Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
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GCC countries have a similar production basis and oil and gas remain by far the dominant
commodity exported to the world. Intra-GCC trade differs - in terms of the commodity
structure - from extra-GCC trade. This can be illustrated by the low values of FK index of
similarity between GCC countries exports to GCC partners and world as a whole (Table 22
below). As another illustration mineral fuels, oils, distillation products, etc. (HS chapter 27)
accounted for 84% of Oman’s exports to the World in 2012, whereas exports to GCC were
much less concentrated with products in HS chapter 27 accounting for just 18%. In 2007 (most
recent year for which data for all GCC countries are available) main products in intra-GCC
trade included electrical and electronic equipment (HS85), articles of iron or steel (HS73),
plastics and articles thereof (HS39), nuclear reactors, boilers, machinery, etc. (HS 84) iron and
steel (HS72), pearls, precious stones, metals, coins, etc. (HS71), aluminium and articles thereof
(HS 76), and mineral fuels, oils, distillation products, etc. (HS27).30
Table 22: Similarity of GCC Countries Trade
2007 2011
Saudi Arabia 0.146 n/a
Bahrain 0.161 0.25
Kuwait 0.041 n/a
Qatar 0.224 0.409
Oman 0.208 0.11
United Arab Emirates 0.117 n/a
Note: The Finger Kreinin index (FKI) provides an indication of the similarity in countries’ export structures to
different partners - here GCC as a group and World as a whole. The FKI takes the values between 0 and 1 with
zero indicating no overlap between exports to GCC and the World (in this case impossible given that World
aggregate contains GCC). 2007 is the most recent period for which index can be calculated for all GCC
countries.
Overall the share of intra-GCC trade has been broadly stable at around 8% on the import side,
and 4% on the exports side. For most members the share of trade with the GCC partners is
below 10%. Oman is an exception with GCC import share of around 30% (broadly stable over
the last decade or so). Bahrain saw large changes in trade patterns with GCC share at around
10% for most of the period with individual years when imports from GCC countries
represented 40-50% of the total.
30 It is also worth noting that there are large discrepancies in reported import and export data, especially as
regards mineral fuels, oils, distillation products, etc. (HS27) where reported intra-GCC exports are fivefold
higher than reported intra-GCC imports in 2007.