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Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States

With Special Emphasis on the TPS-OIC

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discriminatory effect in favour of those firms and industries already located within the borders

of the importing country. Given that each country may have different administrative and

bureaucratic procedures, it can be difficult to characterise these measures as they could take

any form.

Moreover, trade facilitation is also associated with other type of barriers not associated with

administrative procedures but to the quality of the infrastructure associated with trade such as

port, storage and other logistic facilities. By increasing the logistic costs, imported goods

become more expensive without considering the incidence of tariffs. Although their effect on

trade is very important, since it is likely that the low quality in infrastructure is also present

across the country, the discriminatory effect is less present. It is also worth noting that the

quality of infrastructure may not the result of a deliberate measure that can be easily solved by

government action or simply by a change in regulation or policy. Therefore, the focus on Trade

Facilitation is associated with all the bureaucratic measures and practices that increase the

costs of trade. Among them, it is possible to identify non-automatic import licenses, time

consuming inspections, cumbersome customs procedures, etc. These types of measures can

have an important protectionists effect on imports that could exceed cost associate with tariffs.

An FTA that liberalise trade between its members might have marginal effects if the costs of

trade associated with these types of measures remains very high.

Facilitating trade is thus about streamlining and simplifying international trade procedure.

Many approaches to trade facilitation therefore focus on customs cooperation provisions.

Some agreements extent the remit to include other border agencies, services and standards -

all with the intent of reducing transport costs and increasing the efficiency of trade as opposed

to the efficiency of production. Trade facilitation measures include anything from institutional

and regulatory reform to customs and port efficiency and are typically highly country specific

and can be costly to implement.

Rules of Origin

Rules of origin (ROOs) are an extremely detailed but essential feature of all regional or

preferential trading agreements (PTAs), except for customs unions. Hence, each regional or

preferential trading agreement which is signed contains a protocol or chapter which deals with

the issue of rules of origin. As explained below these rules of origin is essential and is needed

in order to support any process of regional integration. However, the rules can also undermine

the process of regional integration. In addition because the rules are complex and specific to

each given RTA/PTA, they have an important role to play in determining the extent to which

the regional integration process ends up being a building or a stumbling block to the

multilateral process of trade liberalisation.

The rules of origin are needed in order to establish whether a given good is genuinely eligible

for the preferential reduction or exemption from customs duties conferred by the PTA/RTA

arrangements. Suppose the preferential tariff on the export of an Ethiopian good to the EU is