Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
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In consequence, RTAs were seen as an opportunity to include disciplines on these aspects as
part of a more ambitious agenda of trade liberalisation. Not only would the benefits in terms of
shallow integration be more immediate and stronger (negotiations are made on the applied
tariffs); it was possible to introduce disciplines and provisions on deep integration aspects
that, it was expected, would enhance the benefits of the tariff liberalisation. For (some)
developing countries, RTAs promise access to other countries’ markets. The possibility of
access to the protected sectors in developed countries (notably agriculture) was potentially a
substantial incentive. Moreover, it was easier for policy makers in developed countries to
gradually introduce reform in these sectors in the context of RTAs, where partners are
relatively smaller than using the multilateral level where the threat to the protected sectors
was substantially more important. In addition, RTAs could help to secure access for developed
countries of raw materials from developing countries. By introducing in the agreements
provisions against the introduction or the addition of restrictions and/or taxes on exports,
developed countries secured improved access to needed raw materials.
Although the benefits of these reforms were also accrued by developing countries, they were
less easily perceived in this way by the public. From a political economy perspective, policy
makers in developing countries found it easier to introduce the perceived necessary economic
reform in their domestic markets, with the quid pro quo of improved access to other markets.
These reforms extended from tariff reductions to the deregulation of services and the
introduction of competition for local monopolies. In addition in the context of greater political
and economic instability, RTAs were seen by some policy makers in developing countries as an
opportunity to lock-in and secure necessary reform - in the context of possibly weak and
unstable institutions, signing agreements with other countries restricts the possibility of using
discretionary trade policy.
Hence RTAs could address different policy objectives in both, developed and developing
countries. Whilst developed countries could enhance their access and their competitive
prospects in the developing countries markets as well as securing access to the necessary raw
materials; developing countries could gain access as well in developed markets but could also
introduce enhance their ability to introduce economic reform in their respective countries.
Global Value Chains and Regionalism
At the same time, important changes that were emerging in world trade in the last years were
not appropriately translated into disciplines and provisions at the WTO. Of particular
importance was the development of Global Value Chains (GVC), as a way of organising
production. The improvement of information and communication technologies has reduced
substantially the cost of coordination and monitoring of production stages. This fragmentation
of production, not only has allowed the outsourcing of production stages to other firms; these
could be located in different countries. Therefore, production has been fragmented between
countries and consequently, the flow of intermediate products being exported and imported as
part of a production chain has grown dramatically. On the other hand, economies of scale and