Abstract
In this manuscript, attempts were made to assess the impacts on Nigeria of full and instant tariff elimination from agricultural imports. A schedule of annual percentage reductions till full elimination as against an instant total or arbitrary elimination across all imports from the EU, as well asthe expected annual provisions via aids for envisaged trade to install infrastructural capacity aimed at forestalling fiscal imbalance, leading to stabilization for Nigeria, advocated. The study evaluates the likely share of Nigeria’s imports from the European Union (EU), Economic Community of West African States(ECOWAS), and the rest of the world (ROW) in major agricultural product sections trade. The World Integrated Trade Solutions (WITs) platform was used to illicit a likely Economic Partnership Agreements (EPAs) scenario import data through a tariff eliminated query set up. The major impacts estimated include the resultant consumption impact, revenue impact, welfare impact, trade creation and diversion impacts, welfare impact of trade creation with consumption impact, and Welfare impacts of trade diversion with consumption impacts, in addition to their implications for scheduled tariff eliminations. Summary results were presented at product section levels as percentage of the impacts to contribution of agricultural sector in Nigeria’s GDP. Based on the estimated impacts and terms of trade deal, it is recommended that Nigeria should follow a schedule of percentage tariff reduction across product sections relative to the current most favored nations’ rather than arbitrary measures as a major policy of liberalizing trade. An annual percent tariff reduction rates over the 25 years, of 0.38%; 1.35%; 0.62%; 0.72%; and 0.2, for product sections 01-05, respectively, is recommended. In addition, it is also recommended that corresponding tariff losses in revenue due to scheduled reductions in tariff should be provided annually via aid for trade, for improvement in infrastructure, production and exportation that will sustain and improve intra, inter and extra regional trade in a growth and globalization pursuit aided by the EU. Keywords: International Agricultural Product Imports; Aid for Trade; EPAs; Impacts; Percentage Tariff Reduction Schedule.JEL Classification: F; F1; F6
Highlights
The Economic Partnership Agreements between the European Union (EU) and African, Caribbean and Pacific countries and regions aim at promoting ACP-EU trade – and contribute, throughtrade and investment, to sustainable development and poverty reduction
A possible means of stemming the tides and launching Nigeria into growth and globalization irrespective of trade liberalization would be to compensate for losses due to trade creation, diversion and revenue whose impacts weigh the nations down when uncompensated for in aids for trade
Trade displacement threat by superior technology of EU is feared andwhether recommended aid for trade will off-set tariff revenue loss, trade displacement and trade diversion over the 25 years period of scheduled reduction in tariff can be proven otherwise with test of time, only if it leads to improved production and exportation of agricultural products
Summary
The Economic Partnership Agreements between the EU and African, Caribbean and Pacific countries and regions aim at promoting ACP-EU trade – and contribute, throughtrade and investment, to sustainable development and poverty reduction. (2) “tailor-made” to suit specific regional circumstances; (3) WTO-compatible agreements, but go beyond conventional free-trade agreements, focusing on ACP development, taking account of their socio-economic circumstances andincluding co-operation and assistance to help ACP countries benefit from the agreements; (4) open up EU markets fully and immediately, but allow ACP countries long transition periods to open up partially to EU imports while providing protection for sensitive sectors; (5) provide scope for wide-ranging trade co-operation on areas such as sanitary norms and other standards; (6) create joint institutions that monitor the implementation of the agreements and address trade issues in a cooperative way; (7) last but certainly not least, are designed to be drivers of change that will help kick- start reform and contribute to good economic governance This will help ACP partners attract investment and boost their economic growth
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