Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
163
When we look into intra-TPS trade (Table 32), the share of Saudi Arabian exports is still very high
(accounting for nearly a third of total intra-TPS exports). However, if you consider imports, we see
that Turkey and Malaysia’s shares are substantially smaller than when total trade is considered. The
UAE and Pakistan’s imports from the TPS-OIS are particularly important, but it is also important to
remember that a sizeable part of the Pakistan imports from the Parties of TPS-OIC System are
deflected imports from India.
In terms of product composition, Table 33 presents the Top 20 TPS-OIC exported products to the
world in 2007. These products represented around 64% of total TPS-OIC exports. At the same time,
the same products accounted for nearly 39% of intra TPS-OIC exports, repeating the pattern of more
diversified intra-region trade seen in Figure 13. It can be seen that oil (270900) dominates clearly
the exports of the group, accounting for almost 41% of total exports. The share of this product falls
dramatically in intra TPS-OIC trade reflecting, the similarity in export structure of many of the
countries in the TPS-OIC. It is noteworthy that in the list of top 20 TPS-OIC exported products there
are many electronic components and electronic final products. However, when the intra-TPS-OIC is
considered the share of these products is particularly low. In fact, in some cases, the value and the
shares are negligible. This suggests that there are some important differences in the products that
are exported intra and extra TPS-OIC; and this also reflects what was seen earlier in this report.
With the objective of analyzing the similarity of the trade of each of the Contracting Countries of TPS-
OIC, in terms of their exports to the TPS-OIC and to the World, we present the Finger-Kreinin Index of
export similarity (excluding oil) in Table 34 (Note that this builds upon Figure 12 in Section 5.2.3, but
provides more information for each of the Contracting Countries of TPS-OIC regarding the evolution
over time). This was calculated at the most detailed level of disaggregation available which was HS 6-
digit. We can see that there is a relatively high degree of similarity between the intra and extra TPS
exports with the highest levels of similarity for Saudi Arabia. Hence if we take the figure for 2007, we
see that there is a 69% overlap between the non-oil products that Saudi Arabia exports to the world,
and the products it exports to the other TPS-OIC states. Moreover, over time, it can be seen that
typically the similarity (at least for those countries with consistent data) has increased. The only
exception seems to be the exports of Pakistan that appear to be becoming more dissimilar. This
suggests that once oil is excluded, the Parties of TPS-OIC System tend to export, in general, somewhat
similar products. The implication of this is that there may be decreasing scope (over time) for trade
diversion.