Analysis of Agri-Food Trade Structures
To Promote Agri-Food Trade Networks
In the Islamic Countries
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5. CONCLUSION AND RECOMMENDATIONS
This study has been necessarily wide-ranging in its consideration of data. Its objective has been
to cover the key issues that arise in terms of agricultural trade networks for sustainable
development within the OIC. It has necessitated an extensive review of data, as well as three
substantial case studies that serve to put the data in context. It is the purpose of this Study to
draw it together to produce key messages and recommendations for the common interests of
OIC member countries and therefore, the key messages and recommendations offered here are
of relevance for member countries as they move forward on this important agenda item.
The study’s first key finding is that global agricultural markets remainmore distorted than those
for manufactured goods, as evidenced by higher average levels of trade costs. Tariffs are a
driving force behind this, but NTMs also play a key role in keeping trade costs high. Despite these
impediments, trade in agricultural products has seen substantial growth since 1995. But market
distortions hold back trade growth, which poses substantial development challenges for
countries that are relatively dependent on agricultural exports, in particular low and middle
income countries.
In terms of agricultural trade within the OIC, although trade in agricultural products has been
growing over recent years, the proportion of world trade accounted for by OIC countries
remains relatively small. In 1995, OIC countries accounted for 6.7% of global exports; by 2016,
that 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, comparedwith 5.0% for non-OIC exports.
Both at the global level andwithin 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.
Regional trade agreements play an important role in promoting the intra-regional nature of
global agricultural trade networks, but the effect varies markedly across regions, time periods,
and product groups. There is evidence that preferential margins are substantial, and much of
world trade in agricultural products—and intra-OIC trade—takes place within RTAs.
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.
In terms of trade networks, 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 separate
networks within the OIC based largely 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.
From a policy perspective, it is by no means 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