Feasibility of Joining Iran to WTO Using Economic Freedom Indicators

This paper aims to analyze the relationship between the degree of economic freedom indicators and WTO accession prerequisites. Moreover, it examines the gap between the accession criteria in Iran and the WTO members and evaluates the sensitivity of this gap to the degree of various economic freedom indicators and finally, this study proposes some guidelines to improve the degree of economic freedom indicators that, in turn, will prepare the country to access to WTO. The selected criteria of prerequisites for accessing WTO comprise trade liberalization, custom duties and integration of international trade (IIT). The panel data regression analysis is employed using the 73 WTO member's data. Three regression equations are identified and estimated. Sorting the estimated values from small to large, the lower and upper limits of each criterion is identified in the member countries. The maximum and minimum estimated values of trade liberalization criterion in WTO member countries are 0.743 and 0.922, respectively. For Iran, the estimated value is 0.730 which shows a gap between Iran and the sample of 73 WTO member's countries. In addition, the maximum and minimum estimated values of custom duties criterion are 0.775 and 0.843, respectively. Comparing these two latter values with the estimated value for Iran which is 0.566, it shows that there is a significant gap between them. Finally, the estimated lower and upper limits for the IIT criterion in selected WTO member's countries are 0.026 and 0.057, respectively. So, the lower the IIT criterion estimated values, the better the process of WTO accession.