TPS-OIC: Where Are We now? COMCEC COORDINATION OFFICE

PresentatIon outlIne What is the TPS-OIC? Timeline of the TPS-OIC Negotiations Basic Features of the System Current Status The way forward

What IS THE TPS-OIC? The most important project of the COMCEC in the field of trade. Basis for the trade liberalization efforts under the COMCEC. Based on three agreements: The Framework Agreement, The Protocol on Preferential Tariff Scheme (PRETAS) and The Rules of Origin. The idea for establishing a trade preferential System among the Member States dates back to late 1980’s. The negotiations were held under the Trade Negotiating Committee, established and supervised by the COMCEC. TNC Secretariat: COMCEC Coordination Office and ICDT The required number of the Member Countries for making the System operational was reached in 2014.

tImelIne of THE TPS-OIC NegotIatIons 1988: COMCEC adopted the basic principles (Declaration of Intent) that should guide the efforts for the establishment of a trade preferential system 1990: The Framework Agreement was adopted by the COMCEC, and presented to the signature and ratification by the Member States. 2002: The required number of 10 ratifying states for the entry into force of the Framework Agreement was reached. 2003: Ministerial declaration of the COMCEC for the launching of the First Round of TPS- OIC Negotiations. 2004-2005: First Round of Negotiations (Antalya round, 4 meetings) producing the Preferential Tariffs Scheme (PRETAS)

tImelIne of TPS-OIC NegotIatIons (CONt’D) 2006: Ministerial Declaration for the launching of the Second Round of Negotiations. 2006-2007: Second Round of Trade negotiations (Ankara Round, 4 meetings) producing the TPS-OIC Rules of Origin. 2007: Ministerial Declaration for submitting the Rules of Origin for signing and ratification, and adopting the date of January 1st, 2009 for the operationalization of the System. 2010: The required number of 10 ratifying states for the entry into force of the PRETAS was reached. 2011: The required number of 10 ratifying states for the entry into force of the Rules of Origin was reached. 2014: The required number of at least 10 member states that have both ratified all the three agreements and submitted their concessions lists was reached.

BasIc features of the system The Framework Agreement: The Framework Agreement sets up the general principles towards establishing a preferential system. The Agreement includes: - The Most Favored Nation principle, - Equal treatment of member states, - Special treatment for Least Developed Member States, - Allowing regional economic groups, which consist of only OIC Member Sates, to participate in TPSOIC trade negotiations with a unified representation - Envisages consultations and settlement mechanism for diputes arising from the implementation of the agreement .

BasIc features of the system PRETAS: PRETAS deals with reducing the tariffs of the covered products under the Scheme as well as para-tariff and non-tariff barriers. The base date for tariff reduction is October 1st, 2003. Least developed countries and countries facing extraordinary situations were given 3 years of grace period. Tariff reduction part of the PRETAS consists of normal and fast track reductions.

BasIc features of the system PRETAS: Under normal track: For any country, product coverage is 7% of all TLs with a tariff > 10% If at least 90% of TLs of the country has a tariff <10%, coverage is 1% For the 7% coverage, reduction will be: - > 25% will be reduced to 25% - 15-25 will be reduced to 15% - 10-15 will be reduced to 10% Reductions will be made in 4 annual installments (6 for LDCs) Concession lists will be conveyed to TNC Secretariat in 3 months upon the entry into force of the agreement

BasIc features of the system PRETAS: Under the fast-track: Fast-track covers all products other than those in the negative list A country’s negative list may include: - 25% of TLs + TLs with < 10% TR, if ATR is > 20% - 20% of TLs + TLs with < 10% TR, if ATR is 15-20% - 15% of TLs + TLs with < 10% TR, if ATR is < 15% - 30% of TLs for LDCs Reduction rate: Application of margin of preference on current MFN applied rate which will be increased to 50% in 5 installments (7 for LDCs) For LDC products increasing the margin of preference will be made in 3 installments Product coverage or tariff concessions may be increased later (end of 5th year or earlier)

BasIc features of the system THE RULES OF ORIGIN: The Rules of Origin lays down the rules for determining the origin of products eligible for preferential concessions under the Framework Agreement and PRETAS.

RATIFICATION / LIST OF CONCESSION TABLE (As of January 2015) CURRENT STATUS RATIFICATION / LIST OF CONCESSION TABLE (As of January 2015) Ratifying Member Countries Member Countries that have submitted concession lists Ratifying Member Countries which have not submitted concession lists Bahrain Somalia Bangladesh Palestine Jordan Iran Kuwait Gambia Malaysia Morocco   Oman Qatar Pakistan S. Arabia Turkey UAE [Syria]*  [Syria]* 16 12 4

THE WAY FORWARD The 30th Session of the COMCEC held in 25-28 November 2014, in İstanbul; “ Welcomed and applauded, on the occasion of the 30th Anniversary of the COMCEC, the announcement of Kuwait on its ratification of the PRETAS and the Rules of Origin and thus the finalization of the requirements for the operationalization of the TPS-OIC System and requested the Trade Negotiating Committee (TNC) to consider convening its session in 2015. ” “ also requested the TNC Secretariat to circulate the concessions lists among the participating states of the TPS-OIC” .

THE WAY FORWARD The TNC Secretariat will ask the relevant participating states to revise parts of their concessions lists that do not comply with the sample format (i.e. if the tariff lines are not 8-digits, or if the annual tariff reductions are not specified) The TNC Secretariat will also ask all the participating states to update their 2003- based tariff lines (there will be a seperate presentation on this issue tomorrow morning) After receiving the updated lists, the TNC Secretariat will circulate the lists among the participating states Accordingly, the TNC would be convened.

THE WAY FORWARD Other necessary preparations for the operationalization of the TPS-OIC. For PRETAS: Completing the necessary national procedures for incorporating the concessions into national system (import regime) For Rules of Origin: Determining the competent authority for issuing the TPS-OIC Certificate of Origin, Providing the TNC Secretariat with a sample of certificate of origin as well as with specimen impression of stamps of the competent authority for the issue of certificate of origin Publishing guidelines and organizing training seminars for relevant actors

THE WAY FORWARD All the relevant information and documents regarding the TPS-OIC system are available at our website: www.comcec.org For any questions, please contact: kakdogan@comcec.org aokur@comcec.org

THANK YOU…