COMCEC Trade Outlook 2017
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commodity and country concentration in total OIC trade is a major 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.
Recent oil price shock underscores the need and case for policies to reduce reliance on oil
revenues and to diversify exports. Commodity prices fell further by 10 per cent in 2016
following the sharp decline of 35.4 per cent in 2015. Slowing demand especially in developing
economies, weak economic recovery in advanced economies, ample oil supply, and US dollars
appreciation were mainly accounted for the fall in commodity prices. Oil prices continued to
decline by 15.4 per cent to 44 dollars per barrel in 2016 down from 52.4 dollar per barrel in
2015.
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, and trade finance and trade facilitation become priority areas in policy reform
agendas of the OIC Countries.
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 of the Member States still apply higher tariffs to the imports than the
world averages.
Higher transport costs and cumbersome customs procedures in international trade also
constitute significant problems in some of the Member States, hindering not only their foreign
trade but also their economic and social development. According to World Bank Trading Across
Borders measures the OIC countries are 50 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 above the world averages in the OIC countries. Reducing trade
costs and adapting trade facilitation measures are major challenges for the OIC countries.
Moreover, 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.