Reviewing Agricultural Trade Policies

To Promote Intra-OIC Agricultural Trade

2.4. Conclusions and Lessons Learned

10% of the world population living in low income countries and producing 4% of world

agricultural output is facing a fierce competition in this sector’s global trade resulting in their

share being only 7% in global agricultural exports (World Bank, 2018). Middle and high income

countries realize the lion share of the global agricultural production, supporting and protecting

their agriculture in order to increase agricultural exports, since their comparative advantages

lay in industry and service sectors.

A symposium jointly organized byWTO Agriculture and Commodities Division together with the

Institute for Training and Technical Cooperation concluded that there is a need for regulated

and increased trade, to improve global welfare by helping the producers while addressing the

challenges of sustainably providing food to the growing global population.

Between 2008-2016, the world’s total agricultural exports grew by 2.35% annually. While

ASEAN’s and NAFTA’s growth rates have been 3.95% and 2.37% respectively, the Rest of the

World composing of low and lower middle income, developing countries mostly recorded the

highest growth rate of 4.23%. Since OIC member countries are largely in this group

, and most

of them rely heavily on agriculture, the need for increasing their exports is a crucial issue thus

this report’s aim of policy recommendations for intra-OIC trade in agricultural products.

Reference to the economic performance of countries is particularly important since agriculture

is directly impacting food security and actually 21 member states of OIC figure among LDC

(United Nations, 2018).

Some global trends which came out of the analysis above need to be particularly taken into

consideration for those policy recommendations. Those are:



The trading blocs have a tendency to leave the raw material exports to the Rest of the

World while continuing increasingly to export processed and higher value added

agricultural food products. A similar tendency is visible for Fish products.



The global agricultural exports are concentrating on the top 5 products and on the

developing world markets.



With regard to tariff protection, two groups come out of the analysis: the group of

NAFTA and EU-28, with a tariff protection around 5% to third countries and the group

of MERCOSUR; ASEAN and OIC with almost two folds of tariff protection. It should be

noted that the first group constitute mostly of developed, industrialized countries, the

second of developing countries. The fact that the second group’s agricultural tariffs are

higher may seem paradoxical since their comparative advantages are mostly in

agriculture. However, the agricultural trade policies applied by the first group, based on

the strategic importance argument of the sector have been successful in increasing

productivity and providing strong competitiveness to those countries. Non-Tariff

Barriers are also used to that end by both groups. Today, the comparative advantages of

the second group are not enough to compensate the difference in productivity and the

first group continues to have leading roles in world agricultural trade. Thus low and

middle income countries should focus on increasing their agricultural productivity

while designing appropriate agricultural trade policies to keep up with the competition

of the developed countries in export markets.

Bahrain, Brunei Darussalam, Kuwait, Qatar, Saudi Arabia and UAE from the OIC Arab group are high income economies but

with a very low agricultural production and exports.