| Peer-Reviewed

Analysing the Welfare Impacts of an RTA Between China and Nigeria

Received: 1 January 2021     Accepted: 13 January 2021     Published: 28 January 2021
Views:       Downloads:
Abstract

Regional trade agreement is a tool for economic integration between two or more nations. It takes several forms and there exists different types of agreements depending of its purpose. Just like any trade blocks it has advantages and shortfalls especially if the trading partners are not natural partners. Regional Trade Agreements (otherwise known as RTA) yield welfare benefits in form of consumer surplus, trade creation, revenue and income to the trading partners This paper analyses the welfare impacts of a possible RTA between Nigeria and China. There is huge trade flow between the two countries The major commodities traded and covered in this paper include fuels, machineries and transport. equipment and chemicals. Using data sourced mainly from the World Integrated Trade Solutions (Comtrade, WTO/IDB, WTO/CTS) the paper uses descriptive statistics in measuring the welfare impacts of the agreement The paper reveals that Nigeria possess a Revealed Comparative Advantage (RCA) of export of fuels to China while China possess an RCA of textile, clothing and foot wears export. Its further reveals that if the two economies could focus on trade in the goods with highest RCA, trade will be created and welfare achieved. More so, the RTA leads to deep economic integration. The paper recommends Nigeria and China should hasten the signing of RTA agreement for mutual benefits.

Published in Journal of World Economic Research (Volume 10, Issue 1)
DOI 10.11648/j.jwer.20211001.12
Page(s) 10-17
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

Revealed Comparative Advantage (RCA), RTA, Welfare and Consumer Surplus, Trade Creation, Trade Diversion

References
[1] Baldwin, R., and Wyplosz, C., (2006), The Economics of European Integration, McGraw-Hill Education.
[2] Dasgupta, R., and Panagariya, A., (2002), "Free Trade Areas and Rules of Origin: Economics and Politics", Working Paper.
[3] Cecchini, P., Catinat, M., and Jacquemin, A., (1988), The European Challenge 1992: The Benefits of the Single Market, Gower.
[4] Evans, D., Gasiorek, M., Ghoneim, A., Haynes-Prempeh, M., Holmes, P., Iacovone, L., Jackson, K., Iwanow, T., Robinson, S., and Rollo, J., (2006), Assessing Regional Trade Agreements with Developing Countries: Shallow And Deep Integration, Trade, Productivity, and Economic Performance, Study for DFID, CARIS, University of Sussex, published online at: http://www.sussex.ac.uk/Units/caris/CARIS/DFIF-RTA-REPORT.pdf.
[5] Gasiorek, M., Smith, A., and Venables, A., (2002), "The Accession of the UK to the EC: A Welfare Analysis Journal of Common Market Studies.", Vol. 40, No. 3, September 2002, pp. 425-447 (23).
[6] Grossman, G., and Helpman, E., (1995), "The Politics of Free-Trade Agreements.", The American Economic Review, Vol. 85, No. 4, September 1995, pp. 667-690.
[7] Grubel, H., and Lloyd, P., (1975), Intra Industry trade: The Theory and Measurement of International Trade in Differentiated Products, Wiley, New York.
[8] Humphrey, J., Schmitz, H., (2002), "How does insertion in global value chains affect upgrading in industrial clusters?", Regional Studies, Vol. 36, No. 9, December 2002, pp. 1017-1027 (11).
[9] Cox, D., and Harris, R., (1992), "North American Free Trade and Its Implications for Canada: Results from a CGE Model of North American Trade.", The World Economy, Vol. 15, No. 1, pp. 31-44.
[10] Krugman, P., and Venables, A., (1995), "Globalization and the Inequality of Nations.", The Quarterly Journal of Economics, MIT Press, Vol. 110, No. 4, November 1995, pp. 857-80.
[11] La Nasa III, J., (1996), "Rules of Origin and the Uruguay Round’s Effectiveness in Harmonizing and Regulating them.", The American Journal of International Law, Vol. 90, No. 4, October 1996, pp. 625-640.
[12] Smith, A., and Venables, A., (1988), "Completing the Internal Market in the European Community: Some Industry Simulations", European Economic Review, No. 32, pp. 1501-1525.
[13] United Nations Statistics Division Commodity Trade Statistics Database (UNSD COMTRADE), published online at: http://comtrade.un.org.
[14] United Nations Conference on Trade and Development (UNCTAD), and World Bank (WB), World Integrated Trade Solution (WITS), published online at: http://wits.worldbank.org/package/WITS-Install-XP.htm.
[15] Winters, L., (1985), "Separability and the Modelling of International Economic Integration: U.K. Exports to Five Industrial Countries", European Economic Review, Vol. 27, No. 3, pp. 335-353.
Cite This Article
  • APA Style

    Musa Talba Jibrin. (2021). Analysing the Welfare Impacts of an RTA Between China and Nigeria. Journal of World Economic Research, 10(1), 10-17. https://doi.org/10.11648/j.jwer.20211001.12

    Copy | Download

    ACS Style

    Musa Talba Jibrin. Analysing the Welfare Impacts of an RTA Between China and Nigeria. J. World Econ. Res. 2021, 10(1), 10-17. doi: 10.11648/j.jwer.20211001.12

    Copy | Download

    AMA Style

    Musa Talba Jibrin. Analysing the Welfare Impacts of an RTA Between China and Nigeria. J World Econ Res. 2021;10(1):10-17. doi: 10.11648/j.jwer.20211001.12

    Copy | Download

  • @article{10.11648/j.jwer.20211001.12,
      author = {Musa Talba Jibrin},
      title = {Analysing the Welfare Impacts of an RTA Between China and Nigeria},
      journal = {Journal of World Economic Research},
      volume = {10},
      number = {1},
      pages = {10-17},
      doi = {10.11648/j.jwer.20211001.12},
      url = {https://doi.org/10.11648/j.jwer.20211001.12},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20211001.12},
      abstract = {Regional trade agreement is a tool for economic integration between two or more nations. It takes several forms and there exists different types of agreements depending of its purpose. Just like any trade blocks it has advantages and shortfalls especially if the trading partners are not natural partners. Regional Trade Agreements (otherwise known as RTA) yield welfare benefits in form of consumer surplus, trade creation, revenue and income to the trading partners This paper analyses the welfare impacts of a possible RTA between Nigeria and China. There is huge trade flow between the two countries The major commodities traded and covered in this paper include fuels, machineries and transport. equipment and chemicals. Using data sourced mainly from the World Integrated Trade Solutions (Comtrade, WTO/IDB, WTO/CTS) the paper uses descriptive statistics in measuring the welfare impacts of the agreement The paper reveals that Nigeria possess a Revealed Comparative Advantage (RCA) of export of fuels to China while China possess an RCA of textile, clothing and foot wears export. Its further reveals that if the two economies could focus on trade in the goods with highest RCA, trade will be created and welfare achieved. More so, the RTA leads to deep economic integration. The paper recommends Nigeria and China should hasten the signing of RTA agreement for mutual benefits.},
     year = {2021}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - Analysing the Welfare Impacts of an RTA Between China and Nigeria
    AU  - Musa Talba Jibrin
    Y1  - 2021/01/28
    PY  - 2021
    N1  - https://doi.org/10.11648/j.jwer.20211001.12
    DO  - 10.11648/j.jwer.20211001.12
    T2  - Journal of World Economic Research
    JF  - Journal of World Economic Research
    JO  - Journal of World Economic Research
    SP  - 10
    EP  - 17
    PB  - Science Publishing Group
    SN  - 2328-7748
    UR  - https://doi.org/10.11648/j.jwer.20211001.12
    AB  - Regional trade agreement is a tool for economic integration between two or more nations. It takes several forms and there exists different types of agreements depending of its purpose. Just like any trade blocks it has advantages and shortfalls especially if the trading partners are not natural partners. Regional Trade Agreements (otherwise known as RTA) yield welfare benefits in form of consumer surplus, trade creation, revenue and income to the trading partners This paper analyses the welfare impacts of a possible RTA between Nigeria and China. There is huge trade flow between the two countries The major commodities traded and covered in this paper include fuels, machineries and transport. equipment and chemicals. Using data sourced mainly from the World Integrated Trade Solutions (Comtrade, WTO/IDB, WTO/CTS) the paper uses descriptive statistics in measuring the welfare impacts of the agreement The paper reveals that Nigeria possess a Revealed Comparative Advantage (RCA) of export of fuels to China while China possess an RCA of textile, clothing and foot wears export. Its further reveals that if the two economies could focus on trade in the goods with highest RCA, trade will be created and welfare achieved. More so, the RTA leads to deep economic integration. The paper recommends Nigeria and China should hasten the signing of RTA agreement for mutual benefits.
    VL  - 10
    IS  - 1
    ER  - 

    Copy | Download

Author Information
  • Department of Economics, University of Maiduguri, Maiduguri, Nigeria

  • Sections