Reviewing Agricultural Trade Policies
To Promote Intra-OIC Agricultural Trade
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are framed by this strategy. Despite the lack of a clearly determined set of agricultural trade
policy objectives, the elements can be derived from the existing strategy as well as the general
trade policy of OIC member countries.
COMCEC (2012) Strategy Report states the objectives as “increased mobility of goods, capital
and people” in order to serve as a “catalyst to create convergence between higher and lower
income member countries and to enhance peace and stability.” Thus, the primary economic aim
is to increase international trade of member countries together with the mobility of capital and
people. However, studies conducted to determine to what extent this aim is being realized show
that while the trade is increasing, this is not always to the benefit of member states, e.g. imports
from outside of OIC increasing more rapidly than intra-OIC and exports. COMCEC countries'
population represents one quarter of the world population while their share of world trade is
limited only around 10%. The level of COMCEC intra-trade is around 19.1%.
To foster intra-OIC trade, COMCEC introduced the Trade Preferential Systemamong the Member
States of the OIC (TPS-OIC). Based on three agreements, namely the Framework Agreement, the
Protocol on Preferential Tariff Scheme (PRETAS) and the Rules of Origin which entered into
force in 2002, 2010 and 2011 respectively, the system now needs the fulfillment of some
practical steps by the participatingmember states for the entry into force. As of September 2018,
14 OIC member countries have submitted their concession lists while 28 fulfilled only partial
commitments in terms of signature and ratification of the three agreements. 15 member
countries have not participated into the TPS-OIC yet.
In the part related to Trade, the Strategic Objective is stated as the “Expansion of trade among
the member countries” (COMCEC 2012: 6). This is foreseen to be attained by liberalizing trade
towards which the importance of understanding the opportunity costs of protectionist trade
policies are underlined, together with the entering into force of the TPS-OIC, reduction of tariffs,
elimination of Non-Tariff Barriers or Measures (NTB or NTM) as well as adequate trade policies
and supporting accession to the WTO. Such a liberalization would improve resource allocation
and increase economic efficiency in the member countries, being particularly important for low
income members.
However, the existing preferential trade agreements of the member countries with neighboring
or regional member states, but alsowith EU and/or USA, create a problem for further integration
in the framework of OIC.5 In most of the cases, those agreements have been signed without
conducting impact assessment analysis and limit the capacity of the agreeing states to design
independent trade policies. In the case of free trade area (FTA) agreements, for example,
member countries have the liberty to continue applying their existing tariffs to third countries,
protected against the traffic distortion by the rule of origin. In case of a country member of such
an FTA, it would not be possible to form a customs union or to become part of an existing one,
since it would imply the adoption of a common external tariff which is against the liberty of
independent external tariffs to third countries and the rule of origin of the FTAs.
Other challenges regarding trade facilitation concern logistics and insufficiencies in
infrastructure and public services (particularly in transportation). This creates additional costs,
affecting agricultural competitiveness negatively. Transport quality is of crucial importance for
agriculture since the products are perishable to a large extent. Improving the infrastructure is a
requirement in that sense. Agricultural producers, being small and medium-sized enterprises
5 Such as Agadir Agreement, Common Market for Eastern and Southern Africa (COMESA), Economic Community of West
African States (ECOWAS), Gulf Cooperation Council (GCC), Pan-Arab Free Trade Area (PAFTA), West African Economic and
Monetary Union (WAEMU). Note that three OIC members are also member of ASEAN. Those are Brunei, Malaysia and
Indonesia. Please see Table 3.4 for a matrix of trade agreements.