ABSTRACT
This
work: Nigeria and the World Trade Organization: 1991-2010 examined how the
structure of the global economic system that is being managed by the World
Trade Organization can promote economic development and welfare everywhere
particularly in Nigeria. The throwing down of borders as exemplified by the
quick pace of liberalization, deregulation and privatization with the
consequent social and economic dislocation, undermined the capacity of Nigeria
to be in charge of her process of development. Finally solutions were
proffered; Nigeria should slow down the process of liberalization and
deregulation to deal with the distortions arising from capital flight;
privatization to be renegotiated. Finally Nigeria should enhance the exploit
and capacities which it has (both at home and in the diaspora).
TABLE
OF CONTENTS
Title
page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table
of contents vi
CHAPTER ONE
1.1 Introduction 1
1.2 Problem of the Study 2
1.3 Purpose of Study 3
1.4 Significance of Study 3
1.5 Scope of Study 4
1.6 Limitation of Work 4
1.7 Research Methodology 5
1.8 Literature Review 5
1.9 The Structure of the Work 11
Notes and References 12
CHAPTER TWO
GLOBALISATION AND THE PHILOSOPHY OF
WTO
2.1 Introduction 14
2.2 Globalization 14
2.3 The Philosophy of WTO 16
2.4 Nigeria 26
Notes and References 28
CHAPTER THREE
NIGERIA AND WTO
3.1 Introduction 29
3.2 Agriculture 29
3.3 Non-Agriculture Products 36
Notes and References 43
CHAPTER FOUR
TRADE RELATED ASPECTS OF INDUSTRIAL
AND
ENVIRONMENTAL PROTECTION
4.1 Trade Related Investment Measures (TRIMS) 45
4.2 Trade Related Industrial Property Rights
(TRIPS) 47
4.3 Principles and Objectives of TRIPS 52
Notes and References 66
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND
RECOMMENDATIONS
5.1
Summary of Findings 68
5.2 Conclusions 68
5.3 Recommendations 70
Bibliography 74
CHAPTER
ONE
1.1 INTRODUCTION
The World Trade Organization (WTO) is
as a result of the Uruguay round on multilateral trade negotiations contained
in the final act which includes the Marrakesh Agreement (1994). ²
The Agreement
establishing the WTO referred to in the final act as the “WTO Agreement”
Ministerial Declarations and decisions and the understanding on commitments in
financial services, as annexed thereto which make up the ground rules of the WTO,
otherwise known as the final act of the Uruguay Round protocol GATT 1994, the
general agreements on trade in services, the understanding and procedures
governing the settlement of disputes, the decisions on achieving greater
coherence in global economic policy making, agreement on agriculture, textiles
and clothing, technical barriers to trade, aspects of investment measures,
dumping, aspects of intellectual property rights, rules of origin, import
licensing procedures, subsidies and countervailing measures, safeguard measures
for protection of domestic industry; the confirmation of trade policy
mechanism.3
The final act thus
represents a bundle of highly technical and complex instruments which apply not
just to trade in merchandise goods, as was the case with GATT, but also to
disparate subject matters such as services, investments and trade related
aspects of intellectual property. Thus, the WTO is more than just a
continuation of the GATT, which it replaced but differs from it in many
respects. The WTO deepens and extends the scope of globalization on a rule
based, predictable and institutionally enforceable basis while GATT rules are
essentially selective, provisional and limited to merchandise good, with a
secretariat added since 1980 to boast as an institution. Besides the WTO and GATT
opened in different environments, the former came on stream after the IMF/World
Bank, two institutions with which it has been enjoined to work with, had,
through the Structural Adjustment
Programme(SAP) and its subsequent
variants, together with the conditionality of democratic reforms, that
exclude social democracy, as conditions for assisting and doing business with
the third world, imposed uniform macro-economic policies on them. It was
through these processes that some of the pillars of the WTO-liberalization,
deregulation, devaluation, generalized export promotion, mostly of primary
products from the third world, were fashioned.4
Because of their scope
and complexity, these instruments impose a lot of burden on developing
countries to provide adequate manpower both for the negotiation process (which
is on-going), their appreciation and implementation stages. It can be said that
Nigeria joined the WTO unprepared and without appreciating the full
implications of the obligations undertaken as well as the possibilities and challenges
for national development.
It is not our intention to examine
the whole of the WTO regime. Rather, we shall focus on some of the key areas of
the agreement that touch more directly on Nigeria’s national interest such as
liberalization of trade in agriculture, industry, services, investments,
trade-related aspects of the WTO, it will be necessary to situate the above
subject areas in the context of the philosophy of WTO as derived from its
history, aims and objectives, and examine the Nigeria experience since becoming
a member of the WTO. This work will also examine what policy options are open
to Nigeria both at national and international levels as well as how economic
diplomacy can promote the maximization of benefits of membership and minimize
its negative consequence.
1.2 Problem
of the Study
Nigeria
was an active member of the general agreement on tariffs and trade, GATT, as it
is of the WTO, which succeeded it. The WTO agreement came into force in 1995
and established a new global economic architecture. It was not just a successor
to GATT from which it differed in many respects. The WTO depended and extended
the scope of globalization on a rule-based, predictable and institutionally
enforced basis while GATT rules were essentially selective and limited to
merchandise goods. Nearly sixteen years after the WTO became operational, not
much has resulted from the expectations which included developing countries to
commit themselves to the agreements, decision and declarations that make up the
WTO regime.
It
is in the light of these critical issues that their consequences for national
development that necessitated this work. How can the WTO need to be renegotiated
if it would satisfy the condition of fairness, equity and balance and the
benefits there from by the developing countries to materialize? How can Nigeria
improve her performance in the WTO? Can Nigeria survive in WTO? The challenge
to our diplomacy must be to muster the capacity to pursue this very important
task of incorporatingour nation and other parts of the developing world into
the globalization process. In such an equity-creating task, we will have the
overwhelming- the universal- backing of all people of good will.
1.3 Purpose
of Study
The
purpose of this work – Nigeria and the world trade organization, 1995 to 2010
is to:
i.
Identify and examine the critical elements
that defines the nature and character of the WTO;
ii.
Indicate hoe Nigeria can relate to the
global economy that is now managed by the WTO in alliance with the
Bretton woods institutions of the international monetary fund (IMF) and the World
Bank;
iii.
Finally, identify the future impact of WTO
on Nigeria in the WTO.
1.4 Significance
of Study
The
capricious world economic trends ensure that trade remain one of the most
fascinating aspects of international relations. Over the generations
international trade epitomized the engagement with the world beyond the known
borders. It represented both necessity and luxury and was pursued in the name
of survival and progress. Trade also stimulated our human curiosity about
foreign lands and customs. This worked best if countries respected each other
as equal partners. Sometimes, however, the economic progress of one national
came at the expense of other national, fueling conquests, and ward. Faced with
a multiplicity of challenges posed by the realignment of power relations in the
global economy we must strive to address inequality and exploitation in
international trade.
The
study is an effort towards explaining how trade influences economic development
of societies. Since ultimately, the legitimacy of the WTO depends on the
responsibility of its members to ensure that such progress is sustainable and
that some nations are not advancing their economic development by taking
advantage of others.
1.5 Scope
of Study
This
study is essentially limited to the activities of Nigeria in the WTO, from 1995
when Nigeria joined the organization to date. The impact of the global economy
managed by the WTO in alliance with the IMF and World Bank on Nigeria.
1.6
Limitation
of Work
Research
of this type is always faced with problem of time, because it is meant to be
complete at a specific period. There is need to work within a reasonable scope.
This
study covers a period of about sixteen years, beginning from 1995 when the WTO
came into being and also when Nigeria formally joined the WTO up to 2010 when
the negative consequences of globalization have unfolded in the developing
countries like Nigeria.
1.7 Methodology
The
materials used for this work were obtained from both primary and secondary
sources. The former include oral interviews among others, while the latter
include both published and unpublished materials like periodicals, journals,
government documents, textbooks and so forth. It is necessary to point out that
great difficulty was encountered in the course of data collection and
conducting of interviews with some of the officials who may decline to give information
or handover some information and documents classified confidential. But in
spite of these limitations the research is optimistic of collecting enough data
to make the work meet its objectives.
As
regards the sampling plan, the research will concentrate on some of the key
areas of the agreement that touch more directly on Nigeria’s national interest
such as liberalization of trade in agriculture, industry services, investments,
trade related aspects of intellectual property and environment. The data will
be collected through personal interviews of some officials of the ministry of
commerce and NIIA among others. In the case of research instruments.6
A structured questionnaire was
designed to collect information from the government officials, staff of NIIA
among others. The above data collected were analyzed by editing, coding, data
recording and summarization of data.
1.8 Literature Review and Theoretical Framework
This work is grounded in
the institutionalist interdependence approach to international relations. The
idea of complex interdependence among nations goes back to the examination of
interstate cooperation and institution building during the post – world war
era, and it speaks primarily in opposition to realist theory, is based on the
premise
that the anarchical
structure of the international system compels states to either maintain or
enhance their power for the sake of self-preservation.7
And yet despite the realist
assumption that states are guided by their self-interested logic that questions
the utility of any collaborative initiative, states have continued to cooperate
internationally on a variety of issue.
The
liberal institutionalist theory stresses interdependence among nations, was first
formulated by Robert Keohaneand Joseph Nye. It makes a claim that stability and
order in the international regime.8
This
leads to a famous definitions: regimes can be defined as sets of implicit and
explicit norms, rules, and decision-making procedures around which actors’
expectations converge in a given area of
international relations.9
Keohane later goes beyond this
definition by urging us to pay attention to the nature of the regimes and the
state actors that shape according to their needs. States seek to create
international regimes because the network of international cooperation benefits
them in return. In fact, international cooperationhas persisted with, or
without the existence of a dominant hegemonic state capable of providing a
strong leadership leading to the establishment of common norms and
institutions. According to Keohane, the functional need for international
regimes leads to deepening international integration and allows state to
function without hegemonic state. The existence of international regimes can be
a powerful motivator of international cooperation in the absence of a single
large state able
and willing to enforce rules and
regulations within the system (hence the title of Keohane’s book, After
Hegemony).10
According to the above theory,
international organizations, such as the WTO, are based on norms that become their
standards of behavior as defined in terms of rights and obligations.11
In turn, these
general obligations and rights guide the behavior of states in the formulation
and implementation of rules. Legal rules vest these rights and obligations in
international law. This is why it is particularly important to study the WTO,
because it is the first global economic organization that is fully legalized by
its adherence to legal rules and its principle of judicial equality. The WTO is
also theoretically significant because it illustrates the limitations of the
regime theory in addressing the tension between states need for international
cooperation and their subsequent vulnerability to become dependent on other
states. This dependency is often directly related to institutional and legal
restraints imposed, asin the case of the WTO, on its member states. Such
constraints can be in conflict with the preferences expressed by some domestic
groups, but they do not mean that the state becomes completely powerless.
Still,
some observers worry that economic interdependence and the concomitant
globalization have at least reduced the autonomy of the state. The claim is
made that economic globalization supported by the WTO forces the state to
eliminate its protectionist policies, relax environmentalregulations, and
reduce social programs in order to be more globally competitive.
The subsequent global “race to the
bottom” would ensure that the state becomes less of a relevant actor
domestically and perhaps even internationally because of a strong dependence on
the performance of the global economy.12
Proponents of this view
of international economic relations emphasize the shift in thining about the
state’s role in the economy from an interventionist Keynesian perspective to
aneoliberal free-market approach based on the work by Fredrich von Hayek. John
Maynard Keynes developed a theory of macroeconomics that attached importance to
the government as being a source of stability in theeconomic affairs of the
country. After all, the hazards of unrestrained free-market, laissez-faire economic
liberalism was demonstrated well after the Great Depression in the 1930s. state
intervention and the society from the uncertainty of unregulated free markets.13
However, years of
deficit spending and high costs of state
subsidies accumulated into burdensome debts, which led some economists to call
into question the wisdom of Keynesain macroeconomics theory Milton Friedman,
and other academics whose names are associated with the Chicago school of
Economics, revived the ideas of Hayek when they contended that government
intervention in the market not only stifled individual liberty, but was
inefficient and hindered competition.14
Neoliberalism, as this
economic movement came to be known, became particularly salient during the late
1970s through the 1990s when governments annulled many barriers to trade and
capital movement and reduced some spending.
According to critics of the neoliberal trend in the global economy,
governments are getting smaller and the state, by extension, is becoming a less
meaningful actor on the international stage as a result – especially when it
comes to economic affairs.15
Such arguments, which
often predict the complete demiseof the state, are problematic and two counts.
First, they overemphasize the ideological strength of neoliberalism in
international economic affairs and thereby fail to appreciate the adaptability
of the state. Laissez-faire capitalism, after all, reached its apex not in the
later part of the twentieth century but ratherin its beginning studies have shown
capital flaws far greater before World War.16
Moreover, the scope of
the state back then was much narrower, as defense had accounted for the lion’s
share of government budgets. Related claims regarding the power of contemporary
multinationalcorporations also, appear somehow exaggerated when and reads of
the liberties afforded to imperial charter companies in nineteenth-century Asia
and Africa and the activities of the United Fruit Company in Central America
during the 1950s.17
Second, and perhaps more crucially,
empirical studies have revealed that there is a positive correlation between
the openness of the economy and the size of government. The famous finding by
economist DaniRodrik shows that states whose grass domestic product contains a
higher share of trade tend to have larger government expenditure.18
It is a relation that is
counterintuitive to the expectations of both advocates of free markets and
their critics. The warnings of critics that barriers to trade would require
states to disappear have proven to be unfounded, whereas the judgment of the
neoliberals that government size can negatively affect trade is also
groundless. At the same time, it should not be surprising, given the record of
countries that experienced lassies-fair capitalism in the face of the turmoil
of the international market that states should seek to shield themselves from
its potential risks. Indeed, political scientist John Gerald Ruggie has
emphasized how, in the aftermath of World War II, government intervention was
determined necessary to maintain domestic stability and smooth operations of a
multilateral global economy. He has called this phenomenon “embedded
liberalism”19
While one might
expect that the argument behind embedded
liberalism has been weakened by the collapse of the Breton Woods
monetary system in the 1970s, the subsequent challenge to US economic hegemony,
and by the neoliberal shift, Robert Keohane has argued that it contained
thereafter, and the empirical evidence
provided by Rodrik’s research shows that governments remain reluctant to
loosen their support system to shield their populations from adverse market
conditions.20
I rest my argument upon
the recognition that the state continues to be an important factor in the
international scene. Although joining an international organization such as the
WTO may somehow reduce its autonomy, this is done to advance international
economic cooperation that is expected to benefit the state. In fact, given the
transformation taking place in the global economy, the state has an important
role to play. The state is expected to deal with many conflictin pressures that
originates outside its borders.
In his book about globalization,
Jan AartScholte talks about global tensions characterized by the spread of Tran’s
planetary and supra-territorial connectivity. The state should not abdicate its
responsibility. It should try to resolve growing tensions brought about by
globalization, which after all is about contest between interests and competing
values.21
Craig N. Murphy
observes that globalization offers a possibility for establishing a
substantially more democratic global polity. However, to seriously contemplate
its current prospects we must pay attention to the central feature of the
global polity that can be identified along three dimensions: the policy realms
it affects, its institutions, and its social nature, that is the social forces
that it privileges or curtails. 22
In that sense, the WTO is
an interesting case study because it provides a forum where economically and
socially diverse countries can compete over the shape of its policies, its
institutional structure, and its social consequences. Furthermore, the WTO
claims to be a global organization with universal membership, which as Peter D.
Sutherland observes means that it is ideally placed to contribute to new
cooperative arrangements is at the international level aimed at promoting
global coherence in economic policy-making, not only in trade relations, but
also more generally in other aspects of economics policy. 23
Consequently, the WTO’s
ambition must be scrutinized not only from the institutionalist perspective as
a functional outcome of interstate negotiations. The WTO must also be
investigated from within, as a bureaucracy with its own internal dynamics. Here
the recent work by Michael Barnett and Martha Finnemore presents us with great
insights by recognizing that each international organization has its own
internal autonomy. The authors note that most theories of international
relations assumes that an international organization being created by states
would exist and act in the way states want them. In contrast, their premise is
to treat international organizations as autonomous actors that often produce
inefficient, self-defeating outcomes and turn their back on those whom they are
supposed to serve.24
This approach can help us
examine certain unexpected development in the life of the WTO that appears to
have a detrimental effect on the operation of the organization of the Book.
1.9 The Structure of the Work
Chapter one introduces the work and
set its scope, methodology, limitation and significance of study and review of
literature, chapter two analyzed the fundamental, theoretical issue of World
Trade Organization. Chapter three and four takes a critical look at areas of
major importance to Nigeria. Trade in agriculture, and non-agriculture goods,
industry, services, trade related aspects of industrial property and environmental
protection, etc. shall be our main area of concern. Chapter five concludes the
study with policy prescription and suggestions for a new course of Nigeria
membership of the WTO.
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