Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
183
reduction. In the case of Pakistan, for example, only 34.4% of the tariff lines imported from Jordan
will be liberalised; however, when the value of trade is considered, it can be seen that these lines
cover nearly 89% of the imports from Jordan. Similar situations apply to the Pakistan imports from
Bangladesh.
Note, however, that the actual effect of the Fast Track, might be different as we need to consider the
effect on tariff lines without trade. A reduction in the tariff applied that eliminates the "water" in the
tariff might generate trade in products where there is no trade at present43 . Unfortunately, it is not
possible to identify the level of the current water in the applied tariff and, therefore, what the
imports would be should the tariff be eliminated.
In general, the Fast Track is expected to have an amplified trade effect between the same pair of
countries identified when the normal schedule was presented. However, it would still have minimal
effects on the trade between countries already having FTAs or where there are unilateral
preferences. This implies it is probably only the imports of Pakistan, Jordan and Bangladesh that are
expected to be substantially affected by Fast Track liberalisation. Ultimately the final effect would
depend on the products that are included in the respective negative lists.
43 Water in the tariff is the difference between the applied tariffs and the autarky tariff or the tariff that stops imports.
Note that this is different concept to the binding overhang resulting from the "Dirty" tarification process of the WTO
Uruguay Round.