OIC edges towards free trade area
Reuters
OIC edges towards free trade area
PUTRAJAYA (June 21 2005): Muslim nations moved closer to forming a free trade area (FTA) on Monday, with plans to adopt tariff-cutting steps by end-2005 to bridge a gap between oil-rich and poor members of the Organisation of the Islamic Conference. "This is an important first step towards the larger goal of greater economic integration among the OIC countries," the group’s chairman, Malaysian Prime Minister Abdullah Ahmad Badawi, told an OIC trade forum.
One of the biggest challenges facing the grouping of Muslim nations is the vast economic disparities among its 57 members, Abdullah told the forum in Malaysia’s administrative capital.
Abdullah said OIC countries were negotiating to establish a preferential trading system to boost trade with each other.
"The protocol is expected to be finalised in November," Malaysian Trade Minister Rafidah Aziz said. "The negotiations are now regarding tariff reduction modalities and implementation period. It will cover 7 pct of total tariff lines."
OIC nations account for just 8 percent of global trade, and trade within the bloc amounts to 13 percent of the grouping’s total trade, she said.
"There’s a three-staged lowering of tariffs," Rafidah added, describing the OIC measures. "Increasingly, we will be offering market access duty-free to each other in the longer-term."
Morocco urged the OIC to use the trade pact as the basis for a free trade area.
"It is imperative to establish a free trade area among member states in the short term," said Rahmouni Houcine, deputy director-general of the Islamic Centre for Development of Trade based in Morocco, adding that it could be set up within 10 years.
"Efforts should focus on creating a favourable environment to liberalise trade among the OIC countries that is consistent with the new international economic and trade order," he added.
Fourteen countries have signed and ratified the trade framework agreement. They are Malaysia, Indonesia, Iran, Bangladesh, Turkey, Lebanon, Tunisia, Libya, Egypt, Cameroon, Pakistan, Guinea, Uganda and Jordan.
This week Malaysia is hosting the annual meeting of the OIC’s financial arm, the Islamic Development Bank.
IDB officials have said the meeting may approve the creation of an international Islamic trade financing firm, with an initial paid-up capital of $1 billion, to spur intra-IDB trade.
Malaysia also wants the IDB to launch a $10 billion Islamic bond fund for infrastructure in another effort to help close the gap between rich and poor Muslim nations.
Other issues to be considered are the admission of a new member, Nigeria, and the election of the IDB president. The present chief, Ahmad Ali, completes his five-year term this year.
About 2,400 people, including finance ministers, central bank chiefs and Islamic bankers and government officials, will attend the meeting, held in Malaysia for the first time since 1978.
