Analysis of Agri-Food Trade Structures
To Promote Agri-Food Trade Networks
In the Islamic Countries
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proportion had increased to 8.0%. Consistent with this result, OIC exports grew at an
average annualized rate of 5.9%over that time period, compared with 5.0% for non-OIC
exports.
4. Both at the global level and within the OIC, trade networks in agricultural products have
a strong intra-regional dimension. Trade costs, including those due to geography, are an
important determinant of this outcome. Over time, inter-regional links are becoming
more important in some cases, but there is significant variation by product. However,
there is also an important degree of cross-sectoral heterogeneity at play, so the degree
of concentration or dispersion in a network depends in part on product characteristics.
5. Regional trade agreements (RTAs) play an important role in promoting this intra-
regional dynamic, but the effect varies markedly across regions, time periods, and
product groups. Nonetheless, there is evidence that preferential margins are
substantial, and much of world trade in agricultural products—and intra-OIC trade—
takes place within RTAs.
6. Agreements with neighboring regions, such as the EU, are likely also a significant driver
of growth in extra-OIC trade in agricultural products. For African countries, Regional
Economic Communities (RECs) also play a significant role, as they shape both trade and
agricultural policies on a regional level.
7. It is difficult to talk about a single OIC trade network in agricultural products because of
strong regional dynamics just referred to. Rather there are largely separate networks
within the OIC based on intra-regional trade. Moreover, the characterization of OIC
trade networks in this sector is difficult because of the very important role played by
extra-OIC trade for many countries and products.
8. From a policy perspective, it is not a negative feature of intra-OIC trade that clear
networks do not emerge from the data in some cases. Trade flows are the result of a
complex interplay between policy, geography, and productivity (comparative
advantage). In some cases, this interplay displays distinct characteristics—such as the
role of Turkey and Saudi Arabia as hub countries for some products. But in other cases,
trade links are relatively dispersed due to the tendency for agricultural trade to be in
dissimilar goods (exploiting geographical differences), and influenced by trade policies
including regional and cross-regional trade agreements.
9. There is evidence that most regions—both within and outside the OIC—are becoming
more geographically diversified in their export patterns. This is another reason why
simplistic network analysis is not appropriate for this sector. Rather, it is important to
look at evolving dynamics, and to recognize the importance of market potential both
inside and outside particular groupings. There is a clear movement in the agricultural
sector towards trading with more distant partners, and this movement is likely to
intensify as mega-regional and cross-regional trade agreements become more common.
10. Reference to a measure like Theoretical Revealed Comparative Advantage (TRCA) can
help policymakers identify potential growth sectors, and the report contains detailed
information on this measure, which is highly country and product specific. It is a more