IDB/OIC highlight importance of a preferential OIC trade system at historic WTO conference - IFN

IDB/OIC highlight importance of a preferential OIC trade system at historic WTO conference

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GLOBAL: At the consultative ministerial meeting of the OIC held in Bali this week, in advance of the 9th World Trade Organization (WTO) Ministerial Conference, IDB chairman Ahmad Mohamed Ali identified the importance of the swift implementation of a preferential trade system among OIC member states: including the reduction of customs tariffs between member states. “It is an urgent need risen out of successive global economic developments associated with economic globalization and its regional and international economic and trade consequences,” said Ahmad. His comments at the conference echo his speech at the recent COMCEC conference in Istanbul held last month, where he called on IDB member countries to increase intra-trade levels to 20% by 2015 as per the target set at the Islamic Conference Summit in 2005. Other leading figures have also urged for improved trade volumes between Islamic countries. At the OIC World Biz and OIC-Asia Trade & Economic Forum held in Kuala Lumpur in September 2013, the Malaysian prime minister Najib Abdul Razak called for a better understanding among OIC countries regarding opportunities to improve trade to meet the 2015 target. “There is a clear indication that the Muslim world is emerging as a new global target for international corporates,” said Najib. “With a population of about 1.6 billion, the Muslim market represents a high-level of economic power, population growth and propensity to consume.” Haji Phesal Haji Talib, the mayor of Kuala Lumpur, highlighted the need to escalate work on dismantling tariff and non-tariff barriers that are stalling growth in trade and investment. “There is huge potential for increasing the share of the intra-OIC trade to address the issues of poverty, low economic growth and investment in the member states provided the problems restricting interaction and cooperation between private sector of the member states are removed.” In a drive to improve OIC trade, Malaysia has opened several facilities in the Middle East including trade centers in Doha and Dubai. OIC countries accounted for 11.34% of total world trade in 2012, up from 10.8% in 2011. Intra-OIC trade stands at 18.21% with a total value of US$742.47 billion, up from US$681.6 billion in 2011 – an increase of 8.9%. According to the most recent data from the Islamic Center for the Development of Trade 2012-13 annual report, the UAE is the biggest player in the intra-OIC market, accounting for US$91 billion in 2011; followed by Turkey (US$69 billion), Saudi Arabia (US$64 billion), Iran (US$57 billion), Indonesia (US$50 billion), Malaysia (US$48 billion), Pakistan (US$30 billion), Iraq (US$29 billion), Syria and Egypt (US$24 billion each). These 10 countries represent 71.3% of total intra-OIC trade, according to the ICDT. Leading products include manufactured goods (31%), mineral fuels (25%), food products (17%) and machinery (13%). At the subsequent WTO Ministerial Conference which took place on the 5th-6th December, the organization also approved an historic global trade reform that analysts estimate could add US$1 trillion to the global economy including 20 million jobs in developing economies.