Preferential Trade Agreements and Trade Liberalization Efforts in the OIC Member States
With Special Emphasis on the TPS-OIC
3
improving trade creation. In addition, in some cases (for example, the Kazakhstan- Russia-
Belarus Customs Union), the common external tariff is set at a relatively high level and
this could be expected to lead to trade diversion.
 Liberalisation of trade in goods is at the heart of all agreements but coverage of tariff
elimination and pace of removal and/or cuts in tariffs differs considerably due to a range
of factors. Rules of origin differ somewhat between the agreement, which makes it
difficult to assess the extent to which those differences may foster or impede utilization of
preferences and trade.
 The picture with regard to coverage of deeper integration issues is mixed. Trade in
services is mentioned in almost all the ten analysed agreements, however, typically by
means of re-iterating countries’ obligations under GATS. In at least three instances,
service pro- visions go beyond GATS commitments. Only in three out of the nine cases
discussed do the agreements incorporate competition policy provisions. This reflects
different degrees of the development of policies in this area at the national level. Public
procurement provisions and especially more ambitious arrangements in that area that
would provide for meaningful access to RTA partners domestic public procurement
markets are hard to find. The majority of analysed RTAs mention intellectual property
rights but the actual provisions are typically light and they never go beyond the
Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The
considered agreements generally do not refer to labour or environmental standards. All
this suggests that the degree of deep integration in these agreements is on balance low,
and the primary mechanism for greater integration is via lower tariffs.
 Effective implementation remains a challenge in the case of several analysed agreements.
In some cases ambitious integration provisions incorporated in the agreements remain
partly detached from realities on the ground where some major trade barriers exist either
at the borders, or in relation to poor transport infrastructure or other similar issues. Also,
administrative capacity may sometimes be lacking to effectively implement some of the
more ambitious provisions. This may then lead to a severe deficit of effective
implementation of an agreement.
 OIC member states have been in the process of establishing a preferential trade
agreement with one other for some time. As early as 1981, the OIC members highlighted
the importance of establishing trade disciplines and preferences amongst themselves.
However, it was not until 2011 that the legal basis for Trade Preferential System Among
the Member States of the OIC (TPS-OIC) was completed after the ratification of tenth
Member Country. As of July 2014 Member Countries completed necessary procedures for
the Agreement are; these members were Bahrain, Bangladesh, Jordan, Malaysia, Oman,
Pakistan, Qatar, Saudi Arabia, Turkey and the United Arab Emirates. The tenth member,
Syria, is currently suspended from the OIC.