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Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States

With Special Emphasis on the TPS-OIC

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should notify the TNC Secretariat of their specific annual installments of reduction along with the list

of products, and the MFN applied rates applicable on 1 October 2003. Moreover, the Member States

who have ratified the TPS-OIC Rules of Origin should complete the necessary internal legislative and

administrative measures, such as printing TPS-OIC Certificate of Origin and providing specimen

impressions of stamps to the TNC Secretariat.

As of September 2014, 12 Member Countries have signed and ratified all the three agreements and

sent their list of concessions to the TNC Secretariat. These are: Bahrain, Bangladesh, Jordan, Malaysia,

Morocco Oman, Pakistan, Qatar, Syria (OIC Membership suspended in 2012), Saudi Arabia, Turkey,

and the United Arab Emirates.

5 of these countries are Gulf Cooperation Council (GCC) members (United Arab Emirates, Bahrain,

Qatar, Oman and Saudi Arabia). There is a customs union among the GCC Member States which

obligates its members to fulfil the dual requirement of signing and ratifying the three TPS-OIC

agreements and submitting the concession lists jointly. The GCC Secretariat has submitted the list of

concessions on behalf of its six members. Nonetheless, Kuwait has not completed the ratification of

the agreements. For the System to be effectual in the GCC countries, the ratification of the PRETAS

and the Rules of Origin by Kuwait needs to be completed. Table 29 details the current status of the

signature and ratification of the agreements by the Member States.

An important element in the Framework Agreement (Article 6) is the most favoured nation (MFN)

clause, which establishes that benefits shall be extended to all participating states. This means that

the same preferences should, in principle, be granted to all current and future members. With regard

to the MFN clause exceptions are allowed in order to protect "special interests", but on the condition

that these do not have a detrimental impact on other participating states. The Framework Agreement

established also the potential scope of the agreement, that in principle, all goods will be considered

for liberalisation, including agricultural goods, while services are not part of the agreement.

Nevertheless, the de facto scope of the agreement, as discussed below, is somewhat lower. The

Framework Agreement also establishes that in principle preferences should be created with regard

to both tariffs and non-tariff measures. The fact that services are not part of the agreement, means

that it is only GATT service provisions that are of relevance for the member states.

The PRETAS established more specific rules with respect to the preference regime. In particular, it

established that the base rate of the tariffs for any reductions would be the MFN rate as applied in

2003. Table 30 below presents the evolution of the average MFN tariff in each of the current

signatories of the TPS-OIC from 1995. Unfortunately, data on the tariffs applied for all countries was

not available for 2003 and the closest year with data for all countries is 2005. This table extends the

analysis presented in Figure 15 in section 5.2.4.

As can be seen from the table, notionally the concessions to be given are potentially important for

some members. In general and without considering the negative list or exclusions, Bangladesh,

Jordan and Pakistan (measured by the height of the average tariffs) may need to make important