COMCEC Trade Outlook 2018
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drawback as this increases the exposure of OIC countries to external economic shocks resulting
from either a fall in commodity prices and/or demand slowdown in major export destinations.
In addition to high product andmarket concentration, increasing concerns over restrictive trade
measures also underlies the importance of diversification.
There are great differences among the member states in terms of economic development and
the structure of trade. Creating an enabling environment for trade remains one of the main
challenges for the OIC Countries. To this end, policies towards trade liberalization, trade
promotion, trade finance and trade facilitation become priority areas in policy reform agendas
of the OIC Countries.
Regarding trade in services, the volume of commercial services trade is not at the desired level
in the OIC compared to the other regions in the world. Moreover, its share in the trade volume
of the OIC Region is also below the average with compared to the world, even to the developing
countries. Besides, the commercial services in the OIC is based on only a few sectors, travel and
transport. Therefore, the OIC Member Countries need to diversify the commercial services in
order to get the higher share in this growing market.
During the recent decade, most of the OIC Member States have liberalized their trade. 44 out of
57 Member States have acceded to the WTO. Moreover most of them have joined one or more
RTAs. However, many Member States still apply higher tariffs to the imports than the world
averages.
Higher transport costs and cumbersome customs procedures in international trade constitute a
major problem in some of the Member States, hindering not only their international trade but
also their economic and social development. According to World Bank Trading Across Borders
measures the OIC countries are 42 percent below the best performing countries measured by
distance to frontier. The cost and time associated with submitting the necessary documents to
clear the goods is well above the world averages in the OIC countries. Reducing trade costs and
adapting trade facilitation measures are major challenges confronting the OIC countries. 33 OIC
member countries ratified the WTO Trade Facilitation Agreement, which is estimated to reduce
trade costs significantly when fully implemented.
Access to trade finance also constitutes an obstacle in some of the Member States. Inadequate
financial resources limit the SMEs export capabilities to export in several Member States.
COMCEC aims at enhancing economic and commercial cooperation among the 57 OIC Member
States. Since 1984, COMCEC has initiated many cooperation programs and projects towards
increasing intra-OIC trade and addressing the common challenges. Some of these programs and
projects have been realized successfully. Taking into consideration the diversity a trade patterns
of the Member States and the common challenges faced by them, the COMCEC Strategy has
identified trade as one of its cooperation areas.
Under this cooperation area, the Strategy defined trade liberalization, trade facilitation, trade
promotion and trade financing as the output areas in order to reach its strategic objective, which
is “enhancing trade among the Member States”. Furthermore, the Strategy brought two new
implementation instruments, namely Trade Working Group and COMCEC Project Funding to
reach its target.
The implementation of the Strategy with the active participation of the Member States will
contribute to improving the trade environment in the Member States and enhancing intra-OIC
trade.