The China–US Trade Dispute: Economic Implications for the ECOWAS Region

Abstract

The Economic Community of West African States (ECOWAS) region, which is highly dependent on bilateral trade with the United States and China, will be affected by the trade dispute between the two countries. We analysed the implications of the trade dispute on ECOWAS bilateral trade with the two countries with an emphasis on trade in agricultural raw materials, mineral products, and consumer goods. Using historical data of fifteen ECOWAS countries, the study employed Instrumental Variables, Poisson Pseudo Maximum Likelihood (PPML), pooled Ordinary Least Square (OLS) and Least Square Dummy Variable (LSDV). Techniques to show that trade dispute could lead to a fall in exports of agricultural raw materials and mineral products to the United States, but an increase in exports to China. In the case of exports of consumer goods, the trade dispute could lead to a reduction in the ECOWAS’ exports to both the United States and China. The region’s economic diplomacy should promote the interests of its Member States while responding to the needs of the two countries.