Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
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as to the maximum tariffs that can be applied by members. Although, a consequence of this
"tarification" process, were high level of bound tariff in certain cases; it was welcomed as it
implied the establishment of a limit on the tariffs that members can apply on a most favoured
nation basis, and made it easier to negotiate subsequent reductions.
However, all these disciplines (and the agreement on services as well) deal mostly with
aspects of shallow integration. Only disciplines on standard border measures are considered,
without much emphasis on the restrictions and constraints applied once a good has crossed
the border. Given that these measures can be as restrictive as tariffs, any trade reform with-
out addressing these issues is likely to be of reduced effect. These type of measures have been
discussed above. They include, but are not limited to, transparency in government
procurement rules, trade and investment, trade and competition and trade facilitation
(customs rules). These so-called Singapore issues started to gained importance in the policy
discussion, mainly in Developed Countries, immediately after the conclusion of the Uruguay
Round.
Developed countries, whose tariffs (except on agricultural products) tend to be low,
considered that the next round of the WTO negotiations should include discussion of such
issues with the objective of introducing disciplines on them. According to this view, the
benefits obtained and that could be obtained in the future round would not be fully grasped if
these issues were not addressed. Developing countries, on the other hand, considered that the
introduction of these elements might imply, restrictions / interference in the use of what they
considered were legitimate tools to the achievement of their development objectives. In
addition some argue that the balance that the Uruguay Round brought in terms of trade with
the developed countries could be broken by the introduction of disciplines in these areas.
In order to re-launch negotiations, these issues were left out of the discussion when the Doha
Development Round (DDR) was launched at the end of 2001. The DDR would continue
pursuing the reduction of tariffs and other disciplines associated with shallow integration; but
all these other issues of deep integration were no longer to be discussed. The European Union,
and other developed countries as well, found this arrangement unsatisfactory. Even where
tariffs were substantially reduced, there could be other measures and legislation in the export
markets that could discriminate against them or favour domestic producers. Additionally,
reaching an agreement at the multilateral level was (and remains) particularly complicated.
This means that even the potential shallow integration benefits, as a result of further reduction
of tariffs, might take many years to be realised. Moreover, the tarification process of the
Uruguay Round left, in many countries, a high bind overhang between the bound and the
applied tariffs. In many cases the bound tariff may be higher than the tariff that the
reductions in the applied tariff. This means that not only the effects of the DDR might take long
to be observed, they could be very ineffective in generating additional trade.