Trade Agreements

If, after having studied the plan and schedule included in an interim agreement in consultation with the parties to that agreement and taking notice of the information made available by the provisions of subparagraph 5(a)...
Nigeria International Law
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Bilateral by definition simply means -"involving two parties"-, therefore a bilateral trade agreement as the name suggests is a trade agreement between two parties or countries. The agreement is expected to create an environment that promotes commerce and trade between the countries involved by encouraging fairness where rules in business operations are mutually ascertained and observed.

When countries enter into a bilateral trade agreement, their goal is usually to give each other favoured trading status. They open access to each other's markets and this in turn is expected to increase trade and economic growth between them and as their business grows, new job opportunities are created. Bilateral agreements are easier to agree on, however, these are solely between two countries. They do not have as huge a bearing on economic processes as will a many-sided agreement.


A regional trade agreement (RTA) is a written agreement or a treaty signed by two or more countries to encourage the free movement of goods and services across the borders of its members. RTAs are very dynamic. Negotiations go beyond just tariffs to include relaxing multiple policies, behind-the-border laws such as competition policies, government procurement rules, etc.

There are three types of Regional Trade Agreements these are:

  1. Preferential Trading Agreement (PTAs);

PTAs are usually non-reciprocal but primarily reduce trade barriers among their members and are usually limited to a portion of actual trade flows. PTAs are originally a political expression of desired economic relations that may stimulate or facilitate the subsequent free-trade relationship among members. It is important to state that PTAs are advantageous to developing nations in terms of gaining larger market access and consumers.

  1. Free Trade Agreement (FTAs);

Unlike PTAs, Free Trade Agreements are reciprocal and are geared toward abolishing trade barriers between participating nations. Albeit, each member of the FTA independently determines their external trade barriers against non-members of the FTA.

  1. Custom Union;

In a customs union, all participating countries adopt a common external trade policy i.e a common external tariff regime.

RTAs could be termed as "Shallow" agreements if they only cover tariffs and alternative border measures or they could be referred to as "Deep" when they cover a larger set of policy areas "at the border" and "behind-the borders".

Recently, Regional Trade Agreements (RTAs) are at the centre of the numerous policy debates and quite a number of these discussions are regarding reversing or renegotiating current arrangements. In some instances usually involving developing countries, new trade agreements are terminated or are being negotiated, an example is the African Continental Free Trade Agreement (AfCFTA) in the African continent and so on.


These are commerce and trade treaties among three or additional nations. This type of agreement scales back tariffs and creates a simplified platform for businesses to import. Since it is usually among several countries, they are tougher to agree on. That very same broad scope makes them additionally, and exceptionally stronger than alternative kinds of trade agreements once all parties sign.


  1. Which bilateral, regional, and multilateral trade agreements have effect in your jurisdiction?
  2. The above-mentioned types of trade agreements are all operational and effective in African nations, especially in Nigeria.

    Nigeria has been a member of the WTO since 1 January 1995, and a member of the General Agreement on Tariffs and Trade (GATT) since 18 November 1960. Nigeria ratified the WTO Trade Facilitation Agreement on 20 January 2017 and the amended WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 1994 (TRIPS) Agreement on 16 January 2017.


    Nigeria has bilateral investment agreements with about 31 countries including but not limited to; Morocco, Singapore, Russia, Kuwait, South Africa, Germany, France, etc. However, only 15 of these BTAs are in force. In the year 2000, Nigeria and the U.S.A. signed a Trade and Investment Framework Agreement (TIFA). This agreement provides for dialogue on improving and strengthening trade and investment opportunities between the 2 countries.


    Nigeria is a founding member of the African Union and the ECOWAS. The Abuja Treaty provides for the establishment of the African Economic Community (AEC) by 2028, using existing regional economic communities as pillars.

    Under the regional free trade agreement agenda, a regional instrument known as ECOWAS Trade Liberalisation Scheme (ETLS) was established in 1990 to achieve an effective free trade area within the ECOWAS. All members of the ECOWAS, including Nigeria, have been implementing this scheme since 1990. Other ECOWAS-related schemes include the ECOWAS Protocol of Free Movement, which establishes the right of entry, residence, and establishment of ECOWAS citizens in the region.

    Nigeria is a member of the AfCTA. This agreement is to establish a single market for goods and services across 54 counties, allow the free movement of business, travelers, and investments, and create a continental customs union to streamline trade and attract long-term investment. Full implementation of the agreement will take some time as negotiations covering trade, dispute settlement, investment, competition policy, and intellectual property rights are yet to be completed.

    Multilateral agreements

    Nigeria is a party to the African Growth and Opportunity Act (AGOA), which is a US trade act that grants products from 40 sub-Saharan African countries (including Nigeria) duty-free access to the US market.

    Nigeria also signed a Joint Declaration on Cooperation with the European Free Trade Area (EFTA) on 12 December 2017 in Buenos Aires, on the margins of the 11th WTO Ministerial Conference. This Declaration sets the framework for Nigerian trade agreements with EFTA states.

    Nigeria is additionally a member of the African Continental trade space (AfCFTA). This agreement is to determine one marketplace for merchandise and services across fifty-four counties, enable the free movement of business travelers and investments, and build a continental union to contour trade and attract long-run investment. Full implementation of the agreement can take a while as negotiations covering trade, dispute settlement, investment, competition policy, and belongings rights can need to be completed.

  1. Which authorities are responsible for the negotiation of trade agreements? What does this process typically involve and how long does it take?
  2. The National Workplace for Trade Negotiations (NOTN) is the body tasked with conducting and coordinating negotiations of Nigeria's trade agreements. The NOTN was established in May 2017 by the Federal Executive Council for the following functions:

    1. To maximise and harness the country's trade and economic potential.
    2. To correct and re-balance longstanding economic anomalies in Nigeria's trading relationships.

    As outlined above, the core mandate of the NOTN is to oversee Nigeria's trade negotiations and, in conjunction with the Nigerian Investment Promotion Commission, to streamline Nigeria's trade and investment negotiating policy framework. Trade proposals in Nigeria's negotiations (bilateral, regional, continental, and multilateral) must show the priorities and actual operation activities of the Nigerian Industrial Policy and Competitiveness Advisory Council.

    The NOTN is constituted of members from the Federal Executive Council, Ministry of Foreign Affairs, Federal Ministry of Industry, Trade and Investment (FMITI), Federal Ministry of Finance, Federal Ministry of Justice, Federal Ministry of Budget and National Planning, Nigerian Customs Service, Nigerian Immigration Service, Nigerian Investment Promotion Commission, and National Bureau of Statistics.

    The AfCFTA is an example of trade negotiations handled by the NOTN. The negotiations began during the African Union Johannesburg Summit in 2015. The initial stage of negotiations, which covered trade in goods and services, was concluded in March 2018 with the execution of the treaty in 2019. Although this is not the fixed mode of operation for all trade negotiations conducted by Nigeria, this provides a guide as to the possible time frame for entering into trade agreements with Nigeria

  1. Do interim provisions apply while new trade agreements are under negotiation?
  2. The General Agreement on Tariffs and Trade (GATT) is an international legal agreement focused on limiting barriers to international trade by eliminating or reducing quotastariffs, and subsidies while preserving significant regulations. It was signed on October 30, 1947, by 23 countries and went into effect on January 1, 1948. GATT was instrumental to the creation of the World Trade Organization (WTO) on January 1, 1995, which absorbed and extended it.

    125 nations are signatories to its agreements, making the Agreement arguably, the most predominant in global trade today.

    In answering this question we shall examine the provisions of Article XXIV paragraphs 5 & 7 of GATT 1994:

    Paragraph 5

    1. Accordingly, the Agreement shall not stop contracting parties from forming customs unions, free trade areas or adoption of interim agreements needed for the formation of a customs union so long as the interim agreement leading to the formation of such customs union does not impose duties or regulations that are higher and more restrictive than those which apply in the constituent territories before the adoption of such interim agreement and subsequent formation of the customs union as the case may be or;
    2. the duties and other regulations of commerce maintained in each of the constituent territories that are not to be included in the free trade area shall not be higher or more restrictive than the corresponding duties and other regulations of commerce existing in the same constituent territories before the formation of the free-trade area, or interim agreement as the case may be;
    3. and any interim agreement for the creation of a customs union or of a free-trade area shall include a plan and schedule for the same, within a reasonable length of time.

    Paragraph 7:

    1. Any contracting party deciding to enter into a customs union or free-trade area, or an interim agreement leading to the formation of a union or area, shall promptly notify the Contracting Parties and make available any information regarding the proposed union or area that will enable them to make appropriate reports and recommendations to contracting parties.
    2. If, after having studied the plan and schedule included in an interim agreement in consultation with the parties to that agreement and taking notice of the information made available by the provisions of subparagraph 5(a), where the Contracting Parties find that such agreement is not likely to result in the formation of a customs union or of a free-trade area within the period contemplated by the parties to the agreement or that such period is not a reasonable one, the Contracting Parties shall make recommendations to the parties to the agreement. The parties shall not maintain or put into force, as the case may be, such agreement if they are not prepared to modify it following these recommendations.
    3. Any substantial change in the plan or schedule referred to in paragraph 5(c) shall be communicated to the Contracting Parties, which may request the contracting parties concerned to consult with them if the change seems likely to jeopardize or delay unduly the formation of the customs union or the free-trade area.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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