Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
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The average MFN rates vary among OIC countries. The most recent comparable data on simple
average MFN tariff are available for 2012 (2011 in the case of some countries). In only four of
the OIC countries for which data is available does the simple average of MFN tariffs exceed
20% in 2012: Iran, Sudan, Djibouti and Maldives. Another 11 countries had average tariffs
between 12% and 20%. There is then a group of 18 OIC countries with simple average of MFN
tariffs in the narrow range between 9% and 12%. These can be called countries with
intermediate MFN tariff levels. Finally, a group of 14 countries had tariffs below 8%, with
Brunei Darussalam and Albania having the lowest tariffs. For comparison, the 2012 simple
average MFN tariff for all WTO member countries was 8.34%, the average for OECD countries
was 3.59% and the average for 31 least developed WTO member countries was 12.09%.
The analysis of trade weighted average tariffs that in most instances are available for 2011
does not change this general picture in any significant way. Differences between simple
average and trade weighted average are in most cases small, with the exception of Iran where
very high simple average MFN rate (26.6% in 2012) contrasts with trade weighted average of
below 15%.
The current level of MFN tariffs provides an indication of the upper bound of preference
margins that could be available to parties of any trade agreement implemented by the
individual OIC members. However, given that several OIC members are parties to multiple
agreements actual margins of preferences for any single agreement are likely to be lower than
those suggested by levels of MFN tariffs. Comparable and comprehensive data on effectively
applied tariffs are available for a smaller number of countries making a broader analysis
difficult. As an illustration during 2011-2012 particularly large differences between effectively
applied rates and simple average of the MFN tariff is observed for Morocco, Turkey, Sudan,
Comoros, and Uzbekistan. In the case of these countries effectively applied rates are between
3 and 8 percentage points lower than the MFN rates.
It is also interesting to see tariff trends over time. This provides an indication of liberalisation
effort. First, Figure 16 below clearly shows that on average OIC countries significantly
decreased their MFN tariffs from close to 20% during 1990s to 10-12% more recently. These
trends mirror global developments in tariff levels as depicted in Figure 17, although on
average OIC counties tend to have slightly higher MFN tariffs than the average for all WTO
members. In the last decade the difference between the two was around 2 percentage points.
The overall picture for the evolution of tariffs of OIC members as a group masks variation
between countries. The figure below provides a comparison of MFN tariffs between 2000 (or
the nearest year for which data is available) and 2012 (or the nearest year for which data is
available). During this period six countries cut their tariffs by 10 percentage points or more:
Iran, Morocco, Tunisia, Nigeria, Jordan and Djibouti. In seven other countries the reduction of
average tariff was between 5 and 10 percentage points, and another 8 countries liberalised with
reductions between 1.4 and 4 percentage points.