The many phases of Nigeria’s relationship with the WTO

Several Nigerian newspapers recently reported the election of Dr Okechukwu Enelamah, the Minister of Industry, Trade and Investment, as vice chairman for the World Trade Organisation’s forthcoming 11th Ministerial Conference (MC11) in Buenos Aires, Argentina, from 10 to 13 December. Of course, it’s a great honour, and congratulations are in order! Yet, as I reflected on the minister’s appointment and, more broadly, on Nigeria’s current elevated status at the WTO (a Nigerian is a Deputy Director-General of the organisation), I couldn’t help thinking about how far this country has come in its relationship with the WTO. The truth is that, for much of Nigeria’s membership of the WTO since 1994, its relationship with the organisation was, at best, gingerly; at worst, cynical and nominal!

Scholars argue that a country’s affinity with rules-based international organisations is induced less by concerns about sanctions or reputational loss but more by normative commitment and a sense of obligation. This is what the renowned American academic Professor Robert Keohane calls the “value of the regime” argument. In other words, if a country values an international organisation, it would behave appropriately to support it and comply with its rules.

But this constructivist argument ignores the self-interest that also drives state behaviour in international relations. For instance, part of the reason for Nigeria’s historically reticent and defensive attitude towards the WTO is the structure of its economy and external trade. As a country with insignificant non-oil export, whose priority is to protect its domestic industries from foreign competition rather than seek market access abroad, Nigeria is unlikely to be too enamoured of a world body that promotes trade liberalisation.

History, indeed, supports this view. Nigeria became a contracting party to the General Agreement on Tariffs and Trade (GATT), the WTO’s precursor, at independence in 1960 through sponsorship by Britain under a provision in the agreement, concluded in 1948, designed to facilitate the accession of former colonies to the GATT. As a contracting party to the GATT, Nigeria also didn’t negotiate its accession to the WTO. Yet, despite the relatively light conditions of its entry and membership, Nigeria was largely inactive in the GATT and loathed the outcomes of the Uruguay Round negotiations that gave birth to the WTO.

During the Uruguay Round negotiations, Nigeria’s trade minister warned against “the danger of running too fast in unfamiliar terrains”, and complained that Nigeria was being asked “to make contributions inconsistent with our level of development”. Of course, as Nigeria’s Uruguay Round negotiations were conducted under military rule, little attempt was made to secure the buy-in of Nigerians. Indeed, many believed that the Abacha regime signed the WTO agreement in 1994 to buy international support. As a former chairman of the House Committee on Industries put it, “When the government found itself in the throes of international economic sanctions, it used the WTO to win political support”.

Subsequently, prominent politicians and lawmakers were calling for Nigeria’s withdrawal from the organisation. For instance, some years ago, Audu Ogbeh, a former chairman of the then governing party, PDP, and current minister of agriculture, convened meetings calling for the reconsideration of Nigeria’s membership of the WTO. What’s more, successive Nigerian governments did nothing to meet the country’s WTO commitments. For instance, while South Africa introduced a raft of domestic laws, between 1996 and 1998, to implement its WTO obligations, Nigeria has, to date, enacted virtually no legislation that can be linked specifically to its WTO obligations, whether in the area of intellectually property rights, trade-related investment rules or trade remedies. Despite technical support from the WTO, the World Intellectual Property Organisation (WIPO) and the World Customs Organisation (WCO), Nigeria has shown no political and legislative will to pass WTO-compatible laws. Even worse, Nigeria has continued its pre-WTO practice of imposing import restrictions and bans to protect local industries, despite the WTO-incompatibility of such measures and calls by different WTO committees to remove them.

The WTO reviews Nigeria’s trade policy regime every seven years, but each review tended to show no improvement since the previous one. For instance, Nigeria’s first review in 1998 identified several WTO-inconsistent measures. But after the second review in 2005, the WTO noted that “since its last Trade Policy Review (TPR) in 1998, Nigeria’s trade regime has become more protective”, with “a 10-fold increase in products covered by import bans”. Nigeria’s third review in 2011 turned out to be equally damning. It would certainly be interesting to see what the fourth TPR conducted earlier this year reveals. How, for instance, would the WTO reviewers match the Buhari government’s rhetoric on improving the ease of doing business with its protectionist tendencies? The infamous list of 41 products deemed ineligible for foreign exchange and the lack of market conditions in some areas of the economy certainly can’t be viewed as WTO compatible.

Nigeria’s shallow implementation of its WTO obligations would thus indicate its lack of normative commitment to the WTO. To be sure, this is due to domestic circumstances, including weak administrative and institutional capacity, but also, truth be told, lack of political will and a strong commitment to the rule of law and legality, since a rule of law country would generally respect its international commitments.

Yet, nothing demonstrated Nigeria’s lack of normative commitment to the WTO more than its failure to pay its subscriptions to the organisation for five years, from 2000 to 2005. It took an embarrassing situation to force Nigeria to pay up. In 2005, the Nigerian trade minister was appointed as vice chairman of the Hong Kong Ministerial Conference, but Nigeria was told that the appointment could be withdrawn unless it paid up its dues. After all, as the famous legal scholars Abram and Antonia Chayes wrote in their book, The New Sovereignty, a country that compromises its reputation as a reliable partner “jeopardises its ability to continue to reap organisational benefits”. When Nigeria faced the embarrassment of being denied a key organisational benefit, it found the money to pay up the outstanding dues.

Sadly, in the early and mid-2000s, Nigeria’s unreliability as a WTO member easily attracted social opprobrium. As one WTO official told me, “No one likes Nigeria here”. Yet this was at a time when a Nigerian, Dr Chiedu Osakwe, Nigeria’s current Chief Trade Negotiator, was doing a sterling job as the WTO’s Director of the Doha Development Agenda, and was the driving force behind the DDA.

But how things have changed! Although Nigeria’s trade policy is still not compatible with its WTO obligations, institutionally, the country’s attitude to the WTO has changed positively. For instance, Nigeria was credited with the success of the WTO’s 8th Ministerial Conference (MC8) in Geneva, in 2011, with the then trade minister, Segun Aganga, as chairman of the conference, and the then Nigerian trade ambassador, Fredrick Agah, as chairman of the General Council. The achievement of Agah in salvaging the conference, widely predicted to fail, contributed to his subsequent appointment by Roberto Azevedo, current Director-General of WTO, as Deputy Director-General in 2013. What this shows, of course, as the new sovereignty theory makes clear, is that reliability as a partner yields organisational benefits.

Surely, Nigeria’s recent ratification of the WTO’s Trade Facilitation Agreement has not gone unnoticed. It was particularly interesting that the trade minister, Dr Enelamah, gave as a reason for the ratification Nigeria’s commitment to the multilateral rules-based trading system. You can call that a “value of the regime” rationale. And the minister’s recent appointment as vice chair of the WTO’s 11th Ministerial Conference in December, which would make Nigeria one of the top African holders of chair and vice chair of recent WTO ministerial conferences, is a fitting recognition of the country’s increasing normative commitment to the organisation.

So, Nigeria has come a long way in its institutional engagement with the WTO. But unless Nigeria brings its trade policy regime into conformity with WTO rules, the improved relationship would not increase the productivity and competitiveness of its economy, and its non-compliance would undermine the integrity of WTO law.

Olu Fasan