratic gravity term.
  - Robustness checks including islands, landlocked status, country area, import duties, and sectoral asymmetries do not overturn negative WTO coefficient.

### Interpretation and implications
- Economic interpretation:
  - Main empirical result: within the gravity model, Russia’s WTO coefficient is negative and statistically significant in baseline cross-section and most panel regressions.
  - Interpretation: Russia’s trade structure during 1995–2002 appears “suboptimal” or “different” relative to gravity-model benchmarks—trading “too little” with WTO members and/or “too much” with non-WTO members.
  - Historical/systemic ties: part of the non-WTO group comprises former socialist economies with strong historical ties to Russia; regional dummy controls capture some but not all of this effect.
- Time pattern:
  - WTO coefficient negative and volatile during 1996–98, stabilizing around -0.55 in 1999–2002 (value reported for cross-sections).
- Caveats and limitations:
  - Cross-section regressions lose observations and disregard time variation, possibly yielding inconsistent estimates.
  - Pooled regressions impose identical coefficients across countries and may induce misspecification.
  - Country fixed-effects (within) estimates are constrained by short time span, small sample size, and loss of time-invariant controls such as distance and regional dummies.
- Policy-relevant inference:
  - The negative WTO coefficient suggests that Russia’s partners being WTO members is associated with lower bilateral exports from Russia, holding gravity factors constant, over the 1995–2002 period.
  - Fixed-effects “within” estimates weakly (not significant at 10 percent) suggest that accession to the WTO by partner countries may have favored Russian exports at the margin, but this inference is tentative given data and modeling constraints.

*Source: _wp04159 - Appendix Table A3. Data on Russia’s exports in 1995–2002 exhibit significant volatility*

### 1995. This indicates that the extent of anti-WTO trade bias appeared to be roughly constant

### _wp04159 - 1995. This indicates that the extent of anti-WTO trade bias appeared to be roughly constant

### Main findings on Russia’s anti-WTO trade bias (1995–2002)
- Russia’s trade structure was tilted significantly away from WTO members after controlling for gravity and several country- and region-specific factors.
- The value of the WTO coefficient in most regressions suggests that, in the long run, Russia exports on average at least one-third less [exp(-0.4)-1] to members of the WTO than to its trading partners.
- The upper-bound coefficient estimate of -0.9 in the “between” regressions implies an almost 60 percent reduction in exports to WTO members.
- The pooled and sequential pooled regressions indicate the bias was roughly constant over the sample period (with a spike in 1996).
- Fixed-effects regression with country-specific dummies suggests Russia’s trade with the WTO was encouraged at the margin for about 30 countries that joined the WTO after 1995 (the WTO coefficient in that specification is positive but insignificant).
- Evidence of trade reorientation toward the gravity-predicted pattern is limited: the “within” reorientation effect mainly applies to new WTO members and does not apply to advanced economies.
- Numerical simulation caution: the regressions imply a potential asymptotic upper bound of a long-run WTO-related export expansion by around 50 percent, but the magnitude and time profile depend on structural factors not modeled here.

### Key quantitative facts and statistics cited
- Table 3: WTO membership counts
  - Members as of January 1, 1995: 76
  - 1995: 112*  (note: * including those countries that became members of the WTO as of January 1, 1995)
  - 1996: 16
  - 1997: 4
  - 1998: 1
  - 1999: 2
  - 2000: 5
  - 2001: 3
  - 2002: 1
  - 2003: 2
  - Total WTO members as of end-2003: 146
  - Numbers of observers as of end-2003: 30
- Antidumping, quotas, and other non-tariff restrictions against Russia totaled 120 by mid-2001.
- Sectoral share of antidumping cases against Russia:
  - Ferrous metals: 50 percent
  - Chemicals: 15 percent
  - Machinery and other manufactured goods: 12 percent
  - Fertilizers: 7 percent
- Russia’s metals sector capacity utilization:
  - estimated at 70–80 percent in 2000 (FIRA 2001); capacity utilization increased substantially in 2002–03.
- Simulated long-run export expansion to WTO members according to most regressions: by around 50 percent.
- China’s performance around WTO accession (contextual comparison):
  - In 2002–03, China’s annual growth in exports and net foreign direct investment was 27 and 14 percent respectively, compared with corresponding annual averages of 17 and 7 percent over the decade prior to its WTO entry (1992–2001).
- Regression coefficient examples (selected):
  - Cross-section yearly results (Table 4): WTO coefficients by year — 1995: -0.55; 1996: -1.19; 1997: -0.45; 1998: 0.00; 1999: -0.55; 2000: -0.55; 2001: -0.54; 2002: -0.54 (standard errors shown in original tables).
  - Pooled regressions (Table 6): WTO coefficient ~ -0.52 (with variations across robustness checks).
  - Between-effects regressions (Table 10): WTO coefficient ~ -0.93 in some specifications.
  - Robustness checks (Table 9): WTO coefficient ranges including -0.57, -0.41, -0.41, -0.43, -0.40, -0.35 (time effects; various models).
- Cross-country regressions excluding outliers (Table 12): WTO96 coefficient -1.163217 (standard error .2771466).

### Factors investigated behind the regression results
- External (partner-imposed) trade restrictions
  - Nonmember status may make Russia more vulnerable to explicit and implicit trade barriers (antidumping duties, quotas, non-tariff measures).
  - Antidumping activity intensified during 1997–2001 (a fourfold increase in the number of cases during that period).
  - Inclusion of sectoral dummies (oil, steel) influences the WTO coefficient:
    - Steel importer dummy (sector with prevalent restrictions) reduces the size of the WTO coefficient.
    - Oil importer dummy (sector with fewer perceived import restrictions) increases the absolute size of the negative WTO coefficient.
- Domestic export restrictions and de facto constraints
  - Export duties existed early in the sample and were mostly dropped by mid-1996; some restrictions reintroduced in 1999–2000, especially in the energy sector.
  - Monopoly infrastructure (Transneft’) and domestic price controls may have functioned as de facto restrictions.
  - Cross-section results: the WTO variable’s significance falls in 1997 and breaks down in 1998 when domestic export restrictions were minimal.
- Structural, quality, and bargaining-position hypotheses
  - Low quality of processed products might deter exports to industrialized (WTO) markets, but anecdotal counterexamples (e.g., Severstal) and the prevalence of antidumping cases complicate this explanation.
  - Russia’s bargaining position with some relatively small and dependent economies could bias results, but the real GDP coefficient (~unity) suggests standard size effects hold.
- Model specification issues and potential biases
  - Multilateral resistance / fixed effects: Russia-centered specification with Russia fixed addresses some multilateral-resistance concerns; country fixed-effects regression is analogous to estimating pair fixed effects.
  - Endogeneity concerns: joining the WTO is protracted; country fixed-effects regressions do not support a negative endogeneity effect here.
  - Simultaneity bias (third factors correlated with both WTO nonmembership and pro-Russia trade) cannot be fully excluded, but controls and the short horizon mitigate concerns.
  - Country-specific patterns (CIS/Baltic grouping): deleting CIS/Baltic observations did not materially change the negative WTO coefficient.
  - Developed vs. developing WTO members: splitting WTO dummy yields developed-country WTO dummy ~ -1.1 and developing-country WTO dummy ~ -0.55 (both significant), indicating greater disadvantage in access to developed-country markets.

### Policy implications and recommendations for Russia’s WTO accession
- WTO accession is likely the most logical policy route to address the identified bias in Russia’s export structure.
- Expected long-term gains:
  - Potential substantial redirection and/or expansion of Russia’s exports to WTO members (upper-bound simulation suggests around 50 percent expansion in many regressions), though the timing and composition (expansion vs reorientation) are uncertain.
  - WTO accession may reduce implicit and explicit trade frictions (e.g., antidumping exposure) and promote a level playing field.
- Short- and medium-term caveats:
  - Short-run export expansion may be limited by capacity constraints (metals sector capacity utilization high) and the need for substantial investment to increase exportable supply.
  - The effect of accession depends on the outcome of negotiations and on whether WTO membership proxies other factors (e.g., recognition as a market economy for antidumping).
  - Recognitions short of full membership (e.g., market-economy status by late 2002) can mitigate some frictions but may not substitute for full WTO membership.
- Trade policy guidance:
  - Entry into the WTO should be pursued to obtain uniformity and a level playing field across regional trading patterns.
  - Given Russia’s size and diversity, multilateral integration via the WTO is favored over purely regional arrangements.
  - Delay in joining the WTO is likely unattractive given the weak pace of voluntary reorientation to date.

### Implications for multilateral WTO-related studies and generalization
- The Russia case cautions against relying solely on multilateral averages (e.g., Rose 2004) to assess WTO effects; asymmetries matter.
- Three asymmetries highlighted:
  - Member vs. nonmember asymmetry: nonmember disadvantages may be country-specific and can be offset by pro-WTO effects elsewhere in multilateral averages.
  - Large vs. small country asymmetry: large countries (Russia, China) may face more restrictions because of their greater export potential.
  - Political/systemic alliances asymmetry: historical and political alignments (e.g., postwar socialist vs. capitalist blocs) can generate localized centers of gravity not fully captured by standard gravity models.
- The “domino effect” argument: costs of nonmembership can motivate accession, similar to RTAs; incomplete WTO membership can create costly wedges between members and nonmembers.
- Further work recommended:
  - More detailed empirical analysis of other nonmembers’ trade patterns (e.g., Ukraine) to assess how Russia-specific the anti-WTO bias is.
  - Integration of revealed trade gains into general equilibrium models and more disaggregated sectoral analysis to examine sectoral asymmetries and semi-processing sectors.

### Limitations and avenues for further research
- Gravity estimates should be treated cautiously for simulation and policy purposes; a full macroeconomic model with tradable vs nontradable sector dynamics and capacity utilization is needed to model time profiles and general equilibrium effects.
- Better pairwise, bilateral measures of trade policy restrictions (including implicit measures) are needed to separate the effects of external and domestic barriers.
- Longer time series and more disaggregated sectoral data would allow testing of sector-specific hypotheses and the role of semi-processing sectors in growth and restructuring.
- Additional country case studies of important nonmembers would help generalize findings beyond Russia.

*Source: _wp04159 (1995–2003 regression results and analysis) — content excerpt provided in the source PDF unit.*

### REFERENCES

### _wp04159 - REFERENCES

### References
- Alexeev A., N. Tourdyeva, and K. Yudayeva, 2003, “Estimation of Russia’s Trade Policy Options with the Help of the Computable General Equilibrium Model,” (Moscow: CEFIR). Available via the Internet at: http://www.cefir.org/Papers/CGEM.pdf
- Anderson, J., and E. van Wincoop, 2003, “Gravity with Gravitas: A Solution to the Border Puzzle,” American Economic Review, Vol. 93, No. 1, pp. 170–92.
- Berglof E., and others, 2003, The New Political Economy of Russia, (Cambridge, Massachusetts: MIT Press).
- Bergstrand, J.H., 1985, “The Gravity Equation in International Trade: Some Macroeconomic Foundations and Empirical Evidence,” Review of Economics and Statistics, Vol. 67, pp. 474–81.
- Blanchard, O., and M. Kremer, M., 1997 “Disorganization,” Quarterly Journal of Economics, Vol. 112 (November), pp. 1091–126.
- Daviddi, R., and E. Espa, 1996, “The Liberalization of the Foreign Trade of the Russian Federation and the Accession to the WTO,” in Russia and The World Economy, ed. by G. Mureddu and M.T. Salvemini (Rome: La Sapienza).
- Dean J., Eremenko I., and N. Mankovska, 2003, “Will WTO Membership Really Improve Market Access for Ukrainian Exports?” paper presented on the 37th annual meeting of the Canadian Economic Society, June.
- Elborgh-Woytek, K., 2003, “Of Openness and Distance: Trade Developments in the Commonwealth of Independent States, 1993–2002,” IMF Working Paper 03/207 (Washington: International Monetary Fund).
- First Independent Rating Agency (FIRA), 2001, Research Report on Ferrous Metallurgy (in Russian). Available via the Internet at: www.fira.ru.
- Granville, B., 1995, The Success of Russian Economic Reforms (London: Royal Institute of International Affairs).
- Greenaway, D., and C. Milner, 2002, “Regionalism and Gravity,” Leverhulme Centre Research Paper No. 2002/20 (Nottingham, England: University of Nottingham, Leverhulme Centre).
- Gros D., and A. Steinherr, 1995, Winds of Change: Economic Transition in Central and Eastern Europe (London and New York: Longman).
- Hufbauer, G.C., and B. Oegg, 2003, “The Impact of Economic Sanctions on U.S. Trade: Andrew Rose’s Gravity Model,” International Economic Policy Briefs No. PB03-4 (Washington: Institute for International Economics).
- 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.
- Linnemann H., 1966, An Econometric Study of International Trade Flows (Amsterdam: North-Holland).
- Lissovolik, Y., and N. Liventsev, 2002, Actualnyye Problemy Prisoyedineniya Rossii k VTO (Moscow: Ekonomika).
- Matyas, L., 1997, “Proper Econometric Specification of the Gravity Model,” World Economy, Vol. 20 (May), pp. 363–68.
- Russian Academy of Sciences and the National Investment Council (RAS), 2002, The Implications of Russia’s Accession to the WTO for the National Economy (Moscow: RAS).
- Rose, A.K., 2002a, “Do We Really Know that the WTO Increases Trade?” NBER Working Paper No. 9273 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Rose, A.K., 2002b, “Do WTO Members Have More Liberal Trade Policy?” NBER Working Paper No. 9347 (Cambridge, Massachusetts: National Bureau of Economic Research).
- Rose, A.K., 2004, “Do We Really Know that the WTO Increases Trade?” American Economic Review, Vol. 94 (March), pp. 98–114.
- Sapir, A., 2001, “Domino Effects in Western European Trade, 1960-92,” European Journal of Political Economy Vol. 17 (June), 377–88.
- Subramanian, A., and Shang-Jin Wei, 2003, “The WTO Promotes Trade, Strongly but Unevenly,” IMF Working Paper 03/185 (Washington: International Monetary Fund).
- van Selm, B., 1997, “The Economics of Soviet Break-Up” (London: Routledge).
- Wang, Z.K., and L.A. Winters, 1992, “The Trading Potential of Eastern Europe,” Journal of Economic Integration Vol. 7, pp. 113–36.

### Appendix — Chronology of Russia’s WTO Accession Process (Table A1)
- Stages of accession:
  - 1. Request for accession — 1993
  - 2. Memorandum on the foreign trade regime to be submitted to the Working Party — March 1994, May 2001, November 2001
  - 3. Questions and replies: the submission of the memorandum is to be followed by examination of questions (by the members of the Working Party) and answers of the acceding country — June 1995, June 1996
  - 3. Working Party multilateral negotiations, which are to determine the general conditions of accession, including commitments to observe WTO rules and the length of transitional periods necessary to insure their implementation — 20 meetings of the Working Party in 1995-2003
  - 4. Working Party bi-lateral negotiations. Each accession working party takes decisions by consensus, hence the accession country needs to reach an agreement with all of the members of the Working Party. Agreements on market access concluded with several countries, including with the EU in May 2004.
  - 5. The accession package:
    - The results of the negotiations are reflected in three documents, which form the so-called “accession package”:
      - Report of the Working Party that contains a summary of proceedings and conditions of entry
      - Protocol of Accession The document provides all the general terms and conditions of membership, including the areas of the administration of trade regime, non-discrimination, the use of non-tariff measures, etc.
      - Schedules of market access commitments in goods and services that reflect the agreements reached with the members of the Working Party by the acceding country
    - Draft Working Party Reports — (March 2002, November 2002, May 2003)

### Appendix — Definition of Variables (Table A2)
- Log exports: Natural logarithm of Russia’s annual exports in 1995-2002 deflated by US CPI
- Log turnover: Natural logarithm of Russia’s annual trade turnover in 1995-2002 deflated by US CPI
- Log product GDP: Natural logarithm of the product of Russia’s GDP and that of Russia’s trade partners in 1995-2002 deflated by US CPI
- Log product GDP per capita: Natural logarithm of the product of Russia’s GDP per capita and that of Russia’s trade partners in 1995-2002 deflated by US CPI
- Log distance: Natural logarithm of the distance from Moscow to the capitals of Russia’s trade partners
- COMECON: Dummy variable (1=former COMECON member (GDR excluded), 0=not a former member of COMECON)
- WTO: Dummy variable (1=member of the WTO, 0=the country is not a member of the WTO)
- USSR: Dummy variable (1=former member of the USSR, 0=not a former member of the USSR)
- EAEC: Dummy variable (1=member of EAEC, 0=not a member of EAEC)
- Developed: Dummy variable (1=developed country, 0=developing country)
- GSP: Dummy variable (1=trading partner accords GSP to Russia, 0=trading partner does not accord GSP treatment to Russia)
- Island: Dummy variable (1=island country, 0=non-island country)
- Landlocked: Dummy variable (1=landlocked country, 0=non-landlocked country)
- Log product area: Natural logarithm of the product of Russia’s area (in sq. km) and that of Russia’s trade partners
- Oil: Dummy variable (1=importer oil, from Russia in 1995, 0=all other countries)
- Steel: Dummy variable (1=importer of steel from Russia, 0=all other countries)
- GATT-94: Dummy variable (1=member of the WTO as of January 1, 1995, 0=all other countries)
- Import duties: Natural logarithm of the average import tariff in Russia’s trading partners.
- DPingWTO: Dummy variable (1=developing country that is a member of the WTO, 0=all other countries)

### Appendix — Summary Statistics (Table A3)
- log exports: Obs 1043, Mean 3.92, Std. Dev. 2.87, Min -6.86, Max 9.01
- WTO: Obs 1368, Mean 0.72, Std. Dev. 0.45, Min 0, Max 1
- log product GDP per capita: Obs 1366, Mean 1.27, Std. Dev. 1.69, Min -2.19, Max 8.16
- log product GDP: Obs 1366, Mean 8.09, Std. Dev. 2.27, Min 2.04, Max 14.93
- log distance: Obs 1368, Mean 8.48, Std. Dev. 0.74, Min 6.52, Max 9.71
- COMECON: Obs 1368, Mean 0.05, Std. Dev. 0.22, Min 0, Max 1
- USSR: Obs 1368, Mean 0.08, Std. Dev. 0.27, Min 0, Max 1
- Border: Obs 1368, Mean 0.08, Std. Dev. 0.27, Min 0, Max 1
- EAEC: Obs 1368, Mean 0.02, Std. Dev. 0.15, Min 0, Max 1
- Developed: Obs 1368, Mean 0.13, Std. Dev. 0.34, Min 0, Max 1
- GSP: Obs 1368, Mean 0.11, Std. Dev. 0.31, Min 0, Max 1
- Island: Obs 1368, Mean 0.18, Std. Dev. 0.39, Min 0, Max 1
- Landlocked: Obs 1367, Mean 0.20, Std. Dev. 0.40, Min 0, Max 1
- Log product area: Obs 1368, Mean 14.47, Std. Dev. 2.37, Min 6.81, Max 18.95

### Appendix — List of WTO Members (Table A4)
- WTO members (as of June, 2004):
  - Albania 8 September 2000, Angola 23 November 1996, Antigua and Barbuda 1 January 1995, Argentina 1 January 1995, Armenia 5 February 2003, Australia 1 January 1995, Austria 1 January 1995, Bahrain, Kingdom of 1 January 1995, Bangladesh 1 January 1995, Barbados 1 January 1995, Belgium 1 January 1995, Belize 1 January 1995, Benin 22 February 1996, Bolivia 12 September 1995, Botswana 31 May 1995, Brazil 1 January 1995, Brunei Darussalam 1 January 1995, Bulgaria 1 December 1996, Burkina Faso 3 June 1995, Burundi 23 July 1995, Cameroon 13 December 1995, Canada 1 January 1995, Central African Republic 31 May 1995, Chad 19 October 1996, Chile 1 January 1995, China 11 December 2001, Colombia 30 April 1995, Congo 27 March 1997, Costa Rica 1 January 1995, Côte d'Ivoire 1 January 1995, Croatia 30 November 2000, Cuba 20 April 1995, Cyprus 30 July 1995, Czech Republic 1 January 1995, Democratic Republic of the, Congo 1 January 1997, Denmark 1 January 1995, Djibouti 31 May 1995, Dominica 1 January 1995, Dominican Republic 9 March 1995, Ecuador 21 January 1996, Egypt 30 June 1995, El Salvador 7 May 1995, Estonia 13 November 1999, European Communities 1 January 1995, Fiji 14 January 1996, Finland 1 January 1995, Former Yugoslav Republic of Macedonia (FYROM) 4 April 2003, France 1 January 1995, Gabon 1 January 1995, The Gambia 23 October 1996, Georgia 14 June 2000, Germany 1 January 1995, Ghana 1 January 1995, Greece 1 January 1995, Grenada 22 February 1996, Guatemala 21 July 1995, Guinea 25 October 1995, Guinea Bissau 31 May 1995, Guyana 1 January 1995, Haiti 30 January 1996, Honduras 1 January 1995, Hong Kong, China 1 January 1995, Hungary 1 January 1995, Iceland 1 January 1995, India 1 January 1995, Indonesia 1 January 1995, Ireland 1 January 1995, Israel 21 April 1995, Italy 1 January 1995, Jamaica 9 March 1995, Japan 1 January 1995, Jordan 11 April 2000, Kenya 1 January 1995, Korea, Republic of 1 January 1995, Kuwait 1 January 1995, Kyrgyz Republic 20 December 1998, Latvia 10 February 1999, Lesotho 31 May 1995, Liechtenstein 1 September 1995, Lithuania 31 May 2001, Luxembourg 1 January 1995, Macao, China 1 January 1995, Madagascar 17 November 1995, Malawi 31 May 1995, Malaysia 1 January 1995, Maldives 31 May 1995, Mali 31 May 1995, Malta 1 January 1995, Mauritania 31 May 1995, Mauritius 1 January 1995, Mexico 1 January 1995, Moldova 26 July 2001, Mongolia 29 January 1997, Morocco 1 January 1995, Mozambique 26 August 1995, Myanmar 1 January 1995, Namibia 1 January 1995, Nepal 23 April 2004, Netherlands — For the Kingdom in Europe and for the Netherlands Antilles 1 January 1995, New Zealand 1 January 1995, Nicaragua 3 September 1995, Niger 13 December 1996, Nigeria 1 January 1995, Norway 1 January 1995, Oman 9 November 2000, Pakistan 1 January 1995, Panama 6 September 1997, Papua New Guinea 9 June 1996, Paraguay 1 January 1995, Peru 1 January 1995, Philippines 1 January 1995, Poland 1 July 1995, Portugal 1 January 1995, Qatar 13 January 1996, Romania 1 January 1995, Rwanda 22 May 1996, Saint Kitts and Nevis 21 February 1996, Saint Lucia 1 January 1995, Saint Vincent & the Grenadines 1 January 1995, Senegal 1 January 1995, Sierra Leone 23 July 1995, Singapore 1 January 1995, Slovak Republic 1 January 1995, Slovenia 30 July 1995, Solomon Islands 26 July 1996, South Africa 1 January 1995, Spain 1 January 1995, Sri Lanka 1 January 1995, Suriname 1 January 1995, Swaziland 1 January 1995, Sweden 1 January 1995, Switzerland 1 July 1995, Chinese Taipei 1 January 2002, Tanzania 1 January 1995, Thailand 1 January 1995, Togo 31 May 1995, Trinidad and Tobago 1 March 1995, Tunisia 29 March 1995, Turkey 26 March 1995, Uganda 1 January 1995, United Arab Emirates 10 April 1996, United Kingdom 1 January 1995, United States of America 1 January 1995, Uruguay 1 January 1995, Venezuela 1 January 1995, Zambia 1 January 1995, Zimbabwe 5 March 1995
- Observer governments:
  - Algeria, Andorra, Azerbaijan, Bahamas, Belarus, Bhutan, Bosnia and Herzegovina, Cambodia, Cape Verde, Equatorial Guinea, Ethiopia, Holy See (Vatican), Iraq, Kazakhstan, Lao People's Democratic Republic, Lebanese Republic, Russian Federation, Samoa, Sao Tome and Principe, Saudi Arabia, Serbia and Montenegro, Seychelles, Sudan, Tajikistan, Tonga, Ukraine, Uzbekistan, Vanuatu, Viet Nam, Yemen

*Source: _wp04159 - REFERENCES (PDF).*

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