Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
189
For the incumbent members, the effect on their exports will depend on the tariff offer made by
the new entrants. If tariffs are reduced in products with important exports from the
incumbents, the effect on exports could be important and lead to an increase in the intra-TPS
agreement trade. At the end, the effect on exports will depend on the structure of the bilateral
trade between the considered incumbent and new entrant and the tariff liberalisation schedule
proposed by the new entrant. In terms of imports, the effect will depend on changes in the
incumbent’s coverage list and on the particular new entrant considered. Given the existence of
the MFN clause in place within the Parties of TPS-OIC System, it may be unlikely that
incumbents will make changes in the lists already presented. Therefore, the effect on the
incumbent’s imports is likely to depend on the export structure of the new entrants. If the
export structures of the new entrants are such that they will benefit from the liberalisation
schedules already in place, incumbent imports from the new entrants will increase and there-
fore, so will intra-TPS trade.
Consequently, in general, the effect on the non-TPS OIC members that might join TPS will be
associated with the share of trade and the tariff levels of the current TPS members. The higher
the trade with these countries, the higher the possible effect. On the other hand, in specific
terms, the effect will depend on the respective export and import structures, and on the
existent Parties of the TPS-OIC System coverage lists and the coverage lists of the new
members. However, there would also be an additional effect for the new entrants as result of
liberalising with respect to other non-Parties of the TPS-OIC System. In Table 60, we present
the share of exports and imports of the non-Contracting Countries of TPS-OIC respectively
with the TPS-OIC group, other Non-Contracting Countries of TPS-OIC and the Rest of the
World. This table helps to identify, in the first instance, the plausible degree of magnitude of
the effect for the potential future members. Hence if we take the first row we see that out of
the total exports of Afghanistan, just under 16% go to the Non TPS-OIC OIC members, 33% go
to the Rest of the World, and just over 51% go to the current Parties of TPS-OIC System.
In general, the closer the country is to other TPS-OIC Countries or non-TPS-OIC Countries;
typically the higher is the share of trade with these groups. Therefore, Afghanistan, Djibouti
and Lebanon have more significant shares of trade with Contracting Countries of TPS-OIC. This
means that, in general, the effect on these countries of joining the TPS-OIC agreement might be
stronger.
For some members (particularly those in Sub-Saharan Africa), as their trade with the
incumbent TPS members is very low, the expected effect on their trade is more likely to be
minimal. A similar view, with some nuances, can be said with regard to their imports.
However, as other members in the OIC join the TPS, the effect on them could become more
significant. For example, whilst for Benin, The Gambia, Togo or Senegal the share of trade with
the TPS members is very small; they present high shares with other Non-TPS OIC countries. As
countries in these group join the TPS, the effect on these West African countries is more likely
to increase. Ultimately, the effect on the exports to the Parties of the TPS-OIC System will
depend on how their export structures match the (limited) coverage list of the incumbents. If