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TABLE OF CONTENTS
Executive Summmary .....................................................................................................1
1. INTRODUCTION....................................................................................................7 2. Key Issues in Regional Trade Agreements ............................................................7 2.1. TRADE IMPLICATIONS OF CLOSER REGIONAL INTEGRATION ...........................................................8 Trade Creation..................................................................................................................... 10 Trade Diversion ................................................................................................................... 10 Trade Reorientation.............................................................................................................. 11 2.2. TYPES OF AGREEMENTS .................................................................................................................................... 12 Preferential Trading Agreements (PTAs)............................................................................. 12 Free Trade Agreements (FTAs) ............................................................................................ 13 Customs Unions (CU)........................................................................................................... 14 Economic Integration Agreements and Economic Unions.................................................. 15 Monetary Unions................................................................................................................. 16 2.3. DEEP INTEGRATION............................................................................................................................................. 17 Standards and Technical Barriers to Trade ......................................................................... 18 Competition Policy .............................................................................................................. 20 Investment Policy ................................................................................................................ 21 Trade in Services.................................................................................................................. 21 Government Procurement .................................................................................................. 22 Trade Facilitation................................................................................................................. 22 Rules of Origin ..................................................................................................................... 23 2.4. IMPACT OF REGIONAL TRADING AGREEMENTS ON EXCLUDED COUNTRIES.......................... 25 2.5. TRADE LIBERALISATION AND DEVELOPMENT ...................................................................................... 27 Effect on Growth ................................................................................................................. 27 2.6. TRADE AND GLOBAL VALUE CHAINS........................................................................................................... 30 2.7. EMPIRICS OF TRADE LIBERALISATION ...................................................................................................... 32 Introduction......................................................................................................................... 32 Empirical Analysis of RTAs................................................................................................... 34 3. CURRENT TRENDS IN PREFERENTIAL TRADE AGREEMENTS ..........40 3.1. WTO PROVISIONS FOR REGIONAL TRADE AGREEMENT ................................................................... 40 The Scope of Free Trade Agreements ................................................................................. 40 Deep Integration Provisions in FTAs.................................................................................... 49 Trade Facilitation................................................................................................................. 58 3.2. UNDERSTANDING THE GROWTH IN RTAS IN THE CONTEXT OF THE MULTILATERAL TRADING SYSTEM.............................................................................................................................................................. 59 Speeding up Reform............................................................................................................ 61 Global Value Chains and Regionalism ................................................................................. 63 The Rise of Mega-regional Agreements .............................................................................. 66 4. TRADE LIBERALISATION OF THE OIC COUNTRIES ..............................74 4.1. GENERAL REVIEW OF THE AGREEMENTS INVOLVING OIC MEMBERS ....................................... 74 4.2. TRENDS IN THE OIC COUNTRIES TRADE AND TRADE LIBERALISATION................................... 76 An Overall Picture of OIC Trade........................................................................................... 76 Intra-OIC Trade Shares ........................................................................................................ 78 Sectoral Breakdown of Intra-OIC trade ............................................................................... 83 Overview of Tariff Trends.................................................................................................... 89 Conclusions.......................................................................................................................... 92 4.3. ASSESSMENT OF SELECTED AGREEMENTS .............................................................................................. 94