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Abstract

Smart simulation Computable Partial Equilibrium (CPE) Methodology was employed in this study to determine the Effects of Economic Partnership Agreements (EPAs) on Agricultural trade between Nigeria and the European Union (EU). Specifically, the study investigated the patterns of imports of Nigeria; the potential import effects on the country embarking on free trade under the economic partnership agreements scenario; the potential revenue effects on the country under the same platform; the potential welfare effects on the country under the same platform; and the sensitive products for the country based on source and volume of import criteria. World integrated trade solutions (WITS) provided access to international trade and protection related data and offered built-in-analytical tools for the study. Results of the analysis on patterns of import of the country showed that Nigeria imported much of her agricultural products from the Rest of the World (ROW), and least from ECOWAS region. Product group 10(cereals) constituted 38.50% of the total imports. Result on Potential Import Effect of EPAs, showed that Nigeria will gain $35330.1 million in “Trade Creation” and looses $14947.484 million in terms of “Trade Diversion”, with Total Import Effect amounting to $50277.6 million. Result on the Potential Tariff Revenue Effect showed total likely tariff revenue loss of -$16666.7 million for the country. Result on Potential welfare effect showed likely welfare gains of $2238.8 million for the consumers in all the agricultural products studied. Result on sensitive products based on source and volume criteria, showed that product groups 3, 4 and 15 were identified to house potential sensitive products for the country and should be exempted from EPAs. It is also recommended that .fiscal measures such as Value-Added Tax (VAT) should be imposed on imported duty-free food products from the EU to reduce revenue loss from Nigeria.

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