EU remains Nigeria’s top trade, investment partner with €10.7b surplus, says envoy
Amid escalating trade tensions, the Director-General (DG) of the World Trade Organisation (WTO), Dr Ngozi Okonjo-Iweala, has called for dialogue and calm to prevent a damaging trade war.
In another vein, the Head of the European Union (EU) Delegation to Nigeria and the Economic Community of West African States (ECOWAS), Gautier Mignot, has described the EU as Nigeria’s largest trading and investment partner.
Reacting to United States President Donald Trump’s recent threats to impose additional tariffs of as much as 100 per cent on America’s main trading partners, the DG said since taking up the mantle at the global trade body five years ago, trade had been facing challenging times with increasing protectionisms and protectionist measures from the U.S. and other member states.
Speaking on the sidelines at the recent World Economic Forum (WEF) meeting in Davos, Switzerland, she described the protectionist measures and threats of additional tariffs imposition as a source of great concern to them. Despite the challenges, she said, trade has remained largely resilient.
The DG said: “Total trade in goods and commercial services rose to $30.4 trillion in 2023 from the pre-pandemic peak of $24.9 trillion in 2019. Also, our latest numbers show that 80 per cent of world trade is still ongoing on WTO’s ‘Most-Favoured-Nation’ terms (which require countries to generally treat all trading partners equally). There is resilience, but there is cause to worry because we are seeing increasing fragmentation and protectionism.”
She said WTO did some calculations and decided that fragmenting into two geo-politically trading blocs would lead to trade policy uncertainty, adding: “We would end up with a 6.4 per cent loss in global real Gross Domestic Product (GDP) in the longer term.”
This is huge and would have a huge impact on everyone, further leading to a $6.7 trillion loss. It would be like losing the economies of Japan and Korea combined. We do not want to see this increased fragmentation because it is not good for anyone and would not favour anyone in the long run.”
Reacting to claims that Chinese manufacturers have an unfair edge as they, especially car manufacturers, are subsidised heavily by their government, the DG said the WTO provided the forum to discuss and explore problems like these. “When you have complaints against a member state, launch your studies and demonstrate how they are harming your economy, and we will provide remedies you can follow.”
The former Minister of Finance in Nigeria said she was not panicky over Trump’s administration in any way. “We have concerns, and as I have been saying to our members, ‘just chill, let us not get too over-excited’.”
She pleaded with members not to do tit-for-tat and apply counter-tariffs just because one country is doing it. Calling for a considered approach, she said there are methods to deal with such issues.
WTO, she asserted, is trying to encourage greater transparency among members and foster dialogue.
She said: “We do not want to encourage tit-for-tat. We have been there before in the 1930s and it worsened the Great Depression. We are going to see double-digit global GDP losses. Everyone will pay and poor countries will pay even more. We have seen this movie before, and this would not be a good re-run if we decide we want to watch this movie again.”
In his maiden press briefing in Abuja, Mignot disclosed that the EU was Nigeria’s top trading partner in 2023, with 28 per cent of its total trade.
The EU envoy further said the total trade in goods amounted to €35 billion in 2023, with an average yearly growth rate of 1.5 per cent for EU imports and 0.9 per cent for EU exports from 2019 to 2023.
Mignot said, “Nigeria benefits from a €10.7 billion trade surplus with the EU. When it comes to investment, a key priority of President Bola Tinubu’s Renewed Hope Agenda, Nigeria also has its strongest partner in the EU, as our Foreign Direct Investment (FDI) stock accounts for about one-third of Nigerian FDI, totalling €26.4 billion (2022).”
He added that the EU, its member states, the European Investment Bank, and soon, the European Bank for Reconstruction and Development, were Nigeria’s main development partners.
