Reviewing Agricultural Trade Policies
To Promote Intra-OIC Agricultural Trade
6
The regional groups of the OIC differ in the number of member countries included in the group,
the average and total level of population of the group, and the overall level of economic and
agricultural development. This implies that comparing the economic and agricultural
performance of the groups is a difficult task. However, the uneven distribution of agricultural
trade capacities, performance and potential of different groups within the OIC can still be simply
documented by looking, for example, at their shares in total OIC agricultural trade: As of 2016,
the Asian Group had the highest share (66.9%) in total OIC exports of agricultural products;
followed by the Arab and the African Groups with shares at 21.8% and 11.3%, respectively. In
terms of agricultural products imports, the Arab Group accounted for 52% of the OIC’s total in
the same year, and was followed by Asian and African groups’ shares of 40% and 8%,
respectively. The African Group countries whose trade networks include many third party
partners have the lowest intra-OIC trade share in its agri-food products exports, 7.4%while the
Arab Group and Asian Group countries have an intra OIC trade share of 45.7% and 11%,
respectively.
The dual challenges of reliance on trade for both agricultural development and securing food
supply to feed the urban populations in OIC member countries make international trade a
strategic area of public policy. Yet, in line with the diverse structures of the OIC economies,
governments employ a wide spectrum of tools in the pursuit of an equally wide ranging set of
trade policies, depending upon the role of international trade in their economy-wide and
agricultural policy objectives.
Trade policy measures are broadly composed of (i) border measures (mainly the tariff rates),
(ii) non-tariff measures, and (iii) trade agreements between two or more countries. Tariffs are
simply taxes exercised on imported products. A tariff can either be levied as an ad valorem tax
in percentage terms or be levied as a specific absolute value per imported unit. There exists a
diverse set of qualifications that characterize tariffs. Most-Favored Nation tariff rates are the
ones promised to be applied to the other members of the WTO under the condition that the
exporting partner does not have a preferential trade agreement with the imposing country.
Bound tariffs are the highest levels of MFN tariffs determined during the trade negotiations
between trade partners. Applied tariffs exercised by the customs administrations of the
imposing country are usually lower than the bound rates committed. The Non-Tariff Measures
include a large and diverse set of regulations, arrangements, taxes and standardization schemes
that are applied to the exported and imported products in a country. Sanitary requirements,
export subsidies, technical barriers to trade, anti-dumping measures, and rules of origin are
among the most commonly exercised NTMs. Trade agreements are negotiated and signed
bilaterally and multilaterally and covers certain predetermined sets of tariff preferences and
NTMs. Regional trade agreements are reciprocal, but preferential trade agreements are the ones
where a country unilaterally agrees to follow the existing preferential system of a partner
country or a groups of partners. Free trade agreements are signed bilaterally and, most
commonly, multilaterally to establish a free trade area, which, by definition, is characterized by
zero tariffs among the partner countries.
The purpose of this report is to review the current performance and agricultural trade policies
of different groups of the OIC countries so as to study the interaction between policies and
performance. Any regularities and patterns emerging from such a study will facilitate the
identification of right measures needed to create an environment enabling the member states
to reach larger volumes of global and intra-OIC trade in a wider range of agricultural products
by taking better advantage of their comparative advantages, and improving their
competitiveness.