proceedings of the 4 meeting of the comcec trade …the commodity composition of total oic exports,...

PROCEEDINGS OF THE 4th MEETING OF THE

COMCEC TRADE WORKING GROUP

“PREFERENTIAL TRADE AGREEMENTS (PTAS) AND TRADE LIBERALISATION EFFORTS IN THE OIC MEMBER STATES

WITH A SPECIAL EMPHASIS ON THE TPS-OIC”

COMCEC COORDINATION OFFICE November 2014

Standing Committee

for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC)

PROCEEDINGS

OF THE 4th MEETING OF THE COMCEC TRADE WORKING GROUP

ON

“PREFERENTIAL TRADE AGREEMENTS (PTAS) AND TRADE LIBERALISATION EFFORTS IN THE OIC MEMBER STATES WITH A SPECIAL EMPHASIS ON THE TPS-

OIC”

(October 23rd, 2014, Ankara, Turkey)

COMCEC COORDINATION OFFICE

November 2014

Standing Committee

for Economic and Commercial Cooperation of the Organization of Islamic Cooperation (COMCEC)

For further information please contact: Mr. Kağan AKDOĞAN Expert Mr. Ahmet OKUR Expert COMCEC Coordination Office Necatibey Caddesi No: 110/A 06100 Yücetepe Ankara/TURKEY Phone : 90 312 294 57 10 Fax : 90 312 294 57 77 Web : www.comcec.org e-mail : [email protected] [email protected] [email protected]

http://www.comcec.org/

mailto:[email protected]

mailto:[email protected]

Table of Contents

Introduction: ................................................................................................................................ 1

1. Opening Remarks: ................................................................................................................ 2

2. Outlook of the Trade Sector in the Comcec Region ............................................................. 3

a) Importance of PTAs in Trade Liberalization ....................................................................... 5

b) Recent Trends in PTAs ....................................................................................................... 6

4. Preferential Trade Agreements (PTAs) in the OIC Member States ................................. 10

5. Trade Preferential System among the Member States of the OIC (TPS-OIC) .................. 13

a) Basic Features and Potential of the TPS-OIC ................................................................... 13

b) Practical Issues for the Effective Implementation of the System .................................... 15

6. Policy Options for Successful PTAs with Special Focus on the TPS-OIC ...................................... 16

7. Member Country Presentations .............................................................................................. 21

a) BANGLADESH ................................................................................................................... 21

b) INDONESIAN CHAMBER OF COMMERCE ......................................................................... 21

c) TURKEY ............................................................................................................................ 23

8. Promoting Intra-OIC Trade: Aid for Trade Initiative for the Arab States ....................... 25

9. Utilizing the COMCEC PCM .................................................................................................. 26

10. Closing Remarks ................................................................................................................. 29

Annex I: List of Participants of the Fourth Meeting of the COMCEC Trade Working

Group .......................................................................................................................................... 31

Annex II: Programme of the Fourth Meeting of the COMCEC Trade Working Group ............. 37

Annex III: Room Document Circulated Prior to the Meeting for the Policy Roundtable

Session ........................................................................................................................................ 40

Proceedings of the 4th Meeting of the Trade Working Group

1

Introduction:

The Fourth Meeting of the COMCEC Trade Working Group was held on October 23rd, 2014 in

Ankara, TURKEY with the theme of “Preferential Trade Agreements (PTAs) and Trade

Liberalisation Efforts in the OIC Member States with a Special Emphasis on the TPS-OIC”.

The Meeting was attended by the representatives of 18 Member States which have already

notified their focal points for Trade Working Group namely, Afghanistan, Algeria, Bangladesh,

Egypt, Indonesia, Iran, Iraq, Jordan, Malaysia, Oman, Pakistan, Qatar, Saudi Arabia, Sudan,

Tunisia, Turkey, Uganda and Yemen. Representatives of the COMCEC Coordination Office,

Islamic Center for Trade and Development (ICDT), International Islamic Trade Finance

Corporation (ITFC), United Nations Conference on Trade and Development (UNCTAD), World

Customs Organization (WCO) and Chamber of Commerce of Indonesia (KADIN) have also

attended the Meeting.

At the outset, the representatives of the COMCEC Coordination Office (CCO) briefed meeting on

the Trade Outlook 2014 which reviews recent patterns and trends in the global trade, trade

between the OIC and the world, and intra-OIC trade.

The participants deliberated on the current trade liberalization efforts in the Member States

and explored the main impacts of PTAs on international trade. In this regard, the Study

commissioned by the CCO namely, “Preferential Trade Agreements (PTAs) and Trade

Liberalisation Efforts in the OIC Member States with a Special Emphasis on the TPS-OIC” was

presented. Delegates shared their views regarding the topics covered in the Study during the

Meeting. Some of the Member State delegates also made presentations regarding their

countries’ PTAs experience.

Representatives of the Member States have also shared views and experiences on the Trade

Preferential System among the Member States of the OIC (TPS-OIC). Moreover extensive

deliberations were made on the TPS-OIC with a view to establish policy advices for

rationalization of the System.

The presentations and deliberations made during the meeting highlighted the fact that, most of

the member countries have some type of trade liberalization schemes such as RTAs, PTAs,

Customs Unions or etc. The participants also share their perspectives of the TPS-OIC.


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1. Opening Remarks:

The Meeting has started with the recitation form Holy Quran. During the opening, Mr. Selçuk

KOÇ, Director in the COMCEC Coordination Office welcomed all participants to the Fourth

Meeting of the COMCEC Trade Working Group and gave a brief account on the COMCEC, its

Strategy and COMCEC Trade Working Group. He emphasized that the COMCEC Strategy aims at

making COMCEC a knowledge based forum which will produce and disseminate knowledge

and provide a platform for the Member States to share their experiences in the cooperation

areas.

Mr. KOÇ stated that COMCEC Strategy has four main output areas for Trade namely; Trade

Liberalization, Trade Finance, Trade Facilitation and Trade Promotion. He told that the main

function of the Working Groups is to provide an opportunity for the technical experts of the

Member States to meet at least twice a year in Ankara to produce knowledge, share

experiences and develop a common understanding.

Mr. KOÇ also stated that the COMCEC Coordination Office (CCO) provides technical support to

Working Groups by preparing analytical reports. He informed that an Analytical Report titled

“Preferential Trade Agreements (PTAs) and Trade Liberalisation Efforts in the OIC Member

States with a Special Emphasis on the TPS-OIC” was specifically prepared for the Fourth

Meeting of the COMCEC Trade Working Group and distributed to the Member States registered

to the Trade Working Group. Mr. KOÇ expressed that Project Cycle Management (PCM) aims to

mobilize Member States’ human and intellectual resources. He informed that first and second

project calls were made respectively in September 2013 and 2014. He highlighted that,

Member States have shown great interest to the PCM.

Mr. KOÇ highlighted that the theme of the 4th Meeting is “Preferential Trade Agreements

(PTAs) and Trade Liberalisation Efforts in the OIC Member States with a Special Emphasis on

the TPS-OIC”. He underlined that the Trade Preferential System among the Member States of

the OIC (TPS-OIC) is one of the most important projects of the COMCEC. He expressed that the

System is expected to become operational in near future.

Mr. KOÇ concluded his statement by reminding that CCO prepared a room document based on

Member Countries’ responses to previously circulated questionnaires for the discussions to be

held in policy debate session. He expressed his best wishes for the success of deliberations.

Mr. Kamal AL-KHAMERI, Director General of Trade Agreements Department of the Ministry of

Industry and Trade of the Republic of YEMEN was elected as the chairman of the Meeting. Mr.

AL-KHAMERI firstly thanked all delegates and the CCO for accepting his chairmanship.


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2. Outlook of the Trade Sector in the Comcec Region

Ms. Vildan BARAN, expert in the COMCEC Coordination Office has presented some of the key

findings of the COMCEC Trade Outlook 2014 (Revised Edition), prepared by her, Mr. DELİÇAY

and Mr. OKUR on behalf of the COMCEC Coordination Office.

In the presentation, Ms. BARAN focused on the recent trends and main characteristics of the

trade between OIC Member States and the world and recent trends in intra-OIC trade.

Concerning the trade between OIC Member states and the world, Ms. BARAN stated that total

OIC trade recorded a steady increase until the global economic crisis. After falling sharply in

2009, total OIC trade increased around 25 per cent both in 2010 and 2011. She told that in

2012, total OIC trade continued to grow but at a modest pace with 5.5 per cent. In 2013, due to

the decline in total OIC exports by 3.2 per cent, total OIC trade grew only by 1.1 per cent. Ms.

BARAN pointed out main factors contributed to the weakness of exports in 2013 including the

sluggish pace of world demand growth, falling commodity prices, ongoing political instability

in the Middle East and oil supply disruptions. In her presentation, she shared some figures

developed by WTO to demonstrate developments in global trade. She also presented some

figures on developments in oil and non-fuel prices along with prices of some commodities

exported by OIC Members which fell sharply in 2013. Ms. BARAN also shared some figures

about total OIC trade, share of OIC trade in global trade and the breakdown of total OIC exports

and imports by countries and sectors.

Ms. BARAN stated the share of total OIC exports in world exports decreased to 11.7 per cent in

2013 due to the decline in total OIC exports. She also stated that in terms of real trends the

annual average growth in world exports was above total OIC exports between 2000 and 2013

period. Ms. BARAN stated that the increase in total OIC exports stemmed mainly from exports

of Saudi Arabia, United Arab Emirates, Malaysia, Indonesia, Turkey, Qatar, Kuwait, Nigeria,

Iran and Iraq.

Ms. BARAN stated that country and product concentration in total OIC exports was high in

2013. This makes them vulnerable to external shocks that might result from decreasing

demand in these countries and/or falling commodity prices. She said that apart from China,

developed countries have been major destinations for the total OIC exports in recent years. In

the commodity composition of total OIC exports, the share of mineral fuels, oils and related

products increased to 62 percent in 2013. She stated that commodity concentration is more

apparent when countries examined specifically: the share of petroleum exports in total ranged

between 55 to 100 per cent for the top oil exporters of OIC in 2012. Whereas in several OIC

countries exports heavily depended on a specific product. She shared a figure exhibits that of

the total exports, the share of non-monetary gold was around 66 per cent in Mali and Sudan,

and was 56 per cent in Burkina Faso and Lebanon. On the other hand, in Mauritania, Guinea

and Niger the share of metalliferous ores and metal scrap and non-ferrous metals ranged


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between 50 to 64 per cent. The share of articles of apparel was 79 per cent in Bangladesh

while in Gambia and Pakistan the share of textile yarn and fabrics was 64 per cent and 37 per

cent respectively.

Ms. BARAN stated that total OIC imports originated mainly from developed countries similar to

exports. However, product diversification of the total imports was higher. Manufactured items

like manufactured items such as machinery, nuclear reactors, boilers, electrical and electronic

equipment, vehicles other than railway, tramway and iron and stell also constituted an

important part of total imports in 2013.

Ms. BARAN elaborated also on the intra-OIC trade. She shared some figures about intra-OIC

trade and commodity composition of intra-OIC exports. She expressed that intra-OIC trade

which was around 60 billion dollars in the early 2000s peaked at 374 billion dolars in 2012.

The intra-OIC trade remained at the same levels in 2013. Thus, the share of intra-OIC trade

which was 11.8 percent in 2000 peaked at 18.1 percent in 2012. There was a slight decline in

the share intra-OIC trade to 17.9 per cent in 2013. She stated that intra OIC trade mainly

resulted from high intra trade volumes of United Arab Emirates, Turkey, Saudi Arabia,

Indonesia, Iran, Malaysia, Pakistan, Iraq, Syria and Egypt.

With regards to the intra-OIC exports Ms. BARAN stated that intra-OIC exports which

amounted to 359 billion dollars in 2013 concentrated on a few commoditites. Of the total intra-

OIC exports, share of mineral fuels, oils and related products was 35 per cent, followed by

pearls, precious stones, plastics and articles thereof and animal, vegetable fat and oils and.

These four sectors as a whole constitute half of total intra-OIC exports in 2013.

Ms. BARAN stated that 20 per cent intra-OIC trade target was surpassed by 28 member states

by 2013 as Syria, Somalia, Sudan and Afghanistan having the highest shares in intra-OIC trade.

However, the share of intra-OIC trade was as low as 3 to 7 per cent in Guyana, Mozambique

and Albania.

Ms. BARAN pointed that with regards to the top 10 leading countries in intra-OIC trade, five of

them (, Pakistan, Iran, Egypt, Iraq and UAE) have already exceeded 20 percent target in 2013.

Turkey was very close to reach 20 percent with 19.5 per cent whereas share of intra-OIC trade

was relatively low in Malaysia, Saudi Arabia and Indonesia.

Questions and Comments:

- Mr. AL-KHAMERI thanked Ms. BARAN for the valuable presentation. He reminded that

some of the issues raised in the presentation such as diversification of the export products

in the OIC Member States are very important.

- Representative of PAKISTAN expressed that there is indeed a great need to facilitate trade

among the Member States especially based on the reality that most of OIC imports are

manufactured goods. He added that TPS-OIC is a very important instrument regarding


5

achieving intra-OIC trade target. Representative of TURKEY took the floor and

acknowledged that strengthening economic relations among the brotherly OIC States

possess great importance. She told that expansion of mutual trade could be the main tool

to be utilized in this sense. She also expressed that establishment of TPS-OIC System

offers enourmous opportunities for the OIC Countries. She added that TPS-OIC also offers

participating states to integrate into a larger global economic system. She stressed that

while coverage of TPS-OIC is relatively modest, the Agreement can be defined as an

important stepstone for further trade liberalization. She stated that tariff reduction should

be parallel to removal of non-tariff barriers and countries should make every effort to

eliminate non-tariff barriers not only for a limited number of products subject to tariff

reductions. She told that once the Agreement is entered into force, it should be considered

to expand the Agreement into the new areas of mutual interest such as services and

investment. She concluded her remarks by encouraging other Members of OIC countries

to join the Agreement.

- Chairman of the Meeting Mr. Al-KHAMERI agreed with previous remarks of the delegates

and stated that non-tariff barriers alongside tariff-barriers should also be on the focus in

order to both increase trade among the OIC Countries and with the world.

- Representative of CCO took the floor and informed the participants that a specific session

will be held in the afternoon session which would dwell upon necessary actions to be

taken by the Member States and OIC Institutions for the successful implementation of the

System.

- Representative of AFGHANISTAN expressed that most of the OIC imports are actually

originated from developed countries. He told that complementary products are already

produced in some of the OIC Member States. However he told that trade potential cannot

be actualized due to technical barriers or lack of awareness. He stated Meetings such as

the 4th WG Meeting will hopefully contributed in overcoming mentioned challenges and

eventually total OIC import and exports will be produced with in the OIC Region.

3. Rationale of Trade Liberalization and Recent Trends

in PTAs

a) Importance of PTAs in Trade Liberalization

Mr. Ramoul KHEIREDDINE, expert from the UNCTAD delivered a speech focusing on practical

aspects of the importance of trade liberalization.


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Mr. KHEIREDDINE told that one of the problems experienced in some PTAs is having a large

group of Member Countries with different trade characteristics. He told that some Member

Countries in the MENA region has not even yet became part of the WTO.

Mr. KHEIREDDINE expressed that trade liberalization is not a target itself but rather a mean to

reach higher level of economic and social development. He also argued that trade liberalization

shall be planned in according the benefit of the society instead of the expectations of privileged

groups. He stated that this was the main problem behind slow progress of trade liberalization

in 90s.

Mr. KHEIREDDINE also shared some information regarding UNCTAD’s activities in related

areas. He expressed UNCTAD provides assistance to requested Member Countries by

recommending policy advices for framework structures. He added that another assistance

provided by UNCTAD is the trade policy reviews. He told that based on country’s preference,

UNCTAD reviews key service sectors in which further trade liberalization is aimed by the

country.

Mr. KHEIREDDINE expressed that as UNCTAD they have observed some main characteristics

in unsuccessful liberalization efforts such as lack of political will, insufficient infrastructure

and low institutional capacity.

b) Recent Trends in PTAs

Ms. Mette Werdelin AZZAM, expert from the World Customs Organization (WCO), has

presented the recent trends in the area of Preferential Trade Agreements.

Ms. AZZAM referred to WTO statistics showing that currently more than 300 preferential trade

agreements are in force worldwide. She stated that this proliferation of agreements is partly a

response to the stalled WTO negotiation for a multilateral trade agreement including

harmonized non preferential rules of origin. She added that an increasing number of countries

have turned towards outward-oriented policies and have experienced strong economic growth

since the 1990s.

Concerning the tariff reduction schemes relating to the preferential trade agreements, Ms.

AZZAM mentioned the major trends: in many bilateral/plurilateral across-regions agreements

the contracting parties have agreed on zero duty rates, whereas many regional agreements

start with lower duties to boost intra-regional trade and economy and continue with zero duty

rates after a transitional period.

Ms. AZZAM expressed that when it comes to the geographical coverage of preferential trade

agreements, half of these are not regional. What started as regional agreements when

countries were mostly trading with their neighboring countries has now turned into

agreements based on political and economic considerations.


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Ms. AZZAM told that bilateral agreements are mostly used for across the globe agreements and

lately there has been an increase in bilateral PTAs due to the lack of new regional

opportunities as well as to the fact that it might be easier to negotiate technical complex issues

bilaterally. She said plurilateral agreements are mostly used for agreements within a region,

but also in cases where an existing regional bloc is negotiating on behalf of its members

(ASEAN, MERCOSUR, EU, COMESA etc.).

Ms. AZZAM also mentioned a number of regional differences in relation to PTAs. She noted that

13 is the average number of PTAs that a WTO member is party to, and in general Europe is

leading in number of PTAs. She expressed that African countries have fewest agreements and

almost no cross-regional agreements (even if this pattern now seems to change) where North,

South and Central-America have many cross-regional agreements, and in Asia both regional

and cross-regional agreements are found, perhaps due to the fact that Asia has started

negotiating agreements lately. She told that Asia still has a relatively low number of PTAs per

country and In the Middle East – North African region there are relatively low number of PTAs

per country.

When it comes to the degree of market integration between the parties to a preferential trade

agreement, Ms. AZZAM noted that most negotiations stay at a PTA level, i.e. that they are not

going toward customs unions etc. In fact free trade agreements account for 75 % of all PTAs in

force.

She informed participants that according to the WTO principles (GATT 1994, Article XXIV),

PTA partners can agree on reciprocal tariff dismantling on substantially all the trade between

them. Thus, she said it is possible to exclude sensitive goods from an agreement. She argued

that the higher the MFN rate, the less likely it is to include the product in the PTA, and only less

than 2 % of world trade is eligible for preference margins above 10 percentage points.

Ms. AZZAM also stressed that PTAs have developed from mere agreements on trade in goods

to very comprehensive agreements covering a vast list of policy areas, most of which are not

addressed on a multilateral level, e.g. trade in services, investments, IPR, NTB, human rights,

labor rights and environmental protection. She argued that a clear example of this recent

development is to be found in the so-called mega-regional agreements, defined as agreements

with minimum 3 countries involved, which account for minimum ¼ of global trade and which

involve a high level of internal regulatory engagement.

Regarding rules of origin, Ms. AZZAM mentioned the purposes of these rules is to limit the

preferential market access to goods actually originating in the partner country, thereby

avoiding transshipment and trade deflection. She stated that notwithstanding the WTO

principles of protection of a market through tariffs only, rules of origin can be – and are – used

for protectionist purposes, and even more so during the current global financial crisis.


8

Ms. AZZAM then presented the WCO Revenue Package tools and activities which aim at

ensuring a fair, effective and efficient revenue collection. She told that despite geographical

and economic differences, WCO Members generally agree that trade facilitation and optimum

efficiency are key factors helping revenue collection. She argued that trade facilitation

measures will have a positive effect on revenue streams by maximizing efficiencies and

ensuring optimum standards. She added that trade facilitation will stimulate trade, thereby

increasing revenues and boosting economic growth.

Ms. AZZAM expressed that regional integration is needed in order to ensure a coordinated

approach to the implementation of a common agreement. She told regional integration is

important and should be based on international standards in order to enhance the

interconnectivity at the border. She added that streamlined procedures will invite the informal

trade into the formal path which again will lead to enhanced revenue collection.

Ms. AZZAM also mentioned that origin is an important part of the WCO Revenue Package, and

the WCO Secretariat in close cooperation with Members has developed a number of studies

and guidelines in this area. She stated that studies on trends in preferential origin certification

and verification have been followed up by guidelines to assist Members in the practical

implementation of rules of origin; and a study on origin irregularities encountered by

Members Customs administrations has equally been published. She expressed that a guide to

counter origin irregularities including actual case studies by Members will be developed and

published before June 2015.

Ms. AZZAM concluded her intervention by stressing that in order to assist Members with the

correct implementation of rules of origin, with the identification, design, implementation and

evaluation of capacity building projects and with the development of appropriate customs

infrastructures, the WCO provide tailor made capacity building to its Members.


- Representative of AFGHANISTAN expressed that there are many challenges against

implementation of bilateral PTAs, in this regard he asked if WCO has conducted any surveys

on the success rate of bilateral PTAs. He also added that awareness of TPS-OIC is relatively

low in Afghanistan therefore in order to include more Member Countries to the System,

more awareness raising activities shall be accomplished.

- Representative of EGYPT expressed that most of the OIC Countries are already a part of

PTAs including zero-rate tariff FTAs. Therefore he asked what will be the main impact of

PRETAS on the OIC Member Countries which have already implement PTAs?

- Representative of TURKEY briefly shared Turkey’s Customs Union experience with

delegates. She stated that Turkey has significantly reduced its import tariffs on industrial

products and aligned its trade regulations with EU’s acquis. In return, the value of bilateral


9

trade between the Turkey and the EU has increased more than fourfold since the

establishment of the Customs Union in 1996. She added that the rise in FDI to Turkey from

the EU has been similarly significant. She argued that on the other hand, the alignment

process with the EU’s acquis improved the quality of industrial infrastructure and provided

a significant impetus for trade facilitation and customs reform in Turkey.

- Representative of IRAN made comments to representative of UNCTAD Mr. Ramoul’s

remarks by telling that her country is not a member of WTO nonetheless it is one of the

major players in intra-OIC trade. She asked what is Mr. Ramoul’s view on the level of trade

liberalization in Iran.

- Ms. AZZAM from WCO agreed with representative of Afghanistan’s remarks and stated that

both accession and implementation of PTAs are not easy. She told that Customs generally

included in implementation phase but not participates in negotiation of PTAs and this alone

is a complication in the process. She also expressed that only 16% of global trade is

preferential based on WTO data. She stated this fact does not necessarily means that PTAs

are not used but in many countries MFN rates is already zero thus there is no need for

preferential trade. Ms. AZZAM pointed out that another important aspect is the utilization

rate. She told South Korea is a good example for its efforts on promoting PTAs to both

public and private stakeholders. Regarding representative of Egypt’s remarks, Ms. AZZAM

stated that it is indeed fact that many overlappings occur not only for PTAs but regional

groupings as well. Ms. AZZAM said that it is possible to utilize from different PTAs when

traders are informed comprehensively on features of PTAs.

- Mr. RAMOUL from UNCTAD stated that Turkey is very successful regarding PTAs and

Turkish experience can be a good example for other countries. He argued that trade

liberalization reforms can achieve its targets with credibility, effective institutions and right

trade policies. He expressed that one critical element on eliminating overlapping effects of

different PTAs is to have good human capital which would provide efficient negotiation

capacity/skills. He also stated that it is generally bureaucrats making trade negotiations but

other stakeholders such as private sector shall also be in the process. Mr. RAMOUL also

argued that while being a member of WTO would not solve all problems for a country, it

would be a compelling force to undertake necessary reforms in the area of trade

liberalization.

- Representative of TUNISIA emphasized the link between trade liberalization and

development. He told that trade liberalization contributes to productive capacity, industrial

sophistication as well as human/institutional capacity development. He also underlined

that two important elements of intra-OIC trade is geographical proximity and dominantly

mineral/oil related commodity products. Therefore he expressed there is need for regional

integration efforts and more diversified/manufactured manufacturing schemes.


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- Representative of SESRIC, Mr. BAĞCI stated that SESRIC has conducted several studies to

observe what factors contribute to the development of intra-OIC trade. He informed the

participants that they have found out that trade costs in the OIC Region is quite high; almost

two times higher than the developed countries. He argued that the main reason behind this

figure are natural barriers such as distance between countries (or being land locked

country), entry costs, cumbersome bureaucratic procedures and high tariff rates. He also

mentioned several factors lowering trade costs such as common borders, common

currency, regional trade agreement etc. He added they have searched the impacts of trade

costs on OIC total trade volumes and found out that 1 percent decrease in trade costs in the

Member Countries would increase total trade of the OIC approximately 4.3 percent. Mr.

BAĞCI added that 1 percent decrease in trade costs would increase intra-OIC trade by 3.9

percent. He also argued that while intra-OIC trade has been increasing for the last couple of

years, the OIC trade with other countries increased at a higher rate. Lastly Mr. BAĞCI

expressed that the Report will be on SESRIC website shortly.

4. Preferential Trade Agreements (PTAs) in the OIC

Member States

Mr. Michael GASIOREK from Tradesift University of Sussex made a presentation of the

analytical study titled “Preferential Trade Agreements (PTAs) and Trade Liberalisation Efforts

in the OIC Member States with a Special Emphasis on the TPS-OIC”. His presentation mainly

focused on Preferential Trade Agreements (PTAs) in the OIC Member States.

Mr. GASIOREK expressed that trade and competitiveness is an important element for any given

country’s strategy for economic growth, sustainable employment and therefore poverty

reduction. Preferential trading agreement can also play an important part of this process. He

told that nevertheless, policy makers, commentators, civil society and interest groups concerns

are often expressed about liberalisation, be this regionally or more widely. Those concerns

typically focus on: a lack of domestic competitiveness, imports driving out domestic producers

and stifling emerging manufacturing industries, the difficulties of integrating into value chains;

as well as arguing that ‘other’ countries have successfully developed behind protectionist

barriers. All this potentially leads to powerful lobbies in favour of limiting domestic

liberalization under the broad banner of “we are not ready yet”.

Mr. GASIOREK stated that governments can clear the conditions under which liberalization

takes place matter and therefore possibly should have a role in shaping comparative

advantage

Mr. GASIOREK told that opening up to trade with other countries is also potentially extremely

important. He said that typically there are no clear criteria for being ready for liberalization

and therefore a danger that countries end up never being ready. He added that perhaps more


11

fundamentally, being ready should not be seen as a state of being, but as an endogenous

process between liberalization and the ability of the economy to respond to that liberalisation.

As being liberalised, this increases domestic competitive pressures, offers improved access to a

greater range and quality of intermediates, and encourages investment (both domestic and

foreign). He stated that this changes the incentives for reform, as well as the consequences of

those reforms which may never happen behind protective barriers.

Mr. GASIOREK said that preferential trade liberalization, or regional trading agreements could

play a positive part of the endogenous process outlined above and could provide a means of

easing the transition. He told that this can occur through the regional stimulus to investment,

knowledge and technology transfer, through the increased incentives to deal with domestic

constraints, be this with regard to infrastructure or the regulatory environment; providing a

means for locking in much needed policy reform; giving access to larger regional markets;

enabling common (regional) approaches to issues such as trade facilitation, testing and

certification, competition policy.

Mr. GASIOREK expressed that to the extent that regional liberalization may have such an

impact, one would expect in the first instance this would be reflected in the underlying trade

flows – and in particular in an increase in intra-regional trade shares. Therefore he proposed

following arguments on this with regard to the OIC countries:

1. OIC countries MFN tariffs have decline over the last 10-15 years from close to 20%

during the 1990s to 10-12% more recently. Six countries reduced tariffs by more than 10%;

(Iran, Morocco, Tunisia, Nigeria, Jordan, Djibouti); 7 countries reduced tariffs between 5-10%;

8 countries reduced tariffs between 1.4-4%; 15 countries changed tariffs by 0.5% or less; 3

countries saw average MFN tariffs go up slightly (Uzbekistan, Uganda, Kuwait).

2. The trade data fairly clearly shows that intra-regional trade between OIC member

states has risen over the last 10-15 years. There are difficulties with the data as a number of

countries do not report trade data for recent years, and there is also the issue of the dominance

of mineral fuels which account for around 50% of intra-OIC imports and 20% of intra-OIC

exports. Nevertheless, intra-regional trade shares have risen if we consider both total trade

and where oil is excluded.

3. The highest intra-OIC trade shares are for African and Middle Eastern countries

typically neighboring several other OIC countries. Countries with lower intra-OIC trade shares

are often located either far from other OIC markets or are strongly economically integrated

with non-OIC economies.

4. For many of the OIC PTAs examined the coverage was high. For example ASEAN covers

nearly 100% of tariff lines, similarly ASEAN-China, Agadir, GCC, and WAEMU. Other

agreements such as SAARC involve a more partial approach to tariff liberalisation. Most of the


12

agreements focus on tariff liberalisation and there is generally mixed and limited provisions

with regard to deeper integration issues, such as standards, investment, or services.

5. There is evidence regarding the OIC countries that some agreements may have

increased trade (e.g. Agadir, Egypt-Turkey, Asean). He said these are simply stylized facts and

there could be other factors driving the observed changes in trade flows. Nevertheless these

changes are indicative. This can be seen by looking at the intra-regional trade shares before

and after integration followed by tariff reductions. For example, the ASEAN intra-regional

share of exports rose from around 21% in the late 1990’s to nearly 26% by 2012. For

Indonesia there was a rise in the intra-regional share of imports of around 25% in the early

2000’s to around 45% by 2013. Similarly the share of intra-bloc trade for the Agadir countries

more than doubled between 2004-2009, before declining slightly. For other PTAs (e.g.

WAEMU, GCC, SAARC) there is no clear evidence of any impact on trade; while in other cases

there may be some evidence of arresting declining trade shares (eg. for Kazakhstan).

Mr. GASIOREK stated that the agreements appear to have been less successful, and the

underlying reasons are usually either because the agreements are highly partial in scope (e.g.

SAARC); or are ambitious on paper but there remain real issues of implementation (eg.

WAEMU); or because of the underlying structure of the economies (GCC).

Mr. GASIOREK concluded his presentation by expressing that while trade agreements can be

important, it should not be forgotten that the key issues for development rest on domestic

policy, human capital, physical infrastructure, and the domestic business environment. He

added that the gains from trade liberalisation may take very long to appear or may never

appear without appropriate domestic liberalisation and reform.


- Representative of PAKISTAN firstly asked Mr. Gasiorek if he sees PTAs as institute or

instruments of trade substitution rather than trade creation. Secondly he asked if PTAs

create inefficiency by enabling non-competitive industries to survive. He also argued

that there is discrepancy between multilateral liberalization efforts and regional trade

agreements.

- Representative of TURKEY shared her country’s experience on PTAs with the

delegates. She stated that Turkey is one of the founding members of the World Trade

Organization (WTO) and played an active role in the global trade liberalization efforts

up to now. Accordingly, applied tariff rates in Turkey are generally below the bound

rates and the high tariff rates are subject to liberalization through the negotiation

process. She added that WTO and Customs Union (CU) Agreement with the European

Union (EU) constitutes the backbone of trade policies in Turkey. She also argued that

studies on FTAs show that regional integrations provide cost reduction and increased

productivity by giving opportunity to achieve economies of scale. FTAs also increase


13

national income, social welfare and competitiveness of partner countries at the

international scale, through the establishment of an open and competitive field of play.

She added that FTAs raise awareness of partner countries about each other’s’

economic and commercial potentials and concerns and eventually improve mutual

understanding among business people.

- Mr. GASIOREK expressed that Turkey’s remarks were very important since it provides

country’s beneficial experience from FTAs. Regarding the remarks of Pakistani

representative, Mr. GASIOREK stated that he would prefer multilateral liberalization

under the WTO over regional liberalization. However he expressed that reality is very

different since very slow progress was achieved under WTO whereas number of RTAs

is booming. He argued that best option is to have FTAs with lowest impact on third

parties with non-discriminative approach. He stated that deeper integration through

multilateral liberalization would also create subsequent increase in investments.

- Representative of UNCTAD expressed that rationale behind signing PTAs varies based

on country’s motivation. He suggested that each case shall be reviewed on its own.

5. Trade Preferential System among the Member States

of the OIC (TPS-OIC)

a) Basic Features and Potential of the TPS-OIC

Mr. GASIOREK made a second presentation titled “Basic Features and Potential of the TPS-

OIC”.

He firstly gave brief information on the Trade Preferential System among the Member States of

the OIC (TPS-OIC). Afterwards he gave more detailed information on the two principal routes

to trade liberalisation under the TPS-OIC, which are the normal track and the fast track. Main

features of both approaches are as follows:

Normal track:

1. 7% of tariff lines are required to be covered - with some exceptions. The exceptions

are that the level of coverage is 1% for LDCs as well as for those countries whose MFN

tariffs are less than 10% for more than 90% of tariff lines. For the covered lines the

agreement calls for all tariffs which are above 25% to be reduced to 25%; where tariffs

are between 15-25% than these should be reduced to 15%; and where tariffs are

between 10-15% these should be reduced to 10%.

2. The agreement also calls for non-tariff measures (NTMs) to be reduced but does not

specify which NTMs, how this is to be achieved, nor does it have any timescale.


14

3. There is an MFN clause, which states that benefits should be extended to all

participating states, but exceptions are allowed to protect “special interests”

Fast track:

Cannot exclude products where the tariff is < 10%

1. Tariffs should be reduced by 50%, and a country cannot exclude products where the

tariff is less than 10%.

2. LDCs required to liberalise at least 70% of tariff lines. For all others:

a. If average tariff is above 20% the country has to liberalise at least 75% of tariff

lines

b. If average tariff is between 15% - 20% the country has to liberalise at least

80% of tariff lines

c. If average tariff less than 15% the country has to include at least 85% of tariff

lines

Mr. GASIOREK expressed that how much of an impact might be expected from the TPS-OIC

depends on trade flows. He argued that it is important to point out that the existing patterns of

trade suggest some scope for trade diversion. He told that this derives in part from the fact

that for all countries (except Malaysia and Turkey) the overlap between imports from TPS-OIC

and imports from rest of the world is around 25% or more; and in part because the share of

imports from TPS-OIC members is greater than 10% only for Pakistan, Jordan, Oman, and

Qatar.

Secondly, he told that the magnitude of any impact will depend on the extent of any tariff

reductions that are actually implemented. He told there are several reasons to expect that the

actual extent of tariff reductions will be limited. Namely:

There will be no liberalisation for GCC countries given their existing low tariffs

The presence of pre-existing preferences means that duty free access already applies

in several cases. For example Bangladesh exports to Turkey under the EU’s EBA

preferences, Jordan exports to Turkey under the Turkey-Jordan FTA

Average tariffs > 10% only in the case of Bangladesh, Pakistan & Jordan

Many of the tariffs on the top products imported by the TPS-OIC countries already

below 10%

Normal track only calls for 7% of tariff lines to be liberalised

Mr. GASIOREK argued that all these suggests a high probability that the normal track process

will have very little effect for existing TPS-OIC members. If that is the case, he argued there are

two possibilities. The first is increased membership, and the second is wider adoption of the

Fast Track process. He expressed that increased membership could indeed have a slightly

more significant impact, but with a mandatory coverage level of 7% it is hard to expect much

of an effect.


15

Mr. GASIOREK stated that the Fast Track is indeed much more ambitious and could lead to

much more significant liberalisation and a consequent impact on trade. However, as with

normal track where there are existing agreements in place, less effect to be expected. He said

that if the existing TPS-OIC members went for Fast Track, the largest impact is most likely to

be on Pakistan, Jordan and Bangladesh. If more countries were to join, then for some there

could be more of an impact. For example for Afghanistan, Egypt, Djibouti, Yemen and the

Maldives the existing TPS-OIC members are significant partners with regard to both imports

and exports.

Mr. GASIOREK stated that a key issue in the TPS-OIC as currently constituted is that countries

are faced with a choice of Normal Track (7%) or Fast Track (at least 70% or more) and nothing

in between. He told that the risk is that the lack of a transition between the two options will

serve to discourage countries from choosing the Fast Track option as, either politically or

economically, it involves a big a step away from the minimal Normal Track requirements.

Mr. GASIOREK concluded his presentation by suggesting 5 specific recommendations as

follows:

Introduce a transition between the Normal and Fast Track procedures

Increase coverage under the normal track

To ensure that MFN tariffs are lowered

All for full cumulation as opposed diagonal cumulation with regard to rules of origin

Introduce specific elements and commitments with regard to deeper integration and

non-tariff measures.

b) Practical Issues for the Effective Implementation of the System

Mr. RAHMOUNI from ICDT made a presentation titled “Assessment of the evolution of the

negotiations on the Framework Agreement on the Trade Preferential System among the OIC

Member States”.

He firstly stated that it should be believed that trade can contribute to the achievement of

development and prosperity and the Member States of the Organization of Islamic Cooperation

cannot work alone and ignore the new world economic order without joining an economic

grouping. He expressed that the Agreement can gradually and smoothly lead to the

establishment of a Trade preferential Area, then it can shift to a free trade area or a customs

union.

Mr. RAHMOUNI then gave brief information on the sub-three TPS-OIC Agreements namely;

Framework Agreement, PRETAS and Rules of Origin Agreements. He emphasized that the

Agreement involves solutions and alternatives for all states giving them the opportunity to

choose the appropriate way: either the normal reduction of customs tariffs (Normal Track) or

Fast-Track approach.


16

Mr. RAHMOUNI expressed that initial required number of ratifying Member Countries was

established prior to the end of the Ten Year Programme of Action (TYPOA), which aims at

increasing intra-OIC trade to 20% by 2015. He also argued that in the light of the foregoing, it

may be appropriate to think of the adoption of a Ministerial Declaration that would pave the

way for the development of a new road map covering the forthcoming three or four years

(2015-2018).

Mr. RAHMOUNI also proposed that a meeting of the Secretariat of the Trade Negotiating

Committee- which has not met since 2007- should be held and an expanded meeting of its

members should be convened.

Mr. RAHMOUNI concluded his remarks by expressing the need for effective awareness-raising

and training programs to enable Member States’ fully utilization of the TPS-OIC Agreement. He

added that following topics could be analyzed carefully: competition policy, transparency and

economic protectionist policies, investment, dumping and subsidies, dispute settlements, trade

facilitation, transport and logistics and issues related to Intellectual property, environment and

labor.

6. Policy Options for Successful PTAs with Special

Focus on the TPS-OIC

The Meeting began with a policy debate for Successful PTAs in the Member Countries while

focus on the TPS-OIC in the afternoon session. Delegate of PAKISTAN, Mr. Yousef JUNAID

moderated the session. Discussions were made on topics included in the Room Document

which was circulated to delegates prior to the Meeting (please see Annex 3). The Room

Document will be revised based on Member Countries’ views and suggestions in the related

Session and revised Room Document will be sent to delegates in following weeks via e-mail for

their approval. Approved Room Document will be then submitted to 30th Ministerial Session of

the COMCEC.

Mr. JUNAID opened the discussions by firstly giving brief information on the TPS-OIC System.

He then gave the floor to representative of COMCEC Coordination Office, Mr. Kağan AKDOĞAN

to give further information regarding the session.

Mr. AKDOĞAN expressed that an informative “Room Document” was already circulated to

delegates. He stated that the document outlines three policy areas namely; Increasing the

Member State Capacity for Successful Implementation of the PTAs, Preparing the Ground for

the Implementation of TPS-OIC and Raising Awareness on TPS-OIC.

Mr. AKDOĞAN expressed that CCO designated abovementioned three outlines areas by careful

review of the Analytical Study and Member Country responses to the policy and trade


17

cooperation questionnaires which were circulated in previous months. Mr. AKDOĞAN

summarized 11 Member Countries’ responses to the policy questionnaire. He told that most of

the countries have emphasized the importance and benefits of trade liberalization. Yet several

member states also expressed their concerns with regard to the lack of progress in the Doha

Round and its repercussions particularly on LDCs. He added that with regard to the challenges

and constraints the member states face in taking advantage of trade liberalization efforts, lack

of competitiveness, lack of market access, lack of political will, and lack of institutional and

human capacity are among the most cited constraints.

Mr. AKDOĞAN told that regarding the question namely: “Is your country is party to any PTA

other than the TPS-OIC and what are the success factors for the successful implementation of

PTAs?”, it has observed that seen that all respondent countries were part of at least one PTA

other than the TPS-OIC; such as D-8, ECOWAS, GAFTA, GCC. Moreover in terms of success

factors, he told that several countries cited negotiation modalities and institutional structures

as crucial for the successful conclusion of negotiations and once agreements are put into

practice, there is a general consensus that they lead to better trade and investment climate.

Mr. AKDOĞAN said that answers were mixed on the question on the level of awareness in the

respective country on TPS-OIC. He said that in some countries such as Bangladesh, Malaysia,

and Turkey, there is very high awareness whereas it is low in countries like the Gambia,

Uganda, and Yemen. He also informed that some member states also raised the issue of

compatibility of the TPS-OIC with their existing commitments such as ECOWAS and COMESA

members. Finally Mr. AKDOĞAN summarized the responses to the fourth question regarding

the respondent country’s trade volume with the other OIC countries. He mentioned that many

responses have cited the potential role of the TPS-OIC in increasing their trade with other

member countries either directly or indirectly as a stepping stone.

Mr. AKDOĞAN also shared Member Country responses to trade cooperation questionnaire. He

told that a detailed questionnaire in which 35 trade-related subjects listed circulated to

Member States. It is requested from Member States to specify the subject they would be

interested in providing or receiving technical assistance building. He stated that there is a

common interest in receiving capacity building programs in the areas of customs reform and

establishing national trade facilitation bodies while some member states such as Turkey has

expressed its readiness to offer such capacity building programs.

Mr. AKDOĞAN concluded his remarks by telling that as it could be seen in the room document,

three instruments namely Working Groups, COMCEC Project Funding and Capacity Building

Programs can be utilized.

Following after CCO’s brief Mr. JUNAID shared some of his views on the subject by expressing

that when designed and implemented successfully PTAs can serve as motivators of growth. He

added that some of the common challenges experienced in many countries are the low level of

institutional and human capacity. He argued that to overcome these challenges, it is firstly


18

required to understand present capabilities as well as the desired level of adequacy, secondly

to establish strategies to build national capacity. Mr. JUNAID also touched upon necessary

steps on the ground for the implementation of the TPS-OIC such as training of customs

officials, establishing internal regulations and etc. He also mentioned the need for

introduction/promotion of the TPS-OIC System to non-ratifying member countries. After the

initial background, Mr. JUNAID opened the floor to delegates for discussions.

Representative of EGYPT firstly stated that under PRETAS Member Countries are expected to

provide 2003 MFN rates as base tariff rates. He argued that this issue poses difficulties both to

already ratifying countries as well as future potential members since 2003 MFN rates are

outdated. He told that TNC should review this issue in its first meeting. He then directed a

question to Mr. GASIROEK who had a presentation on TPS-OIC in the previous session. He

asked what other coverage rate (other than 7% or 70%) can be used for the System and how?

Finally he asked how the System will attract interest of businesspeople who have already

many other PTA alternatives?

Representative of UGANDA joined remarks of Egyptian delegate. He told that tariff rates for

most of the products in his country are already below 10%. Moreover he added that his

country signed FTAs with several other OIC Member Countries. He also expressed that his

country’s trade level is relatively low therefore he stressed the importance of awareness

raising and training programs.

Mr. GASIOREK acknowledged that Member Country’s remarks on 2003 MFN base tariff rate is

indeed very pertinent. He told that keeping 2003 MFN rates as well as implementing 7%

coverage would limit the level of trade liberalization. Secondly he expressed that it is true that

selecting either 7% or 70% coverage rates is a big step but this is indeed one of the

characteristics of the PRETAS. He argued that one of the thresholds regarding the 7%

coverage rate is that it is so low that countries can be reluctant to implement the system. In

this regard he suggested that the System could be evolved in a way that when countries

became part of the System they accept to begin with 7% of coverage but after a certain

transition period implementing 70% coverage rate. Finally regarding Ugandan delegate’s

remarks, Mr. GASIOREK stated that best way to create interest on a certain PTAs is to

eliminating any threshold and thus making the agreement economically useful. He added that

eliminating informative and administrative barriers are also important on improving

effectiveness of PTAs.

Representative of the CCO asked for the floor and gave some clarifications on previously made

comments. He told that the Ministerial Decision which approved launching of the first TNC was

in year 2003 hence MFN base rates were designated as 2003 rates. Similarly he added that 7%

coverage was actually the least common denominator rate in year 2003. He stated that this

issue can be changed by revision in the amendment after negotiations in TNC Meetings but it

would certainly take some years.


19

Representative of TUNISIA said that some action can be taken to eliminate technical barriers

against the implementation of the TPS-OIC Agreement. He added that providing favorable

conditions to economic operators possess utmost importance on successful implementation of

any PTAs.

Representative of BANGLADESH expressed that his country’s trade with other OIC countries

are increasing gradually. He also stated that capacity building remains a challenge for his

country. In this regard he requested CCO to take initiative to help his country on the issue.

Finally he also requested to all related parties to take initiative in the implementation of the

TPS-OIC System.

Representative of TURKEY expressed that the TPS-OIC represents a synergy based on the

individual efforts of contracting partners. She added that the liberalization which will be

brought by the agreement is a crucial as a first step in order to take advantage of

complementary of our economies touch upon the role of private sector for effective

implementation of TPS-OIC. She also said that the willingness of private sector to put into

force the agreement and cooperation between governments and umbrella organizations of

private sector has vital importance to implement the TPS-OIC successfully. In this regard she

praised the joint efforts of The Union of Chambers and Commodity Exchanges of Turkey

(TOBB) and Islamic Chamber of Commerce, Industry and Agriculture (ICCIA). Regarding

actions on TPS-OIC she told that TOBB has contributed to the implementation of the

Agreement in Turkey. She said the draft sample of the TPS-OIC Certificate of Origin has been

prepared by TOBB and approved by the Customs authority of Turkey to be used in Turkey. She

added that TOBB will also prepare guideline of issuing TPS-OIC Certificate of Origin while

implementation will be covered by TOBB’s member chambers. She concluded her remarks by

telling that Turkey is ready to provide technical assistance to willing OIC Member States

through seminars, training programs, field visits as long as the need of donor countries are

well defined.

Representative of AFGHANISTAN expressed that cooperation between OIC Member Countries

are very important and successful countries in the area of trade liberalization shall take

initiative to assist countries in relatively early phases. Regarding the room document

presented to the Meeting, he suggested CCO to enrich the document with more details

including non-tariff measures. Regarding promoting the TPS-OIC System, he proposed that use

of COMCEC PCM can be helpful in a way that Member Countries’ projects which aims to

increase awareness on TPS-OIC could be financed by the PCM.

Representative of INDONESIA firstly gave brief information regarding Indonesia’s ratification

of the TPS-OIC System. She then told that while implementation of the System would increase

intra-OIC trade, there is still a low level of awareness on the System in OIC Member Countries.

In this regard she expressed that focused capacity building programs particularly in area of

customs could accommodate the problems.


20

Representative of JORDAN gave information on Jordan’s present trade relationship with the

OIC Member Countries by providing export-import data. He also shared information about

history of Jordan’s TPS-OIC ratifications. He also emphasized importance of awareness raising

activities of the TPS-OIC System. He also argued that politics could sometime may impact on

the level of intra-OIC trade. He finally expressed that improving trade between neighboring

countries can also be beneficial initially.

Representative of SUDAN expressed that Sudan has a great potential for intra-OIC trade since

it neighbors mostly with OIC Member States. On the other hand he told that due to economic

challenges faced in his country, it would be greatly needed to receive support for technical

capacity building.

Representative of MALAYSIA agreed with remarks previously made by other delegates

emphasizing the need for building capacity in the Member States. He told that Malaysia has

building capacity as well as trading programs. Regarding the TPS-OIC, he expressed that they

gave importance to TPS –OIC same level with other PTAs. He also stated Malaysia is now

transformed its concession lists to 2012 format instead of 2003.

Representative of IRAN also joined previous comments by expressing that they experience

problems in presenting concession lists based on 2003 base tariff lines. She stated that Iran

now uses not 6 digits but 8 digits product classification. She added that, they believe there are

two different interpretations for the coverage of TPS-OIC.

Representative of CCO stated that all mentioned technical issues regarding implementation of

TPS-OIC would be discussed in the first TNC Meeting following the full implementation of the

System.

Representative of ICDT expressed that convention of a meeting of the TNC Secretariat ,

including ICDT, CCO and OIC General Secretaraiat prior to TNC Meeting would be helfpful to

address mentioned problems.

Representative of EGYPT suggested that assigning a focal point responsible for PTA issues

would contribute in overcoming the challenges. He also said that publishing list of concessions

in a website in future would facilitate implementation of PRETAS since it would provide

information to private sector.

Representative of CCO made some comments on organizing capacity building programs. He

told that an inventory questionnaire in trade cooperation area was circulated to Member

States. He said that the document includes a list of 35 topics whereby Member Countries can

mark whether to receive or provide capacity building activities.


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7. Member Country Presentations

a) BANGLADESH

Representative of BANGLADESH, Mr. Mir Mashiur ALAM made a presentation regarding his

country’s experience on PTAs.

He firstly gave brief information about Bangladesh by expressing that Bangladesh has a

population of 160 million and an area of 147, 570 sq. km. He said that Bangladesh achieved

average 6% GDP growth in last five fiscal years. Its export and import maintain an increase

trend, but the rate of export growth is less than that of import. He told that total GDP was 188

billion in 2013-14 while export was 30.17 billion and import was 37.19 billion.

Mr. ALAM told that they have a vision to attain the status of a middle income country by 2021.

For achieving this vision, he stated that Bangladesh has been participating in TPS-OIC and

other similar groups. He added that OIC countries are their important trading partner.

Bangladesh’s exports to OIC countries were 15.79 billion in 2012-13, which was 6% of total

export while import from OIC countries was 78.69 billion, which was 20% of total import. He

expressed that Bangladesh is expecting expansion of Intra-OIC trade through immediate

implementation of TPS-OIC and they have already signed and ratified all three instruments of

the Agreement.

Mr. ALAM said that Bangladesh as an LDC faces some challenges like low manufacturing base,

over dependency on imported raw materials and scarcity as well as high cost of capital . On the

other hand he told that there is also a favorable investment environment prevailing in

Bangladesh. He argued that cheap labor, various fiscal and non-fiscal incentives for foreign

investors, large domestic market and favorable treatment in Rules of Origin are the major

attraction for investment in Bangladesh.

Mr. ALAM concluded his speech by telling that Bangladesh expects that TPS-OIC would be

implemented by soon and Intra-OIC trade would expand through it. He mentioned that

removal of Para-tariffs and elimination of Non-tariff barriers are the pre-conditions to achieve

the objectives of the Agreement.

b) INDONESIAN CHAMBER OF COMMERCE

Mr. Budi SAROSO from Indonesian Chamber of Commerce made a presentation titled “Trade

Liberalization Efforts–Indonesia Experience”. He firstly shared brief information on

Indonesian Chamber of Commerce.

Afterwards he touched upon the importance of trade liberalization from the perspective of the

private sector. He told that the reason to enter the global trend of trade liberalization was


22

driven by an ideal notion of enhanced prosperity and development to the nation. He then

shared key facts on several important PTAs of Indonesia namely; Indonesia–Pakistan PTA,

ASEAN and the ACFTA.

Regarding Indonesia–Pakistan PTA, Mr. SAROSO expressed that Indonesia saw Pakistan as a

potential market to boost its CPO exports while Pakistan saw a big wide room to fill its Kinnow

orange to Indonesia’s 230 million populations. He said that under the PTA, Indonesia has

agreed to offer market access to Pakistan on 232 tariff lines on preferential rate while Pakistan

has offered Indonesia a total of 311 tariff lines for market access at preferential tariff. The

combined fresh fruits, cotton yarn, cotton fabrics, readymade garments, fans, sports goods,

leather goods, edible palm oil products, sugar confectionary, cocoa product, consumer goods,

chemicals, tableware, kitchenware as well as rubber, wood, glassware and electronic products.

He stated that both countries expect to see more robust trade activities between the corporate

sectors following the implementation of PTA and hope the trade volume will reach 2 billion

USD in 2014, an increment of 1,65 billion USD in 2012 and 994,28 million USD in 2008.

Regarding ASEAN, Mr. SAROSO told that the agreement foresees to reduce the intra ASEAN

import-export duty to 0%, a reduced tariff of between 0-5%, and exempted quantitative

barriers and other non-tariff barriers. He told that the scheme successfully boosted export

between Indonesia and intra-ASEAN countries from 10% in 1990, to 22% in 2012. Also

boosted import between Indonesia and intra-ASEAN countries from 9% in 1990 to 28% in

2012.

Regarding ACFTA, Mr. SAROSO told that ACFTA has become the largest free trade area in the

world in term of population and the third in term of trade volume after EU and NAFTA. He

mentioned that under this Agreement, the 6 original ASEAN members and China have to

eliminate tariffs on 90% of their products by 2010, while Cambodia, Laos PDR, Myanmar and

Vietnam, were given privilege to implement it in 2015. Mr. SAROSO argued that the

implementation of ACFTA didn’t significantly enhance market access, sales, and company’s

profitability. Only 20% of companies experienced easy market access, and 43% experienced

sales increase. However, he told that majority of companies (61%) driven to improve their

efficiencies in order to complete with China. He added that business community perceived

insufficient ACFTA socialization by the government (only 44% company perceived sufficient

socialization) and only 29% perceived sufficient bureaucracy facilitation, especially in

licensing.

He concluded his remarks by expressing that the emergence of regional free trade agreements

(FTA) is perceived as major determinant on the movement of business activity away from

traditional – developed countries, towards new growth pole in emerging countries.


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c) TURKEY

Turkey’s presentation in the Meeting was combined by three separate presentations namely;

“EU-Turkey Customs Union and Its Gains”, “Turkey’s Free Trade Agreements” and “What can

the private sector do in the OIC’s trade liberalization efforts?”

First presentation was made by Mr. Ahmet ÜSTTEN, from Ministry of Economy of TURKEY. His

presentation was focusing on Turkey’s experience regarding Customs Union with the

European Union (EU). He firstly told that the Turkey-EU Customs Union constitutes the legal

basis of Turkey’s free trade agreements (FTA) and autonomous preferential regimes. Under

the Customs Union, Turkey shall align its commercial policy with the EU’s Common

Commercial Policy. He added that Together with the Common Customs Tariff, the preferential

trade regime constitutes the most important part of the trade policy of Turkey applied towards

third countries. He expressed that Customs Union is a type of economic integration model in

which all the existing customs duties, duties having equivalent effect and quantity restrictions,

measures having equivalent effect are eliminated and also in which a common customs tariff is

implemented to the third countries. In this respect, it is required by the parties that a common

commercial policy and common competition rules are developed and implemented.

Mr. ÜSTTEN expressed that following the establishment of the Customs Union, the product

composition of Turkish exports transformed in parallel to changing production scales and

structure due to the improved competition conditions and market access advantages gained

from the Customs Union. He added that apart from traditional sectors like agriculture or textile

and clothing, certain high value added sectors such as durable goods and automotive increased

both their shares in total exports and improved their competitiveness in the EU and world

market. He said in this respect, in Turkey’s exports between 1995 and 2013, the share of

agricultural products decreased from 17.6% to 7.9% and the share of textile and clothing

products decreased from 48% to 27%; while the share of automotive products increased from

2.8% to 18.5%, the share of machinery products increased from 3.2% to 9.7% and the share of

iron and steel products increased from 4.3% to 5.9%. In addition to that, he mentioned that

Turkey attracted about 110 billion USD foreign direct investments in total from 1996 to 2013,

which is over than 12 times higher than the previous 15 years period, from 1980 to 1995,

when the sum of the foreign direct investments reached 8.7 billion USD while the share of EU

in the total FDIs reached 71% in 2013.

Second presentation was made by Mr. Abdurrahman DENIZ, from Ministry of Economy of

TURKEY. His presentation included information on Turkey’s experience regarding FTAs. He

told that FTAs are important in developing Turkey’s foreign trade with neighboring countries

ensuring exporters compete at more advantageous or at least equal circumstances with other

countries’ exporters and increasing mutual investments. In this context, he told that Turkey is

not obliged to adopt the exact content of the FTAs that the EU has signed as it is, therefore, in


24

FTA negotiations, Turkey own priorities regarding industrial and commercial policy are taken

into consideration. He also mentioned that so far, Turkey has concluded FTAs with 32

countries while there are 13 countries/country blocs which FTA negotiations was started. Mr.

DENIZ also expressed that new FTAs of the Turkey includes more features than the previous

ones. Features such as trade in services, investment, competition, procurement, settlement,

technical cooperation and etc.

Last presentation was made by Mr. Selim KORU from TEPAV. Mr. KORU mostly dwelled upon

private sector’s perspectives on trade liberalization. He expressed that Chambers and Business

Associations can push for reform with regards to institutionalization of private sector. He

argued that Chambers of Commerce can contribute into the process by pressuring their

governments to reform markets, act as an internal problem-solving device, channeling the

experiences and knowledge of businessmen and realign reforms, policies, and programs to

directly target constraints to business. Mr. KORU concluded his presentation by sharing

information on Turkish Chamber of Commerce’s efforts in modernizing Turkey’s border gates

as a sample of private sector contribution.

Views and Comments:

After the presentations, chairman of the Meeting Mr. AL-KHAMAL directed several questions

to delegates such as “What are the main characteristics of the successfully implemented

PTAs?” “What is your assessment regarding multilateral or regional trade liberalization efforts

and their impact on your country’s economy?” and “What role can be played by the private

sector in trade liberalization effort? How private sector‘s benefits from PTAs could be

improved?”

Representative of INDONESIA expressed that there are several challenges against success of

PTAs. He told that most of the companies in Indonesia are small SMEs and they have very

limited knowledge on benefits of PTAs. He argued that more attention shall be given to these

areas by governments.

Representative of UNCTAD argued that success of PTAs also depends on timing. He said that

Turkey-EU Customs Union is a very good example of right moment. He told that Turkey signed

the Customs Union Agreement in right time, while it would be really difficult to have the

Agreement now due to present political/economic conditions. He also argued that

motivational issues also shape effectiveness of the PTAs.

Representative of BANGLADESH expressed that trade liberalization efforts are very important

in contributing expansion of trade through eliminating tariff and non-tariff barriers. He told

that Bangladesh is involved in multilateral trade liberalization efforts under the WTO and it

has been benefiting from RTAs.


25

8. Promoting Intra-OIC Trade: Aid for Trade Initiative

for the Arab States

Mr. Ayhan KARACA from the ITFC presentation made a presentation on “ITFC/IDB Group

Roles in enhancing trade and trade cooperation among OIC MCs: Investment for Trade”.

In the first part of the presentation, Mr. KARACA touched upon the changing nature of the

Preferential Trade Agreements in terms of scope and thematic coverage, where more clauses

are included in the field of trade facilitation and removal of non-tariff measures are underlined.

He told that main reasons of such changes are given as relocation of production, change of

focus from cross border trade to end to end supply chain management because of the trend in

creating Global-regional value chains, development of ICT, which has facilitated

computerization of trade procedures and documents and not last but the least, key interests of

PTAs' signatories. He added that it was concluded that PTAs are necessary but not sufficient to

have enhanced regional economic integration. it was stated that in order to maximize the

benefits from signing such agreements, it is also required to invest institutional and human

capital to effectively administer such agreements, facilitate trade in and across the borders by

creating more enabling regulatory business and investment environment and investing

physical trade related infrastructure.

In the second part of his presentation, Mr. KARACA shared information about IDB Group

Mandate and interventions in trade related areas. He said that IDB Group, a pioneer in

supporting trade led economic growth, has provided more than US$40 billion trade financing

since its establishment, half of which extended to MCs to finance intra-OIC trade. He told that

over US$ 20 billion investment financing projects related to trade infrastructure such as road,

ports, border posts, construction of special economic zones has been approved and disbursed.

He added that businesses covered through export credit and reinsurance of trade operations

and private sector investments by ICIEC.

Mr. KARACA also shared examples of ITFC's trade related technical assistance projects with

the participants. He stated that main objectives of such projects are stated as;

•Support formulation and implementation of OIC level policies and programs

•Assist MCs to identify (and eliminate where possible) regulatory and procedural obstacles to

trade

•Assist MCs to accede to relevant TTF agreements and to simplify and harmonize national

trade and transport procedures

•Promote and support knowledge sharing and cooperation across MCs in the area of trade and

transport


26

In later part of his presentation Mr. KARACA provided information about ITFC's Aid for Trade

Initiative for Arab States (AFTIAS). He expressed that AFTIAS is multi-donor, multi country,

multi agency regional trade development and & integration Program under the theme of Aid

for Trade aiming to foster Arab trade by improving competitiveness, promoting trade and

trade cooperation for better economic integration and new jobs for youth.

In the last part of his presentation, Mr. KARACA presented some of ITFC’s suggestions for the

considerations of MCs as follows;

•Having more cooperation and focus on formulating thematic programs,

•Enhancing Ownership & Institutionalize Partnership for implementation of joint programs

under new COMCEC Strategy,

•Pooling the resources for better & coordinated implementation,

•Supporting national/regional efforts in creating more enabling regulatory environment for

business & investment partnership in and across the borders,

•Exchanging knowledge & best practices for solidarity & harmonization,

•Considering establishing regional/OIC supply chain integration for strategic commodities.


Representative of UGANDA argued that investment for trade concept actually has been well

known for a time; therefore he asked Mr. KARACA what is new in ITFC’s concept?

Mr. KARACA expressed that the new elements is indeed the notion of ITFC’s related efforts. He

said that name of the program itself exhibits the concept since the word “aid and investment”

had not been used jointly by the IDB Group before.

9. Utilizing the COMCEC PCM

The last presentation was made by Mr. Deniz GÖLE, Expert at COMCEC Coordination Office

(CCO) on the Project Cycle Management (PCM) mechanism introduced by the COMCEC

Strategy.

Mr. GÖLE started his presentation with elaborating on what PCM was and where it stood in the

COMCEC Strategy in order to open a good ground for participants to have a better

understanding regarding the project funding process of the COMCEC.


27

After demonstrating the audience the basic logical framework and the cycle to be followed

during the PCM process, Mr. GÖLE highlighted the procedures and financial framework of the

COMCEC PCM in general.

Regarding the submission of the projects, Mr. GÖLE informed the participants that only

member countries registered to the Working Groups and OIC Institutions can submit the

projects to the CCO.

He continued his presentation by giving some detailed information on the project selection

criteria. He expressed that all project proposals must have direct compliance with the

principles of the COMCEC Strategy which are enhancing mobility, strengthening solidarity and

improving governance. A project will be taken eligible if it meets the strategic objectives of the

Strategy, focuses on its output areas and pursues multilateral cooperation among the OIC

member countries. He also mentioned that the nature of the projects would be always of soft

nature related to technical cooperation and capacity building.

With regards to the eligible activities under the technical cooperation and capacity building

projects, Mr. GÖLE enumerated possible activities as follows;

• Preparation of research and analytical studies, strategies, guides, road maps on the relevant field of the COMCEC Strategy

• Study visits

• Trainings programs

• Exchange of experts

• Needs Assessments and Impact Analysis

• Visibility/Publicity/Promotional Activities (Press release, web page, introductory meeting etc.)

• Conferences

• Workshops

After underlining the possible activities, three key actors and their responsibilities during the

whole process under the PCM were identified; Project Owner (Project Submission and

Implementation); the CCO (Program Management) and the Intermediary Bank (Project

Monitoring and Financing). Moreover, the roles of these key actors throughout the project

application, implementation and financing process were defined.

Mr. GÖLE mentioned also monitoring system of the projects in his presentation. He informed

the participants that the Bank would be mainly responsible for financial and technical

monitoring of the projects while the CCO would oversee the overall implementation of the

PCM. In the presentation, reporting procedures of the project activities were also explained.


28

With respect to the financial framework, Mr. GÖLE emphasized that the funds are grant in

nature and would be provided by the COMCEC Coordination Office for the 2013-2015 period.

From the illustration of the indicative grant limits and co-finance rates for the COMCEC

projects, it was seen that member countries could submit a project with a budget up to USD

250.000 with the condition that they would cover at least %10 of the total budget (cash or in

kind). For the OIC Institutions, this amount would be USD 100.000 and at least %25 should be

covered by the project owner.

Mr. GÖLE touched upon also the recent developments in terms of improving PCM mechanism.

He noted the developments as follows;

• The independent appraisal of project proposals,

• Revised durations for project submission periods,

• Upper limit for Project Coordinator’s and Project Expert’s fees,

• New Criteria! – Sectoral themes of Working Group Meetings

Then, he listed the sectoral themes in the poverty alleviation area as follows by emphasizing

that the project idea must be relevant to at least one of these sectoral themes;

• Improving access to basic services (i.e. education and health)

• Developing targeting capacities of the SSN Systems in the member states

• Enhancing capacity of member states in monitoring SSN systems

• Disseminating best practices for accurate and reliable data collection in the area of

SSNs

• Developing effective SSN strategies and policies

• Improving the quality of workforce in SSN systems

• Developing skill enhancement programs for the poor

• Developing job creation policies/programs for the poor

• Using recipient country systems in aid delivery

• Improving the institutional capacity for ensuring effective aid delivery systems

He noted that the first call for project proposals made on 2nd September, 2013 and the final list

declared on 9th March, 2014. The interest from Member Countries and relevant OIC

Institutions was great so that 15 projects selected to be financed by the CCO.


29

Lastly, Mr. GÖLE reminded the participants about the timeline of second call for project

proposals underlining that the call for project proposals has already been made at the

beginning of the September, 2014 and preliminary proposals will be received until October 1st,

2014.


Representative of INDONESIA expressed that her country was successfully accomplished a

project titled “SMEs in the Borderless Era, Shaping Opportunity in the Global Value Chain”

under the COMCEC PCM in 2014. She briefly explained the project and expressed that it was

successful cooperation between CCO and Indonesia. Therefore she stated that Indonesia

believes importance of PCM and will provide full supports for its continuation.

Representative of UGANDA appreciated CCO for its efforts regarding PCM. He told that such

initiatives could be more successful when number of beneficiaries increase. He also expressed

that similar programs exist in COMESA and their experience shows that it is highly important

for participating states in the program to be informed about evaluation results of their

applications. He argued by this way rejected projects’ owners could improve their applications

in upcoming project calls.

Mr. Deniz GÖLE from CCO agreed with views of Ugandan representative and added that CCO

will provide feedback to Member Countries regarding their submissions after declaration of

the final list in PCM website.

Representative of TUNUSIA expressed that PCM is an important tool for promoting integration

among the Member States. On the other hand he stated that electronic submission could be

difficult sometimes. He also proposed that explanatory document shall be put into COMCEC

PCM in advance in order to ensure Member States/institutions can be prepared well before the

submission period.

Mr. Deniz GÖLE told that as CCO, they do our best to simplify/improve the electronic system.

He also expressed that he took note of representative of Tunisia’s suggestion for uploading

reference documents to PCM website.

10. Closing Remarks

The Meeting ended with closing remarks of Mr. Metin EKER, Director General of the COMCEC

Coordination Office.

Mr. Metin EKER thanked all the representatives for their attendance and precious

contributions. Mr. EKER expressed that they had a fruitful day of discussion with very valuable

participation of the member countries as well as the institutions. Mr. EKER stated that trade


30

has always been one of the most important agenda items of the COMCEC and since early days

of the COMCEC one of the main objectives in the area of trade was to establish a PTA among

the Member States. In his speech Mr. EKER also presented a historical background of the TPS-

OIC and expressed that the System is now very close to implementation.

Regarding policy debate session he told that there were very pertinent views and suggestion of

the Member States. He told that CCO took note of all delegates’ views while room document

will be circulated to the countries before its finalization to enable our member countries to

convey additional comments, if any. Afterwards, the CCO will submit this document as an

output of this working group to the 30th Session of the COMCEC to be held on November 25-

28, 2014 in İstanbul. Mr. EKER mentioned that the all trade focal points are welcomed to

participate in the 30th Ministerial Session as part of their country delegations.

Mr. EKER informed the august house that the next meeting, 5th Meeting of the COMCEC Trade

Working Group will be held on March 26th, 2015 in Ankara with the theme of “Improving the

Role of Eximbanks in the OIC Member States for Increasing Their Exports”. He stated that a

research report will also be prepared on this theme and will be shared with the focal points

and other participants at least one month before the meeting.

Another point he reminded the participants that last summer the CCO distributed an inventory

questionnaire to the member countries to reveal what capacity problems and potentials

Member Countries have and what possible cooperation fields in trade are highlighted by the

member countries to benefit from each other as donors and beneficiaries. In this connection,

he expressed that if the CCO receives answers from the member countries it would be able to

make a matching among the member countries.

Lastly, he expressed that the observations of the member countries on the documents

submitted to this meeting namely analytical report and outlook, would be appreciated and

benefited for the next studies of the CCO.

Mr. EKER thanked again to all participants and expressed his hope to see them all in March

2015 in Ankara.


31

Annex I: List of Participants of the Fourth Meeting of the COMCEC Trade

Working Group

A. INVITED STATES

ISLAMIC REPUBLIC OF AFGHANISTAN

- Mr. FEROZ KHAN MASJIDI

Director, Ministry of Commerce and Industries (MoCI)

PEOPLE’S DEMOCRATIC REPUBLIC OF ALGERIA

- Mr. AHLEM RAHMANI

Office Manager, Ministry of Trade

PEOPLE’S DEMOCRATIC REPUBLIC OF BANGLADESH

- Mr. AGM MIR MASHIUR ALAM

Deputy Secretary, Ministry of Commerce

ARAB REPUBLIC OF EGYPT

- Mr. EHAB FATHY

Head of Department, Ministry of Trade, Industry and AMEs

REPUBLIC OF INDONESIA

- Mr. BUDI SAROSO

Deputy, Indonesian Chamber of Commerce

- Ms. SARI HANDINI MURTI

International Trade Policy Analyst, Ministry of Trade

- Ms. DYAH L. ASMARANI

First Secretary, Embassy of Indonesia in Turkey

REPUBLIC OF IRAQ

- Mr. RAAD KASHI SITTAM

Embassy of Iraq in Turkey


32

ISLAMIC REPUBLIC OF IRAN

- Mr. HAMID ZADBOOM

Commercial Counsellor, Embassy of Iran in Turkey

- Mr. ELHAM HAJI KARIMI

Senior Expert, Iranian Office of Trade Representative (IRTR)

HASHEMITE KINGDOM OF JORDAN

- Mr. YOUSEF ABDELGHANI

Embassy of Jordan in Turkey

MALAYSIA

- Mr. IDZHAM AB. HAMID

Trade Commissioner,

Malaysia External Trade Development Corporation(MATRADE)

- Mr. IMRAN JAMILY JOHARI

Sr. Assistant Director, Ministry of International Trade and Industry

SULTANATE OF OMAN

- Mr. ADNAN AL SHAHI

Administrative Researcher, Ministry of Commerce and Industry

- Mr. SALIM AL HAJRI

Economic Researcher, Ministry of Commerce and Industry

ISLAMIC REPUBLIC OF PAKISTAN

- M. YOUSAF JUNAID

Consul General, Consulate General of Pakistan


33

STATE OF QATAR

- Mr. NAYEF AL-HAJRI

Head of Foreign Trade Development,

Ministry of Business and Trade

KINGDOM OF SAUDI ARABIA

- Mr. ANWAR BINHASUSAH

Commercial Attache,

Royal Embassy of Saudi Arabia in Turkey

REPUBLIC OF SUDAN

- Mr. ABDEL AZIZ ABUTALIB

Director General, Ministry of Trade

REPUBLIC OF TUNISIA

- Mr. MOHAMED JAMEL ELIFA

Director, Ministry of Trade and Handicrafts

REPUBLIC OF UGANDA

- Mr. STEVEN KABUGANDA KAMUKAMA

Senior Commercial Officer, Ministry of Trade,

Industry and Cooperatives

REPUBLIC OF TURKEY

- Mr. HASAN YALÇIN

Deputy Director General, Ministry of Economy

- Ms. AYLİN BEBEKOĞLU

Head of Department, Ministry of Economy


34

- Ms. AYŞEGÜL DEMİR

Expert, Ministry of Economy

- Ms. ÖZLEM AKALIN

Expert, Ministry of Economy

- Ms. DİLAN CAN

Assistant Expert, Ministry of Economy

- Mr. YASİN UZUN


- Mr. SELİM KORU


- Ms. YAĞMUR YANIK


- Mr. GÖKAY ÖZÜTÜRK

Dep. Chief

- Ms. NAGEHAN ÖZKAN TURUNÇ

Assistant Expert, Ministry of Customs and Trade

REPUBLIC OF YEMEN

- Mr. KAMAL AL-KHAMERI

Director General

B. INVITED INSTITUTIONS

ISLAMIC CENTRE FOR DEVELOPMENT OF TRADE (ICDT)

- Mr. HOUCINE RAHMOUNI

Adviser of the Director General,

INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION (ITFC)

- Mr. AYHAN KARACA

Manager


35

- Mr. AHMET GÜNDOĞDU

Manager

STATISTICAL, ECONOMIC AND SOCIAL RESEARCH AND TRAINING CENTER FOR ISLAMIC COUNTRIES (SESRIC)

- Mr. KENAN BAĞCI

Senior Economist

SUSSEX UNIVERSITY

- Mr. MICHAEL GASIOREK

Researcher

UNCTAD

- Mr. KHEIREDDINE RAMOUL

Expert, Trade Negotiations and Commercial Diplomacy Branch

WCO

- Mr. METTE WERDELIN AZZAM

Technical Officer

C. COMCEC COORDINATION OFFICE

- Mr. METİN EKER

Director General, Head of COMCEC Coordination Office

- Mr. SELÇUK KOÇ

Head of Department

- Mr. MUSTAFA TEKİN

Head of Department

- Mr. DENİZ GÖLE

Expert, Drafting

- Mr. FATİH ÜNLÜ

Expert


36

- Ms. VİLDAN BARAN

Expert

- Mr. AHMET OKUR

Expert

- Mr. KAĞAN AKDOĞAN

Expert

- Ms. HANDE ÖZDEMİR

Coordinator of Registration Office

- Ms. H. GÜL SAYIN Coordinator of Documentation Center

- Mr. KEMAL ARSLAN

Coordinator of Meeting Rooms

- Mr. ERCAN İBİK

Coordinator of Transportation

- Ms. NAZİFE GÜLGEN

Social Program


37

Annex II: Programme of the Fourth Meeting of the COMCEC Trade

Working Group

PROGRAMME

OF THE

4TH

MEETING OF THE COMCEC TRADE WORKING GROUP

(October 23rd, 2014, Crowne Plaza Hotel, Ankara-Turkey)

“Preferential Trade Agreements (PTAs) and Trade Liberalisation Efforts in the OIC

Member States with a Special Emphasis on the TPS-OIC”

08.30-09.00 Registration

09.00-09.15 Opening Remarks

09.15-09.45 COMCEC Trade Outlook

- Presentation: Ms. Vildan Baran

Planning Expert

COMCEC Coordination Office

- Views and Comments

09.45-10.45 Rationale of Trade Liberalization and Recent Trends in PTAs

- Presentation: Importance of PTAs in Trade Liberalization

Mr. Ramoul Kheireddine

Expert

UNCTAD

- Presentation: Recent Trends in PTAs

Mrs. Mette Werdelin Azzam

Technical Officer

World Customs Organization (WCO)


38

Questions for Discussions

What is the rationale behind arranging Preferential Trade Agreements?

What are the main impacts of PTAs on international trade?

What are the major developments in the area of trade liberalization recently?

What are the future prospects for PTAs?

10.45-11.00 Coffee Break

11.00-12.00 Preferential Trade Agreements (PTAs) in the OIC Member States

- Presentation: Mr. Michael Gasiorek

Researcher

Sussex University-Tradesift


What is the level of trade liberalization efforts in the OIC Member Countries?

What are the main characteristics of the PTAs in the OIC Region?

What are the main challenges faced by the Member States in the area of trade

liberalization?

12:00-12:45 Trade Preferential System among the Member States of the OIC (TPS-

OIC)

- Presentation: Basic Features and Potential of the TPS-OIC

Mr. Michael Gasiorek

Researcher

Sussex University-Tradesift

- Presentation: Practical Issues for the Effective Implementation of the System

Mr. Houcine Rahmouni

Advisor of the Director General

Islamic Center for Development of Trade (ICDT)


12.45-14.15 Lunch

14.15-16.15 Policy Options for Successful PTAs with Special Focus on the TPS-OIC


39

Policy Debate

There will be a policy discussion under this agenda item. The discussions will be based

on the Analytical Study, responds to the Policy Questionnaire and the Room Document

prepared for the Meeting.


How do you evaluate potential of the TPS-OIC? What would the effects of the

TPS-on intra-OIC trade levels when operationalized?

What is the level of awareness on TPS-OIC System in the OIC Member Countries?

What measures can be taken to expedite successful implementation of the TPS-

OIC?

16.15-16.30 Coffee Break

16.30-17.50 Member Country Presentations


What are the main characteristics of the successfully implemented PTAs?

What is your assessment regarding multilateral or regional trade liberalization

efforts and their impact on your country’s economy?

What role can be played by the private sector in trade liberalization effort? How

private sector‘s benefits from PTAs could be improved?

17.50-18.10 Promoting Intra-OIC Trade: Aid for Trade Initiative for the Arab States

- Presentation: Mr. Ayhan Karaca

Manager

International Islamic Trade Finance Corporation (ITFC)


18.10-18.30 Utilizing the COMCEC PCM

-Presentation: Mr. Deniz GÖLE

Expert

COMCEC Coordination Office


18.30-18.40 Closing Remarks


40

Annex III: Room Document Circulated Prior to the Meeting for the

Policy Roundtable Session

ROOM DOCUMENT FOR THE POLICY ROUNDTABLE SESSION

During the 4th Meeting of the COMCEC Trade Working Group, a policy debate session will be

held regarding the possible policy actions to be taken to approximate member state policies in

selected trade-related issues. In the designation of these issues, the COMCEC Coordination

Office (CCO) has taken into consideration the analytic study titled “Preferential Trade

Agreements (PTAs) and Trade Liberalisation Efforts in the OIC Member States with a Special

Emphasis on the TPS-OIC”, prepared specifically for this meeting, as well as the member

states’ responses to the policy questions and to the questionnaire on trade cooperation, which

were sent to the member states by the CCO earlier. This document outlines three policy areas to

be discussed in the Meeting that feature in all the above-mentioned documents, with some

rationale. The aim of this session is to provide the member states with an opportunity to discuss

and possibly come up with some policy advices in these policy areas.

- Increasing the Member State Capacity for Successful Implementation of the PTAs

PTAs have the potential to be an engine for growth that could lift millions of people out of

poverty by generating many new trade and economic opportunities. However, in order to take

advantage of such opportunities, member countries need to ensure that the agreements are fully

implemented and administered in an effective and timely fashion. That constitutes a significant

challenge as many member countries lack the institutional capacity to do so and need to

introduce adequate institutional processes and infrastructure involving several public and private

agencies.

Hence, in order to confront the challenges associated to the implementation of the preferential

trade agreements and to be able to take advantage of the economic and commercial

opportunities that are resulting from the trade liberalization process, it is necessary for the OIC

countries to (i) have an accurate understanding of the magnitude and scope of such challenges;

and (ii) develop strategies aimed at improving the effectiveness and efficiency of the institutions

that are in charge of the regulation and administration of those agreements, ensuring compliance

with its provisions.

- Preparing the Ground for the Implementation of TPS-OIC

Participating states of the TPS-OIC are encouraged to organize events with a view to ensuring

that practical preparations for the implementation of the System, such as designating the

competent body which will print the TPS-OIC Certificate of Origin and its printing are made in

timely and effective manner. Furthermore, organizing training seminars for the local customs


41

administrations and other relevant actors, and publishing the required internal regulations for the

smooth implementation of the Agreement are needed.

- Raising Awareness on TPS-OIC

The success of the TPS-OIC System will be enhanced with the involvement of member states

which are not yet party to the System. Thus, relevant public institutions, private sector

companies, and other economic operators of these countries need to have a full understanding of

the benefits of the TPS-OIC System. In this regard, responsibility rests with both relevant OIC

Institutions and the member states. ICDT and CCO are the co-secretariats of the Trade

Negotiating Committee of the COMCEC and they have been undertaking various efforts to raise

awareness on the TPS-OIC. For the member states which are yet to complete the signing and

ratification of the TPS-OIC Agreements, and/or fulfill all the requirements of the System,

further awareness-raising events may also be organized to ensure that their constituencies are

fully aware of the System.

Instruments

The Member States may utilize the following instruments to develop cooperation projects and

programs in these policy issues.

COMCEC Project Cycle Management (PCM): Under the COMCEC PCM, the CCO provides

grants for the member states’ projects in each cooperation area of the COMCEC Strategy.

Accordingly, the member states may submit their project proposal in the particular policy areas

of this document. As a reminder, the CCO makes a project call each year in September.

Trade Working Group: The working group itself is another instrument that the member states

may benefit in developing cooperation programs and projects. During the working group

meetings, member states may exchange their views on issues pertaining to three policy issues

mentioned in this document and come up with specific recommendations and/or cooperation

projects to improve their implementation.

Capacity Building Programs: Capacity building programs may be organized in related to the

policy areas with the CCO’s resources and Member Countries’ own resources. Here, the CCO

would play a facilitating role through circulating the capacity building programs offers and

matching them with the other member states which expressed an interest to those offers.

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