Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
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that conformity with ISO 9000 rules in developing countries enhances exports to developed
countries. However, outside some agreements signed by the EU, very little progress has been
made towards the inclusion of mutual recognition provisions in FTAs. Given the complexities
of such negotiations involving additional actors such as national regulatory agencies as well as
representatives of the industries concerned, frequently, mutual recognition agreements are
stand-alone agreements and may even not be part of bilateral trade agreements (Hoekman and
Winters, 2009).
Trade Facilitation
In addition to trade facilitation provisions becoming more frequent in FTAs, at the multilateral
level there have also been efforts to increase the scope of such measures. The recent
agreement on Trade Facilitation at the WTO Ministerial Conference in Bali, Indonesia in
December 2013 points in that direction. As, in principle, the benefits of lower import costs are
accrued to the exporter, on the face of it might be thought that the importer country has very
little incentives to reduce the burden of these procedures. Moreover, the elimination of these
measures might generate frictions with the bureaucracy as a result of the reduction of benefits
associated with them. Therefore, international commitments can be seen as way of addressing
these incentive problems. OECD estimates suggest that cost reduction of all trade facilitation
measures could be up to 15% for low income countries, 16% for lower middle income; 13%
for upper middle income, and 10% for OECD countries. Improving border management,
transports and communications infrastructure could increase global GDP by up to 6 times
more than removing all import tariffs (WEF 2013) and that gains would be more evenly
distributed across countries than with tariff elimination. World Bank estimates suggest that
improving logistics performance would reduce average bilateral trade costs ten times more
than an equivalent percentage reduction in tariffs (Arvis et.al 2013).
Within Free Trade Agreements trade facilitation is aimed at ensuring that the anticipated
benefits associated with the tariff reductions are not hampered by cumbersome border
administrative procedures. Since 1995 the number of FTAs with customs and other facilitation
measures has grown steadily and currently nearly 120 FTAs notified at the WTO, out of nearly
400, include some form of trade facilitation provision (UNCTAD, 2011).
Trade Facilitation measures included in FTAs tend to address three important points:
• Transparency: Ensuring predictability in the application and administration of rules
specified. Usual measures include publication of regulations, laws and procedures;
establishment of enquiry points; and administration of advance rulings.
• Simplification and harmonization: Establishment of easier procedures based on inter-
national standards. Typical provisions include customs clearance procedures, express
shipments, risk management, single windows, transit measures, etc.