While it is true that the non-oil export sector is growing rapidly in Nigeria, ignorance of what WTO rules for Nigerian exporters entail remains a challenge among many exporters, particularly mini exporters.
Nigeria became a member of the World Trade Organization in 1995. The WTO is saddled with the function of overseeing trade agreements amongst over 166 member states, including Nigeria. Consequent upon this, we are bound by all WTO legal frameworks such as:
- The General Agreement on Tariffs and Trade (GATT)
• The Agreement on Sanitary and Phytosanitary Measures (SPS)
• The Agreement on Technical Barriers to Trade (TBT)
• The Trade Facilitation Agreement (TFA).
There are many others apart from the ones above, but for the purpose of this short article I have enumerated just four. Knowledge of these regulations can help you avoid rejection of your goods at foreign ports, sanctions, or even lawsuits in worse case scenarios.
We live in a global world, and indeed one that has now been qualified ubiquitously as a ‘global village.’ As a member of this global village, Nigeria must comply with international legal frameworks to which it is a party.
How important are WTO rules to you, a Nigerian exporter? You may be wondering how WTO rules affect an exporter in Nigeria? Or how these rules can affect an entrepreneur somewhere in Lagos, Port Harcourt, or Benin? Or somewhere else in Nigeria?
What Is the WTO and How Does It Affect Nigerian Exporters?
I often like calling the World Trade Organization (WTO) the global referee for trade. It manages international agreements that keep trade moving. It also settles "trade wars" and disputes between countries. It works to lower taxes (tariffs) so products are affordable and accessible.
To reduce conflicts in trade, legal frameworks created thereto have to be clear. In other words there must be certainty of meaning. This is one of the objective of the World Trade Organization—to provide a legal framework that is unambiguous and easy for parties to understand and follow. The WTO has rules on tariffs, subsidies and trade remedies. If you export products, whether sesame seeds, ginger, dried hibiscus flowers, solid minerals, and so on, just know that these rules affect you. Like you probably know by now – ignorance of the law is not an excuse. “I didn’t know” is not an excuse that will help you if you violate any of these rules. It is always better to be proactive in business. This is why many businesses engage the services of professionals such as accountants, lawyers, forwarding and clearing agents, sometimes on a retainer basis to ensure that there export process flows seamlessly.
Key WTO Agreements Every Nigerian Exporter Must Understand
1. The SPS Agreement
This Agreement governs food safety and plant/animal health standards. When you are exporting plants like hibiscus flowers or sesame seeds, the quality of your export must be in line with the sanitary standards of the importing country. In other words, if you are exporting crayfish, for instance, from Nigeria to the United States of America, the packaging of your crayfish must comply with the sanitary standards of the US.
2. The TBT Agreement
If you export cosmetics, for instance, your product must meet certain requirements. Thus, it must comply with the standard for product labelling. Again, it has to be properly packaged. It must meet safety standards. The same rule applies to someone who exports processed foods.
3. The Trade Facilitation Agreement (TFA)
The TFA helps to simplify customs procedures. It also contain provisions that protects the interests of exporters. For example, it provides for measures to reduce waiting time at the ports as well as reducing trade expenses. In Nigeria, it is still not fully implemented because of bureaucratic bottlenecks and assorted ‘wahala’ in our ports; nonetheless, awareness is increasing by the day.
4. GATT Tariff and Market Access Rules
Nigerian exporters enjoy MFN treatment and preferential trade terms under GATT and benefit from them when they export to WTO-member countries. However, they must take notice of tariff schedule requirements and quotas.
Common Mistakes Nigerian Exporters make under WTO Arrangements
The problem here is that some of these mistakes can be avoided. I hope our exporters will see the need to put in place better systems and structures in their businesses to mitigate these issues. Some of these mistakes include:
• Invalid or expired product certificates:
Once your product certificate has expired, you need to take steps to renew it. For a body like NAFDAC, there are steps that can be followed and they usually publish the requirements on their website. To renew certificate for human and veterinary drugs one has to follow the Guidelines for Renewal of Certificate of Registration For Drug Products (Human And Veterinary Drugs) as published on their website.
• Incorrect information on the NXP form or bill of lading
• Tiresome assumptions that local standards are taken for granted in the international market: This is the one that baffles as well as annoys me the most. In my interaction with clients, I take the time to explain why this assumption is not only false but also costly.
• Unfamiliarity with non-tariff measures like import bans or advanced product rules.
Imagine a hypothetical scenario involving a Calabar-based exporter who lost a $45,000 deal in dried hibiscus flowers due to his container being detained at Apapa port over an expired NAFDAC certificate and a minor NXP defect. The truth is that both mistakes are avoidable if you consult strategic partners to assist you through the various stages of your exporting.
Why Nigerian Exporters Should Seek Professional Advice
Most exporters focus on the sourcing, shipping, and foreign exchange aspects of their business, which is good but then fail to pay attention to the legal side of trade compliance. That's where a legal trade consultant or export lawyer is worth their weight in gold. Whether registering your company with NEPC, meeting ECOWAS regulations, or safeguarding your interests in a trade dispute, legal guidance will pay for itself in time and money.
As a Nigerian lawyer with expertise in international trade law, I guide Nigerian exporters to remain WTO complaint, avoid regulatory pitfalls, and gain access to foreign markets legally and profitably. Do not wait until there is an issue if you intend to export successfully from Nigeria. As they say, a stitch in time saves nine.
WTO Compliance Is Not Optional
Exporting today is not a matter of knowing only logistics. You have to know the rules of the game. WTO compliance is essential to Nigerian businesses willing to go global. Let your export business develop on solid legal ground.