Trade Competition and Complementarity Between USA and One of Its Major Trading Partners in Africa (Nigeria): An Empirical Analysis Using Prominent International Trade Measures

Abstract

This study investigated the trade complementarity and competitiveness between USA and Nigeria using data from World Integrated Trade Solutions (WITS) database. The study examined the volume and structure of trade between USA and Nigeria, and further adopted prominent international trade measures (Revealed Comparative Advantage index, Trade Integration Index, Complementarity Index and Export Similarity Index) and a modified gravity model. The results revealed that Nigeria is one of USA’s largest export destination in sub-Saharan Africa while USA is one of Nigeria’s largest export destination in the world. In addition, the revealed comparative advantage index revealed that Nigeria has comparative advantage in fuels and raw materials while USA has comparative advantage in manufactured products. Meanwhile, the complementarity index, USA’s trade integration index and Nigeria’s trade integration index, revealed that USA and Nigeria will both gain from trade if they cooperate rather than compete. 

Received: 10 September 2023 / Accepted: 28 October 2023 / Published: 5 November 2023