COMCEC Trade Outlook 2016
29
Most of the OIC Member States also took part in one or more RTAs over time. The number of
RTAs which include one or more OIC Member States have reached 102 by the end of 2014. Most
of these RTAs are in the form of FTAs. Among these 102
RTAs 25 of them include two or more OIC Member
States. Most of the RTAs signed by the OIC Member
States are bilateral and concluded with the developed
countries.
There are also other approaches for liberalizing trade. Some of the countries which realized that
freer trade boosts economic growth also liberalized their trade unilaterally especially the ones
who previously experienced the generation of exports from a less restricted trade. Many
countries have diversified their economies and enriched the goods subject to export in their
countries. To export, countries do not need to produce all the inputs within their borders any
more.
Figure 32: Number of RTAs including one or more OIC Member States (As of June 2015)
Source
Imported inputs which are cheaper than domestically produced ones are used by the firms to
compete in export markets. For example Nordas, Groli and Grosso (2006) state that in 2001 the
import content of export value in the electronics sector was 32% in China, 55% in Ireland, 65%
in Thailand and 72% in the Philippines. In many cases countries apply lower tariffs to these
kinds of goods.
Application of high tariff rates is common in many OIC Member States. Countries apply high
tariffs for various reasons such as protecting domestic industry, preventing unemployment,
providing income for the central government through customs duties etc. Figure 33 illustrates
“OIC Member States have
a growing interest on the
RTAs”