Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
67
At the same time, a mega-agreement between countries in the Pacific including Japan, the US,
Canada, ASEAN and Australia among others, is taking shape. The Trans-Pacific Partner- ship
(TPP), in contrast to the TTIP, involves developed countries but also developing countries such
as Vietnam, Mexico, Chile or Peru. Moreover, this agreement is, in principle, open to any
member willing to accept and commit to the provisions. South Korea, Colombia, Indonesia and
India have expressed interest in joining. An important feature of this agreement is that there is
very little tariff liberalisation that is likely to occur. As Mendez-Parra & Rollo (2014) have
shown, with some notable exceptions such as Vietnam, tariffs between members have been
almost completely liberalised as a result of existing FTAs. This indicates that the effect arising
from shallow integration aspects are likely to be small, and have probably been already
exploited. However, more important could be the provisions and scope for services and deep
integration. Although, in general, restrictions on trade in services are low (with the exceptions
of Vietnam, Malaysia or Mexico), some specific sectors remain heavily protective and sensitive
in some countries. A wide and deep agreement in services could imply a notable boost of trade
within the region. On the other hand, although hard to assess and evaluate a priori, the effects
that liberalisation of investment rules could also be very substantial. It can be seen how the
TPP might also, via the removal of non-tariff barriers and deep integration provisions,
reinforces the value chain links between NAFTA and Asia. Moreover, the inclusion of China,
should this happen, would make these links even stronger, particularly when analysed in the
perspective of what is currently happening in the value chains between China and Nafta,
particularly through Mexico (Baldwin and Lopez Gonzalez, 2013).
In addition many developed and developing countries are negotiating a Trade in Services
Agreement (TISA). Although this agreement would be based on the GATS agreement, it is
expected that its provisions would be deeper. Although it is expected that would bring
additional market access, it is also likely that the agreement will bind the current levels of
liberalisation. Moreover, the agreement would be based on locking in commitments (ratchet
clause), particularly with respect to discrimination and national treatment.
A feature of the TISA and the TPP is that they are open to any WTO member that wishes to
adopt its disciplines and commitments. In fact, in the case of TISA is expected that once a
critical mass of members is attracted, the agreement would be brought back to the GATS. The
open nature of these agreements, shared also by other agreements such as the Anti-
Counterfeiting Trade Agreement (ACTA), potentially implies a degree of competition for the
WTO, or at least a parallel process. As we have seen, many of its members consider that the
current disciplines and provisions might be insufficient and outdated, and that they do not
respond to the current challenges sufficiently.
Although the WTO is trying to react (the agreement reached on Trade Facilitation in December
2013 points in that direction), it is clear that many of its members are looking for alternatives
that can address their interests. The proliferation of FTAs first and the creation of open mega-
regional agreements addressing many of the issues left outside the WTO current negotiation is
currently shaping the world trade institutional architecture.