Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
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6. CONCLUDING COMMENTS
Overall the result of the analysis in this section is that the TPS-OIC agreement is expected to
have a fairly small effect on total trade and on intra-OIC trade. Trade within the TPS-OIC is not
particularly high and there are some FTAs in place that might have already exploited that
trade. Therefore, there is comparatively little scope for further liberalisation within the
agreement. The agreement as currently constituted, presents somewhat low levels of ambition.
Coverage is limited and the liberalisation schedules are potentially ineffective in reducing
tariffs. Moreover, for some members, the schedule has been defined in such a way that will not
produce any reduction in the tariff applied by the GCC members. For Turkey, on the other
hand, it is clear that additional tariff reductions are limited to the extent that Turkey has a
customs union with the EU. Moreover, the TPS-OIC will not improve the current level of access
to Turkey by countries such as Bangladesh, Pakistan or Jordan. As a consequence, as a result of
the minimal expected effects of the TPS-OIC agreement, the welfare effects of the agreement on
consumers and producers are also expected to be low.
However, the Voluntary Fast Track Tariff Reduction Schedule could give a boost to the trade
and welfare effects. Although for those countries under FTAs or receiving unilateral
preferences the effects will continue to be minimal, the TPS-OIC under the Fast Track could
boost trade, particularly with respect to the imports of Pakistan, Jordan and Bangladesh from
each of the other Contracting Countries of TPS-OIC (except for those members with FTAs with
these countries). Turkey imports are expected to increase only from the GCC members. Given
the low levels of their tariff structures, GCC imports would continue exempt, of any
liberalisation commitment.