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

With Special Emphasis on the TPS-OIC

For example this was a controversial issues in the EU’s EPA negotiations. These negotiations

were difficult given that the general provisions applicable to these agreements were still under

negotiation at the WTO level. Therefore, the EPA negotiation lacked a clear le- gal framework.

It was considered important, particularly by the ACP negotiators, to add a Special and

Differential Treatment (SDT) dimension to article XXIV. Currently, there is no de jure provision

for SDT in Article XXIV, in contrast to its services sister, the GATS, which does include this kind

of provision. However, given that SDT is a key principle within the multilateral trade system, it

could be argued that de facto SDT provisions could be applied to Article XXIV. This opens the

possibility of non-full reciprocity in an FTA.

Article XXIV is also not clear on what should be the appropriate measure of trade in order to

establish whether an FTA is liberalising "substantially all" trade between its partners. There

are basically two approaches: First, based on the quantity of lines at the six-digit level being

liberalised. This approach tends to ensure a comprehensive coverage of all major sectors. On

the other side, it is possible to use the value of imports between members of the FTA or the

trade volume approach. However, it is also possible to have a combination of these two

criteria. With respect to the latter, it is necessary to clarify if trade should be measured

individually for each partner or collectively. If trade between two partners is balanced and we

consider that a substantial liberalisation of trade should cover 90% of total trade (measured as

the bilateral imports of both partners); than liberalisation could be achieved with an exclusion

of 20% on one partner and zero on the other. This was the approach that was followed during

the EPAs negotiation where the ACP partners could exclude up to 20% of their trade given that

the EU was excluding only a small share of their imports; it is also the approach that was

followed between the EU and South Africa.

It is also possible to compare similar trade agreements and analyse what were their

interpretations from a similar perspective. While, in general, the agreements signed by the US

with countries such as Chile, Jordan, Panama and CAFTA has full coverage (no exclusions); the

Japan-Chile as well as many other FTAs negotiated by Japan has a list of excluded products.

Moreover, if one considers that in the modalities for the general negotiations at the Doha

Round, countries have asked for exclusions under sensitive or special products, the 100%

coverage interpretation is rarely achieved. Nevertheless, liberalisation does not seem to be

equally distributed across the range of possible products. Crawford, (2012) shows an

important bias against liberalisation in agricultural products. For example, whilst Japan and

Mexico liberalised around 91% of the HS 6-digit lines, only 46% of the agriculture lines (as

defined by the WTO Agreement on Agriculture) will be duty-free at the end of the agreement.

Exclusions could be even bigger in some agreements notified under the Enabling Clause be-

SDT provisions are implicit in the Enabling Clause that allows Developing Countries to receive

preferences from Developed Countries and to grant preferences to other Developing Countries on a

non-symmetric basis and without the need to include substantially all trade.