Analysis of Agri-Food Trade Structures
To Promote Agri-Food Trade Networks
In the Islamic Countries
125
3. Regional integration and preferences: Member countries should continue their work
to develop and implement a preferential market access scheme, as well as to conclude
more intra- and cross-regional trade agreements, as a second best policy option when
multilateral liberalization is not available. This approach can help member countries
benefit from the strong intra-regional dynamic of agricultural trade by combining with
regional partners to liberalize trade on a preferential basis. Most intra-OIC trade already
takes place on a preferential basis, but the number and scope of agreements can be
widened to include more countries. In addition, trade agreements should be regularly
re-inspected for additional areas that can be covered, such as NTMs, including trade
facilitation, quality and certification, mutual recognition, and capacity development, in
addition to just liberalizing tariffs.
4. Limitation of Trade Diversion and Maximization of Trade Diversion: Member
countries should prioritize integration—whether through preferences or trade
agreements—with low cost suppliers. Doing so limits the amount of trade diversion
consequent on a policy change, and helps maximize trade creation.
5. Set Appropriate Policy Objectives : Member countries as both net exporters and net
importers of agriculture products should target growth in inter- as well as intra-
regional trade in agriculture, especially through best use of preferential trade
agreements and hub economies in order to contribute to both sustained agricultural
trade networks and overall intra-OIC trade expansion.
6. Make Use of Hub Economies Where Appropriate : Network analysis shows that there
is no single trade network within the OIC, and that at the product level, network
characteristics vary markedly. However, in some cases, economies like Turkey and
Saudi Arabia play a hub role, with suppliers acting as spokes. It is important for
exporting countries to develop closer links with relevant hubs, so as to help drive their
trade integration.
7. Take Advantage of Emerging Industrialization : Exporters of agricultural raw
materials have the opportunity to benefit from derived demand for light manufactured
goods, such as processed foods and garments, through newly industrializing countries.
This dynamic is particularly strong in Asia, but is also emerging in Africa. It involves OIC
member countries, but also non-member countries. As part of efforts to support intra-
and cross-regional integration, member countries can, in addition to targeting low cost
suppliers, target rapidly industrializing countries where demand growth for
agricultural raw materials is likely to be strongest.
8. Rationalize Non-Tariff Measures: Agricultural exporters encounter a wide range of
NTMs when entering international markets. OIC member countries are no exception to
this rule. The organization can facilitate regional partners and development partners
working together on issues like standards and certification, including in areas of
particular interest, like halal certification, as well as infrastructure and trade facilitation.
Member countries should endeavor to use NTMs only when justified by a rigorous cost-
benefit analysis. This report has not been able to review individual measures in detail,
but there is clear evidence that whereas MFN tariffs are falling, other types of trade