Analysis of Agri-Food Trade Structures
To Promote Agri-Food Trade Networks
In the Islamic Countries
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3.5. Conclusions and Lessons Learned
The main findings of this section can be summarized as follows:
 OIC regional groups display some degree of commonality in terms of their key exports
and imports at the level of individual products in the Annex 1 classification.
 In the product dimension, import baskets tend to be more diversified than export
baskets. At the country level, however, there is mixed evidence of diversification and
concentration over time, in response to policy changes and patterns of comparative
advantage.
 There is no single trade network among OIC member countries when it comes to
agricultural products. Rather, networks are highly specific to regional groups and
individual products. From a policy perspective, this dynamic is not necessarily negative.
Trade is, and should, be driven by a mix of geography, productivity (comparative
advantage), and policy, and these factors interact in complex ways to produce observed
outcomes.
 Trade with non-OIC members is important across regional groups. The reason is that
geographical entities usually incorporate a mix of members and non-members, so
regional integration efforts, including through trade agreements, foster both kinds of
trade. Increasing trade integration is an important policy objective, but the identity of
trading partners is a less important one. Policymakers should take care when
introducing preferential schemes or entering into trade agreements to maximize trade
creation (use of low cost suppliers) and minimize trade diversion (use of high cost
suppliers).
 Although cross-regional dynamics cannot be summarized easily, one that stands out is
the rise of Asia as source of demand for imports of agricultural raw materials. This
change is due to the rise of manufacturing in that region, including industries like
processed food products and garments, which both require raw materials from
elsewhere, including OIC member countries.
 Another important dynamic is the role played by hub economies in some sectors,
especially Turkey and Saudi Arabia. Their role in agricultural trade networks suggests
that developing closer ties—through trade agreements, but also improved transport
links and connectivity—could be beneficial to exporters of some products. Whether or
not a network is dispersed or concentrated into a hub and spoke pattern is highly
product specific, however.
 Regional integration has been an important dynamic behind growth in intra-OIC trade,
with significant preference margins and wide coverage at the level of key products.
Trade agreements are an important factor driving the exports and imports of OIC
member countries, and serve to give a distinctly intra-regional flavor to intra-OIC trade
relations, in combination with geographical proximity. Trade agreements with
neighboring regions, particularly the EU, likely also shape relations with countries
outside the OIC, and have helped drive trade growth there as well.