ISLAMIC CHAMBERS OF COMMERCE,
INDUSTRY & AGRICULTURE (ICCIA)
16th Private Sector Meeting
in Sharjah – UAE on 19-20 March 2014
BENEFITS OF TRADE PREFERENTIAL
SYSTEM TPS-OIC
FOR THE PROMOTION OF INTRAISLAMIC TRADE
Impact of the TPS-OIC on the
economies of OIC Member States
and The Legal Implications of the
TPS-OIC
BY Dr. AbdelGadir Warsama Ghalib
Senior Legal Advisor & Professor of Law
American University
Bahrain
Organization of Islamic Countries
OIC
ISLAMIC POPULATION ALMOST
CONSTITITES AROUND 25% OF THE
WORLD.
ISLAM IS IN EVERY PART OF THE
WORLD AND IS GROWING FASTLY
AND MUSLIMS NEED TO BE UNITED.
OIC IS AN EXAMPLE OF UNITY.
ISLAMIC CONCEPTS
ISLAMIC CONCEPTS CALL \ GUIDE FOR
UNITY & COOPERATION AMONG
MUSLIMS.
THERE ARE CLEAR DIRECTIVES TO THIS
EFFECT IN THE HOLY QURAN & HADITH
NABAWI.
TRADE IS AN IMPORTANT ELEMENT TO
ACHIEVE UNITY AMONG MUSLIMS.
IN THIS CONNECTION CERTAIN ACTIONS WERE
TAKEN
The trade preferential system among
TPS-OIC – is a good example
TPS-OIC is one of the projects of COMCEC
(Standing Committee for Economic and
Commercial Cooperation of the Org of
Islamic Cooperation)
The objective of the TPS-OIC is to promote
the intra-OIC trade through exchange of trade
preferences among the Member States of
OIC.
AGREEMENT ON TRADE
PREFERENTIAL SYSTEM
-
-
Promotion of trade among OIC Member States through the
exchange of trade preferences on the basis of the following
principles:
- Ensuring equal & non-discriminatory treatment among all
participating states.
Securing mutuality of advantage3s to all participating states to
enable all to benefit equally from the Trade Preferential System.
Enabling participation of groups composed of Member states only,
which may participate in trade negotiations by a unified
representation.
The exchanged preferences not to be limited to tariffs but are to be
progressively extended to para-tariff concessions.
Extending trade preferences to all commodities including
agricultural and animal products, manufactured or semimanufactured products.
AGREEMENT ON TRADE
PREFERENTIAL SYATEM
-
-
Taking in consideration differences in the levels of economic
development among Contracting States in granting special treatment.
Submitting to periodical reviews and sustained evaluation of the Trade
Preferential System m with a view to extending its implementation and
improving its provisions in the light of the experience acquired and
results obtained.
Making use of the trade financing & export credit insurance facilities
provided by OIC institutions, in conformity with their rules for the
products exchanged under the agreement.
This agreement shall not prejudice any legal obligations of Participating
States vis-à-vis third parties.
Tariff, para-tariff and non-tariff preferences applicable within existing &
future sub-regional, regional &n inter-regional groupings to which OIC
Member States belong shall retain their essential character, and thier
shall be no obligation on the members of such groupings to extend, nor
the right of other Participating States to enjoy the benefits of such
preferences.
NEGOTIAATIONS RULES
MOST FAVORED NATION TREATMENT (MFN)
BASIS.
THERE ARE EXCEPTIONS IF ANY COUNTRY
WANTS TO WITHDRAW THE CONCESSIONS
GIVEN --- CERTAIN PROCEDURE TO BE
FOLLOWED.
SPECIAL TREATMENT FOR LEAST DEVELOPED
MEMBER STATES
NEGOTIATIONS
COMPONENTS OF NEGOTIATIONS TO COVER:
1- Tariff, para-tariff and non-tariff concessions
2- Arrangements compatible with the
international obligations of the Participating
States concerning direct trade measures
including medium and long-term contracts for
exports & imports of specific products or
covering sectoral agreements may be considered
in subsequent stages depending on
developments and according to need.
What are the contents \ framework of the
trade preferential system agreement ?
The framework agreement on TPS-OIC is the
basic legal document of the TPS-OIC.
This agreement sets up the general principles
towards establishing a preferential system,
such as the general rules of the registrations,
the scope of the goods coverage etc.
The agreement entered into force in 2002 after
(10) OIC Member States ratified the agreement.
Main contents of the Agreement:
Among the main features of the Agreement
are The Most Favored Nation Principle, Equal
treatment of member states, Special
treatment for Least Developed Member
States.
It allows the Regional Economic Groups which
consist of only OIC Member States (GCC) to
participate in TPS-OIC trade negotiations with a
unified representation (What about COMESA?)
What is the scope of the Preferential System
envisaged by the Framework Agreement?
The Preferential System outlined in the
agreement covers all commodity groups,
including agricultural products. It extends its
limits, besides tariffs, on para-tariff & nontariff barriers.
The Preferential System would be revised and
further developed in time in the light of the
needs and experiences gained.
What is required from member states, is it
signing or ratifying the agreement ?
Signing is the first step for a country in
the way of adopting the Agreement.
An official of a Member Country,
specifically authorized for signing the
Agreement, could sign the Agreement.
The original copy of the Agreement is
placed at the OIC General Secretariat, in
Jeddah, Saudi Arabia.
RATIFICATION
After signing the Agreement comes
the ratification process, which is
more complex and time consuming
than the first step & depends on the
internal procedure of each country
for the ratification, such as approval
by the Parliament, by the Cabinet,
by the President….
Cont.
The ratifying country is to
send its instrument of
ratification, i.e. the document
proving the ratification to the
General Secretariat of the OIC
in Jeddah.
What is the difference between signature &
ratification in law (Public International Law) ?
• Signature of the agreement means
being party to the agreement.
However, ratification means
accepting the signed agreement and
such acceptance makes the
agreement as part of the law of the
country. It becomes a law.
What is the status of your country?
Do you know ?
List of all Member States is available at the
General Secretariat of OIC in Jeddah.
You could easily check to know all details
regarding membership of your country.
If, you country is not a member, you need to
work hard for membership.
COMCEC & TNC
• Following the entry into force of the Framework
Agreement, the COMCEC (Standing Committee for
Economic and Commercial Cooperation of the
Organization of Islamic Cooperation) - the platform
for Islamic world (UMMAH) cooperation in economic
& commercial aspects.) established the TNC (trade
negotiating committee) in 2003. The Member States
of the TNC are the OIC Member States that have
signed & ratified the Framework Agreement. The
main function of the TNC is to undertake negotiations
for achieving the objectives of the Framework
Agreement i.e. an operating trade preferential system
among its members.
What kind of institutional structure do the
TPS-OIC trade negotiations have ?
The COMCEC is the supervisory body for the
implementation of the Framework Agreement,
which equips it with final decision-making
power in this regard.
It is responsible, inter alia, for establishing the TNC
and constituting the TNCs internal rules adopting
the outcome of the negotiations and launching
rounds of trade negotiations. The TNC , on behalf
of COMCEC, works to implement the objectives of
the agreement and reports to the COMCEC.
Who can join the TPS-OIC trade
negotiations ?
Any OIC member Country wishing to join
negotiations, first, has to sign & ratify the
Framework Agreement and submit the
instrument of ratification to the General
Secretariat of the OIC. In doing so, it becomes a
member country of the TNC.
Second, it must sign the PRETAS, which shall
constitute the theme of the negotiations in the
second round, due to annexes and other issues
related to its implementation.
TPS-OIC Versus WTO
What are the differences between this
agreement TPS-OIC & the WTO agreements ?
WTO, is a worldwide agreement to promote trade.
Due to the differences of opinion between the
Developed States & the Undeveloped States, WTO
took very long time to conclude.
However, such grave differences may not be the
same among OIC Member States and this could be
taken as an advantage .
OIC Member States must benefit from the good &
bad results that came out from WTO deliberations.
TPS-OIC
The 2nd round of trade negotiations for
establishing the TPS-OIC was conducted
between 2006 & 2007. The Rules of Origin ,
the outcome of the 2nd round was adopted by
COMCEC and presented to the signature and
ratification of the members of the TNC.
RULES OF ORIGIN
RULES OF ORIGIN lays down the rules for determining the
origin of products eligible for preferential concessions
under the Framework Agreement and PRETAS.
-
RULES OF ORIGIN INCLUDE:
ORIGINATING PRODUCTS
WHOLLY PRODUCTS OR OBTAINED
NOT WHOLLY PRODUCTS OR OBTAINED
CUMULATING RULES OF ORIGIN
DIRECT CONSIGNMENT
Treatment of packing
Certificate of origin
SAFEGUARD MEASURES
-
A Participating State shall be able to take safeguard
measures to ward off serious prejudice or threats of a
serious prejudice, which may arise as a direct
consequence of unforeseen substantial rise of
imports enjoying preferences under this agreement.
Prejudices may be caused by:
Threats of prejudice to domestic products
Serious deterioration in the balance of payments.
Dumping applied by the exporting country
Export subsidies applied by the exporting country.
SHARIAA RULES
As a rule:
Products prohibited by virtue of the Islamic
Shariaa shall not be covered by trade
negotiations.
SETTLEMENT OF DISPUTES
As per Article (15) of the agreement:
Any dispute that may arise among participating States regarding
the interpretation and application of the provisions of this
agreement or any instrument adopted within its framework shall
be amicably settled by agreement between the parties concerned.
In the event of failure to settle a dispute, it may be referred to the
Trade Negotiating Committee by a party to the dispute. The
Committee shall review the matter and make recommendation in
accordance with the appropriate rules which it will set for this
purpose.
I BELIEVE THIS IS NOT ENOUGH & MUST BE REVIEWED.
THE DISPUTE SAHLL BE REFERRED TO DUBAI ISLAMIC CENTER FOR
ARBITRATION WHICH IS AN IDB ORGANIZATION…
OTHER AGREEMENTS
GENERAL AGREEMENT FOR ECONOMIC,
TECHNICAL AND COMMERCIAL
COOPERATION AMONG MEMBER STATES OF
THE ISLAMIC CONFERENCE
POINT FOR CONSIDERATION REGARDING
THIS AGREEMENT:
TO BE REVISED WITH THE AIM OF GIVING
MORE SPECIFIC NECESSARY DETAILS
OTHER AGREEMENTS
AGREEMENT FOR PROMOTION, PROTECTION
AND GUARANTEE OF INVESTMENTS AMING
MEMBER STATES OF THE ORGANIZATIONOF THE
ISLAMIC CONFERENCE
POINT FOR CONSIDERATION REGARDING THIS
AGREEMENT:
ARBITRATION RULES TO BE REVIEWD TO REFER
TO DUBAI ISLAMIC ARBITRATION CENTER
OTHER AGREEMENTS
AVIATION SECTOR
METROLOGY , STANDARDS & SPECIFICATINS
THERE ARE MANY OTHER ISSUES NEED TO BE
COVERED SUCH AS BANKING & FINANCIAL
SERVICES, ENVIRONMENT ISSUES, CULTURAL
ISSUES……..
THANKS
READY FOR YOUR QUESTIONS
For contacts:
Dr. AbdelGadir Warsama Ghalib
Email: awghalib@hotmail.com
Twitter:@1awg