Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
157
also be required to offer those preferences to the other TPS-OIC states. Clearly, to the extent that this
is the case, the MFN clause, while designed to further liberalisation and to make it non-
discriminatory with preferential agreements, can then become a break on further liberalisation. This
is because in the hypothetical example given above either or both Turkey and Indonesia may be
reluctant to sign an (EU-compatible) FTA because they would also have to offer those preferences to
the other TPS-OIC states.
In contrast, take the Turkey-Jordan agreement. Here Turkey and Jordan have granted each other
preferences which go beyond the TPS-OIC preferences. However they are not required to offer these
preferences to the other Contracting Countries of TPS-OIC under the MFN clause because the Turkey-
Jordan agreement pre-dates the start of the TPS-OIC. In the case of Jordan, the Turkey-Jordan FTA
signed in 2009 (resulting from the EU-Jordan FTA), establishes a free trade area between Turkey and
Jordan. Therefore, trade has already been liberalised between the two countries. In the case of
Bangladesh and Pakistan, both countries are covered in their exports to Turkey by everything but
Arms (EBA) and GSP+ preferential regimes, respectively. As a consequence, all Turkish imports from
Bangladesh are duty free and an important quantity of products (nearly 90%) is duty free in the
trade with Pakistan. This implies that the effect of the TPS-OIC in the Turkish imports from these
partners will tend to be zero. Only in the case of Malaysia and the GCC Member States might there be
a reduction from the Turkish side as, from January 2014, these countries were excluded from the EU
GSP Regime and are facing standard MFN tariffs in their exports to Turkey. Whilst Turkey and
Malaysia have in April 2014, signed an FTA, it is not clear what would be the steps with respect to the
GCC members. This implies that, on the Turkish side, there may be very little that can be offered in
terms of preferences to other Parties of TPS-OIC System in addition to what is already there.
As mentioned earlier, the PRETAS also considers the removal of para-tariffs (additional fees and
charges that reach imports) and the elimination of non-tariff measures. However, this is limited just
to the products that are subject to tariff reductions. These products are those that have been defined
following the requirements presented above and they are not necessarily the products where the
para-tariffs are higher or where non-tariff measures tend to have more of a deterrence effect. This
implies that products where the tariffs are not high but where non-tariff measures tend to be
particularly prohibitive, might not be subject to any liberalisation effort. On the other hand, the
existence of previous FTAs within Contracting Countries of TPS-OIC such as the GCC might also
reduce the scope for further liberalisation in the elimination of para-tariffs and non-tariff measures
to the extent that these measures have been removed in those previous agreements, suggesting very
little additional gain in this aspect.
The limited obligatory tariff liberalisation as a result of low levels of coverage and tariff reduction, as
well as previous or existing agreements that have already reduced the level of protection within their
members, make it likely that the potential trade effects as a result of the obligatory tariff reductions
are likely to be modest. Greater effects could be realised through the implementation of the fast track
option should this be taken up by any of the member states as discussed in Section 6.5. Similar
considerations apply when considering non-tariff measures. Any effects here will only be meaningful