Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
53
It is important to remark that it is common in RTAs to have some sectoral exclusions (unless
they are specifically included): air transport, maritime cabotage services and financial services.
Air transport (but not related activities) is not included in GATS and is governed by a series of
bilateral treaties. Maritime cabotage (although included in GATS) tends to be reserved to the
national flag in most countries and financial services, particularly given the specificities of the
sectoral legislation in each country. In terms of disciplines, market access provisions are
among the most important. In general, those agreements based on GATS tend to apply
completely, with few exceptions, Art. XVI of the GATS that lists the different type of market
access measures that must be avoided or be adopted. This means that market access
provisions tend to be similar to those in the GATS.
Another important dimension of provisions on services is the MFN clause present in
agreement. This type of clause extends new concessions made to third parties to the members
of the agreement signed. Note that, as discussed earlier, this clause may also apply to tariff
liberalisation schedules in goods. In general, there is symmetry between partners in the
application of this clause but there are examples of agreements with asymmetric pro-
development MFN clauses such as the EC-Cariforum FTA where Cariforum members have to
extend concessions to the EC in case they are given to developed countries or countries with
sizeable shares of world trade (Latrille and Lee, 2012). As previously discussed, some
provisions on services may be covered by rules with respect to policies that limit competition
between domestic and foreign products; that benefit domestic providers with respect to
government purchases or the provision of services; or that limit the operation of subsidiaries
of foreign firms.
Government Procurement, Investment and Competition Policies In many FTAs provisions with
regard to mode 3 - those services that require the presence of the commercial service provider
of one country in the territory of the other - tend to be considered in the investment chapters
(e.g. NAFTA, or the agreements of Mexico with Nicaragua, Costa Rica and Colombia). On the
other hand, in some of the agreements based on the EU model, the provisions related to mode
3 are written in such a way that includes all "economic activities" (e.g.EU-Albania). In terms of
specific investment provisions, there are two types of investment provisions that are of
particular importance. Those related to market access for foreign investors (the extent to
which RTAs include provisions for national and MFN treatment); and also with respect to
mechanisms against discriminatory and discretionary treatment once foreign investors have
located in the local economy.
National treatment is not limited to the post-establishment stage but also seeks to guarantee
foreign investors minimum guarantees of access to some particular markets. Although national
treatment tends to apply to all sectors, there may be some exceptions subject to negotiations.
This has been the approach followed in the case of NAFTA (Berger, Busse, Nunnenkamp and
Roy, 2009). An additional approach, more limiting, restricts national treatment to just the
services sector and barriers may remain in the non-services sectors or in excluded sectors.
This has been the approach followed in US-Jordan, ASEAN and Mercosur. The other element