Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
4
 Within the Contracting Countries of TPS-OIC, MFN tariffs applied by the GCC countries are
the lowest (below 5%). Pakistan, Turkey and Bangladesh apply the highest average tariffs
(between 9% and 15%). In terms of the dispersion of tariffs (i.e. variability of tariff rates);
once again GCC tariffs have the lowest level of dispersion as they are all below 5%; whilst
for the other Contracting Countries of TPS-OIC in each case there are significant peaks (i.e.
tariff lines which are significantly higher than the average tariff applied by the country).
 Intra-regional TPS-OIC trade is not particularly high. In addition there are existing FTAs
involving OIC member states. This suggests that for some of the countries, and between
certain bilateral pairs, there is comparatively little scope for further liberalisation, and for
increased trade as a result of that liberalisation. There are also country specificities that
need to be taken into account. For example, for Turkey, tariff reductions may be limited to
the extent that Turkey has a customs union with the EU. As a consequence it is more likely
that the welfare effects of the agreement on consumers and producers could be in some
extent limited. This applies particularly to any pair of countries that already have an FTA
in place.
 For Jordan and Pakistan, the rest of the Parties of TPS-OIC System represent around 20%
of their exports. For the remaining Parties of the TPS-OIC System the share is below 10%.
On the import side, for Pakistan, Oman and Jordan, the rest of the Parties of TPS-OIC
System represent around 30% of their imports. However, this is heavily influenced by the
imports of oil and by trade deflection from India.
 Once oil is excluded, the similarity of the Parties of TPS-OIC System’s exports to the World
and to the rest of the Parties of TPS-OIC System is relatively high. A similar picture
emerges when the imports are compared. This suggests that there might be some scope
for trade creation (or a reduction of any existing trade diversion). However, the scope of
this is reduced given the low level of coverage and the extent of the reductions in the
agreement.
 Compared to other PTA agreements notified under the Enabling Clause, as well as others
involving OIC member states as discussed in Section 4 of the report, the obligatory
commitments that are embodied in the "Normal Track" TPS-OIC could be are somewhat
limited as they call for partial reductions in tariffs for only 7% of tariff lines.
 In the context of the TPS-OIC it is clear that if there are no fast track reductions, the
limited extent of liberalisation which is obligatory means that the agreement is unlikely to
have much of an aggregate effect on trade and economic activity. It is, nevertheless, of
course possible that particular sectors in countries may be affected to a greater degree.
 However, it is worth noting the diversity of countries involved in terms of size, structure
and economic development. This potentially makes it harder to achieve more ambitious