Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
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5. THE TRADE PREFERENTIAL SYSTEM AMONG THE
MEMBER STATES OF THE OIC (TPS-OIC)
OIC member states have been in the process of establishing a preferential trade agreement for its
member states for many years. As early as 1981, the OIC members highlighted the importance of
establishing trade disciplines and preferences amongst themselves. The TPS-OIC System is
structured around three agreements: (i) the Framework Agreement (ii) the Protocol on the
Preferential Tariff Scheme for the TPS-OIC (PRETAS) (iii) the Rules of Origin Agreement. A TPS-OIC
Agreement must be signed and ratified by at least ten OIC Member States for it to enter into force.
The Framework Agreement was opened to signature in 1990 and entered into force in 2002 after the
required number of ratifying states was reached. The Agreement sets out the objectives and
coverage of the rounds of trade negotiations, as well as the general rules and principles for the
negotiations towards the establishment of the TPSOIC.
Following the entry into force of the Framework Agreement, the COMCEC established the Trade
Negotiating Committee (TNC) in 2003. The members of the TNC are the OIC Member States that have
signed and ratified the Framework Agreement. The main function of the TNC is to undertake
negotiations for achieving the objectives of the Framework Agreement, i.e. an operating trade
preferential system among its members.
Accordingly, the first round of trade negotiations was launched in April 2004. The Trade Negotiating
Committee (TNC) successfully conducted and completed the first round in April 2005. At the end of
the round, hosted by the Government of Turkey, the TNC produced The Protocol on Preferential
Tariff Scheme for TPS-OIC (PRETAS) and submitted it to the signature and ratification of the
members of the TNC. The PRETAS complements the Framework Agreement by laying out the
concrete reduction rates in tariffs in accordance with a time-table for implementation. It also covers
non-tariff barriers, anti-dumping and safeguard measures as other trade-related issues. Following
the tenth ratification, the PRETAS entered into force in February 2010.
The second round of trade negotiations for establishing the TPSOIC, hosted by the Government of
Turkey in Ankara, was conducted between November 2006 and September 2007. The Rules of
Origin, the outcome of the second round and presented to the signature and ratification of the
members of the TNC. The Rules of Origin will be applied for determining the origin of products
eligible for preferential concessions under the Framework Agreement and PRETAS. The Rules of
Origin entered into force in August 2011 after the tenth ratification. Thus the legal basis of the
system was completed.
On the other hand, signing and ratification of the TPS-OIC Agreements is necessary but not sufficient
with a view to ensuring the effective implementation of the TPS-OIC. There are other obligations
arising from the provisions of these agreements that must be fulfilled by the Member States which
have ratified all the three agreements. In this regard, the Member States who have ratified PRETAS