Analysis of Agri-Food Trade Structures
To Promote Agri-Food Trade Networks
In the Islamic Countries
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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.
There is evidence that most regions—both within and outside the OIC—are becoming more
geographically diversified in their export patterns over time. 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.
Reference to a measure like 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 reliable measure of export potential than, for example, recent patterns in
the net balance of trade at the product level.
Given the importance of NTMs in the agricultural sector, a key issue for countries developing an
export base is quality and certification. OIC members deal with this issue in different ways, but
there is a clear movement towards supporting national quality infrastructure, including in areas
like halal certification, although the movement is not yet universal.
Although this report has dealt with data and qualitative information in a highly specific way, at
the level of individual countries and products, it is not appropriate to make recommendations
at the same level because they would not be broadly applicable to OIC’s membership. Rather, it
is most useful to focus on areas of strategy and policy that can be of some relevance to all
members across regional groupings and income levels. Based on the findings above, it is possible
to distill a number of feasible recommendations for the consideration of OIC member countries:
1. Collaborative policy liberalization: OIC member countries should continue to work
with organizational and regional partners, as well as other willing parties, to
progressively liberalize agricultural policies at the multilateral level. Pushing for
liberalization within the multilateral system is a long-term goal, and one that limits the
potential for trade diversion that can arise from the use of preferences or regional
agreements. Member countries should also give further consideration to unilateral
liberalization of agricultural policies on an MFN basis, consistent with the evidence
produced in the report that MFN tariffs have been becoming less restrictive over time,
even though no negotiations have been concluded on agriculture since the end of the
Uruguay Round in 1994.
2. Look Beyond Traditional Trade Policies : Both the data analysis and case studies have
shown that the pattern of bilateral trade is a complex interplay of a number of different
economic forces. But a major factor is connectivity. This is all the more true in emerging
agricultural product sectors like fresh fruits and vegetables, and fish, where cold chain
storage is important. There is evidence that some OIC member countries have strong
comparative advantages in these sectors. To take advantage of them, however, they
need to develop high quality transport connections with consumer markets. Trade
agreements often do not address such issues, but broader economic cooperation
programs can. Developing connectivity is one way of reducing trade costs in agricultural
markets, in addition to lowering tariffs and rationalizing NTMs.