TABLE OF CONTENT
Contents
CERTIFICATION…………………………………………………………………………………………………………………………….2
DEDICATION………………………………………………………………………………………………………………………………..3
ACKNOWLEDGEMENT…………………………………………………………………………………………………………………..4
TABLE OF CONTENT ……………………………………………………………………………………………………………………..5
ABSTRACT……………………………………………………………………………………………………………………………………7
INTROUDCTION……………………………………………………………………………………………………………………………8
1.1 BACKGROUND OF THE STUDY……………………………………………………………………………………………….8
1.2 STATEMENT OF THE PROBLEM……………………………………………………………………………………………10
1.3 OBJECTIVES OF THE STUDY …………………………………………………………………………………………………11
1.4 RESEARCH QUESTIONS……………………………………………………………………………………………………….11
1.5. SIGNIFICANCE OF STUDY……………………………………………………………………………………………………11
1.6. SCOPE AND LIMITATION OF THE STUDY………………………………………………………………………………12
1.7. SCOPE OF THE STUDY………………………………………………………………………………………………………..12
REFERENCES…………………………………………………………………………………………………………………………..13
CHAPTER TWO …………………………………………………………………………………………………………………………..14
2.0 LITERATURE REVIEW ……………………………………………………………………………………………………….14
2.1 THEORETICAL FRAMEWORK……………………………………………………………………………………………..17
LIBERAL THEORY …………………………………………………………………………………………………………………….17
COMPARATIVE COST THEORY…………………………………………………………………………………………………..23
2.3 PROBLEMS OF FOREIGN TRADE …………………………………………………………………………………………25
2.4 FOREIGN TRADE AND TRADE RESTRICTIONS …………………………………………………………………………25
2.5 WORLD TRADE ORGANISATION POLICY AND FOREIGN TRADE IN THE NIGERIAN CONTEXT……….27
REFRENCES…………………………………………………………………………………………………………………………….31
CHAPTER THREE…………………………………………………………………………………………………………………………32
3.1 PREAMBLE……………………………………………………………………………………………………………………….32
3.2 SOURCES OF DATA…………………………………………………………………………………………………………….32
3.3 METHOD OF DATA COLLECTION………………………………………………………………………………………….32
3.4 METHOD OF DATA ANALYSIS………………………………………………………………………………………………32
3.5. POPULATION OF STUDY …………………………………………………………………………………………………….33
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CHAPTER FOUR ………………………………………………………………………………………………………………………….34
4.1 BODY OF THE ESSAY …………………………………………………………………………………………………………34
4.2 Has Trade Liberalization in Nigeria Delivered the Promises Expected?………………………………………35
4.3 BENEFITS OF NIGERIA’S MEMBERSHIP IN THE WORLD TRADE ORGANISATION ……………………….40
4.3.2 STRUCTURE OF THE WORLD TRADE ORGANISATION…………………………………………………….48
4.4. `CRITICISM OF THE WORLD TRADE ORGANISATION………………………………………………………………50
REFRENCES…………………………………………………………………………………………………………………………….56
CHAPTER FIVE ……………………………………………………………………………………………………………………………60
5.1 SUMMARY …………………………………………………………………………………………………………………….60
5.2 CONCLUSION………………………………………………………………………………………………………………….61
5.3 RECOMMENDATION……………………………………………………………………………………………………..61
BIBLIOGRAPHY …………………………………………………………………………………………………………………………..64
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ABSTRACT
The study examined the relationship between Nigeria and WORLD TRADE organization from
1999 – 2012 The broad objectives of the study also involved examining the trend between youth
unemployment and economic growth. The major findings of this study is that the liberalization
of market by the world trade organization is having a negative impact on the Nigerian economy
because of lack of regulation by the government. The way Nigerian markets are open for
foreigners without any regulation is killing indigenous traders. What is happening in Nigeria is a
total liberalization where foreigners are allowed to enter the country with their goods without
being checked at the boarder due to the corruption in the country and the corruption being carried
out by custom officers.
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CHAPTER ONE
1.0 INTROUDCTION
1.1 BACKGROUND TO THE STUDY
The current period in the world economy is regarded as period of globalization and trade
liberalization. In this period, one of the crucial issues in development and international trade is to
know whether liberalization of trade indeed promotes growth. In this contemporary world as a
―global village‖, regional integration constitutes an effective means of not only improving the
level of participation of Nigeria in the sub-region in world trade, but also her integration into the
borderless and interlinked global economy. (Briggs,2007). Since 1960, the Nigerian economy
has experienced a massive liberalization of world trade, initially under the auspices of the
General Agreement on Tariffs and trade (GATT), established in 1947, and currently under the
auspices of the World Trade Organization (WTO) which replaced the GATT in 1993. Tariff
levels in both Nigeria and member states have reduced drastically, averaging approximately 4%
and 20% respectively (Oxley, 1999) The world trade organization is a global, multilateral
intergovernmental organization that promotes, monitors and adjudicate trade..The general
agreement on tariffs and trade was more of a negotiating framework than an administrative
institution (Kenen, 2000). It did not actually regulate trade.
Before the GATT, proposals for a stronger institutional agency had been rejected
because of United States fear that over regulation would stifle free trade. Although GATT was a
regime with international institutional infrastructure until the mid-1990s, in addition to its main
rule as negotiating forum, the GATT helped to arbitrate trade disputes. In 1995 the GATT
became the WTO, the GATT agreement on manufactured goods where subsumed into the world
trade organization framework and then extended to include trade in services and intellectual
9
property(.Massel, 1972) The WTO wields some power overstate, but as with most international
institution, this power is limited. It is the central international governing trade and therefore one
that almost all countries want to participate in and develop. As a negotiating forum for
multilateral trade, these multilateral negotiations are long and difficult. Among the five rounds of
GATT negotiations from 1947-1995, the Kennedy round in the 1960‘s so called because it
started during the Kennedy administration and paid special attention to the growing role of the
EEC, which the united states found somewhat threatening. The Tokyo round, in the 1970‘s had
to adjust rules to new conditions of world interdependence as, for instance, OPEC raised oil
prices and Japan began to dominate the automobile export. The Uruguay round in 1986 in
Uruguay made developing countries such as Nigeria to continue to participate in the WTO
because the benefits in terms of global wealth creation outweigh the cost, in terms of harm to
domestic industries or painful adjustments in national economies. States try to change the rule in
their favor during the rounds of negotiation and between rounds they try to evade the rules in
minor ways. But the overall benefits are too great to jeopardize b y non participation or by
allowing frequent trade wars to occur. Although the WTO provides an overall framework for
multilateral trade in a worldwide market, most international trade is governed by more specific
international political agreement, they are bilateral and free trade areas(oxley,1999). The world
trade organization as a regional organization performs two major function which are
-Bilateral agreements: bilateral treaties covering trade are reciprocal arrangements to lower
barriers to trade between two states. Usually they are fairly specific (Oxley, 1999). For instance,
Nigeria as a country may reduce its prohibition on imports on products while a country like
Japan lowers tariff on product which Nigeria exports. Part of the idea behind the WTO was to
strip away the maze of bi-lateral agreements on trade and simplify the system of tariffs and
10
preferences. Bilateral trade agreements have the advantages of reducing the collective goods
problem inherent in multilateral negotiations and facilitating reciprocity.
Free Trade Areas: Regional free trade areas are also important in the structure of the WTO. In
such areas, groups of neighboring states agree to remove the entire structure of trade barriers and
adopt a common tariff toward states that are of members of agreement. This type of arrangement
is known as custom union. If members of a custom union decide to coordinate other policies
such as monetary exchange, the custom becomes a common market. The creation of a regional
trade agreements of any type allows a group of states to cooperate in increasing their wealth
without waiting for the rest of the world (Oxley,1999). Infact from an economic nationalist
perspective, a free trade area can enhance a region power at the expense of other areas of the
world. The most important free trade area is in Europe it is connected with the European union
but with a somewhat larger membership.
1.2 STATEMENT OF THE PROBLEM
Promotion of economic growth, trade liberalization(open door) , removal of tariffs, is one of
the objectives of the world trade organization but in recent times, this has not been the case
because the Nigerian economy still experience some element of economic instability such as
high level of unemployment, price instability and adverse balances of payment to mention a few.
Furthermore, the world trade organization has not accrued into the economic growth totally
because some of the world trade organization problem arises from the need for reciprocity in
trade liberalization (Osita,1987:115). For this reason, it is worthy to analyze the influence of the
world trade organization on economic growth in Nigeria, and the overall benefit for
participation.
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1.3 OBJECTIVES OF THE STUDY
The broad objective of this is to examine the relationship between the WTO and Nigeria‘s
economic growth. To fulfill the broad objective of this study, the following specific objectives
are to be met;
To examine Nigeria membership of WTO since 1995,and the opportunities present.
To investigate
To analyze the challenges Nigeria membership of WTO poses to Nigeria‘s economic
growth &development.
1.4 RESEARCH QUESTIONS
The study shall be guided by the following research questions,
Has Trade Liberalizations in Poor Countries Delivered the Promises Expected
Has Nigeria benefitted from the world trade organization
What are the criticisms of the world trade organization?
1.5. SIGNIFICANCE OF THE STUDY
The role of a regional organization in the developmental journey of an economy cannot be over
emphasized, especially with the current trend of globalization. Nigeria. Being part of the global
village is not left out of this world development. This research work is carried out to study the
relationship between Nigeria and the WTO, how the organization has influenced the
performance of the Nigeria economy in the presence of other internal and external shocks. The
findings of this research work transcend beyond mere academic brainstorming, but will be of
immense benefit to federal agencies, policy makers, intellectual researcher and international
trade think tanks that occasionally prescribe and suggest policy options to the government on
12
trade related issues. It will also help the government to see the effectiveness of trade
liberalization policy on the economic growth of the nation over the years. This research work
will further serve as a guide and provide insight for future research on this topic and related field
for students who are willing to improve it. It will also educate the public on various government
policies as related to trade issues.
1.6. SCOPE AND LIMITATION OF THE STUDY
This research work span is through the period of 1999-2014 (15 years), and is within the
geographical zone of Nigeria. Thus, it is a country-specific research. This research exercise, like
every other research work, is really a rigorous one that consumes much time and energy
especially in the process of gathering information through reliable sources. This work is
relatively limited base on time and financial constraints, methodology adopted which could
further be verified by future research. Nevertheless, (the researcher) have properly organized the
research so as to present dependable recommendations which can aid effective policy making
and implementation at least for the time being.
1.7. SCOPE OF THE STUDY
This research work is divided into chapters. The focus of this chapter is to get an inkling of the
background of our research work. The research work is organized into five chapters, this
comprises of the background, statement of problem, objective of study, limitations and
expectations of study etc while our chapter two, attempted to review some literature relating to
the area of study. In chapter three, the research methodology is stated, while in chapter four I
would shed more light on the research and critically look into and try to explain more important
terminologies and policies of WTO and its relevant economically to Nigeria in chapter four. The
chapter five talks about the summary of my findings, the conclusion and recommendations .Each
chapter ends with a reference that shows where my information is gotten from.
13
REFERENCES
Adewuyi, (2002), ―Balance of Payments Constraints and Growth Rate Differences under
Alternative Police Regimes‖Nigerian Institute of Social and Economic Research (NISER)
Monograph Series No. 10 Ibadan, Nigeria.
Akerele, (2004), ―Nigeria‘s Export Trade: Instability and Forecast‖ J. Development Alternatives
and Area Studies, 20:61-68.
Asher, (1970), ‗Development Assistance‘, Brookings Institute, Washington D.C., P. 157.
Bairam, (1988), ―Balance of Payments, the Harrods Foreign Trade Multiplier and Economic
Growth‘. The European and North American Experience, 1970 to 1985 Applied Economics,
December.
Bankole, A.S and Bankole, M.A. (2004), ―Industrial Trade and Export Promotion Policies and
Revealed Comparative Advantage in Nigeria‘s Manufactured Export, In Garba, Abdul-Ganiyu et
al (eds), Leading Issues in Macroeconomic Management and Development, NES Ibadan.
Briggs, (2007), Nigeria: Mainstreaming Trade Policy into National Development Strategies:
African Trade Policy Centre No 52; Economic Commission for African.
Carbaugheg . (2009), ―International Economics‖, 12th Edition: South Western (engage learning),
Ohio.CBN, Annual Report and Account; various issues
Egwaikhide, (1991). ―Economic Growth through Export Expansion: Evidence from Nigeria‘.
NISERR Monograph Series No 10, NISER, Ibadan.
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