Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
5
outcomes, and the agreement could be seen as an important stepping stone in the
direction of more substantial and more meaningful liberalisation. A more ambitious
approach is possible under the Fast-Track element of the agreement, which provides a
(voluntary) route for more ambitious liberalisation and therefore for a greater positive
impact on trade and economic growth.
 The Fast Track process allows for the possibility of a minimum of 75% liberalisation of
tariff lines. This would represent a much more substantial level of liberalisation. However
two caveats are worth underlining. The first is that this process is voluntary hence at this
stage it is not possible to assess the extent to which this will be taken up. Secondly, within
the TPS-OIC agreement there appears to be no possibility for a level of liberalisation
between the obligatory amount of 7% and the Fast Track level of 75+%.
 There is little by way of explicit and practical reduction in behind-the-border barriers in
the TPS-OIC agreement. There is a clause which requires countries to remove their "non-
tariff barriers" for those products where tariffs are being reduced. However, there is no
discussion of what these barriers are and what their removal would require. De facto
therefore this provision is not easy to enforce.
 The Rules of Origin provisions are there with the sensible objective of avoiding the
deflection of trade and the avoidance of tariff duties by third countries. The Rules of
Origin are fairly standard in their focus on a 40% value added rule, and with the inclusion
of the provision of diagonal cumulation.
 The TPS-OIC agreement is open to all members of the OIC, implying that the agreement
can be enlarged as members approve and ratify the three agreements. Some OIC countries
are close to joining the agreement as either they have still to ratify one of the agreements
or they have to submit their concession lists.
 In general, the effect on the non-TPS OIC members that might join TPS will be related to
the share of trade and the tariff levels associated with the current TPS members. The
higher the trade with these countries, the higher the possible effect.
 In general, the closer the country is to other TPS or non-TPS members, typically the higher
the share of trade with these groups. Therefore, Afghanistan, Djibouti and Lebanon have
more significant shares of trade with Contracting Countries of TPS-OIC. This means that,
in general, the effect on these countries of joining the TPS-OIC agreement might be
stronger.
 Current Parties of TPS-OIC System’s trade with the rest of the OIC members and potential
new members is generally associated with proximity or the existence of common borders.
Only for Turkey, Jordan and Pakistan, does the share of the non-parties of TPS- OIC
System represent important shares of their total exports (between 10% and 29%).