TOWARDS OIC ECONOMIC COOPERATION: IMPACT OF DEVELOPING 8 (D-8) PREFERENTIAL TRADE AGREEMENT

 Corresponding author. 
 School of Economics, Faculty of Economics and Business, National University of 
Malaysia, 46000 BANGI, Malaysia 
MUSTAFA ACAR 
 Department of Economics, Kirikkale University and Aksaray University, 68100 Aksaray, 
Turkey 
YAGHOOB JAFARI 
 School of Economics, Faculty of Economics and Business, National University of 
Malaysia, 46000 BANGI, Malaysia 
Published: 14 May 2013 
The Developing 8 (D-8) comprises of eight developing countries (Turkey, Malaysia, 
Indonesia, Bangladesh, Pakistan, Iran, Egypt and Nigeria), all of which are OIC members 
with large Muslim populations. The D-8 has formed a freer trade alliance with the objectives 
to create new opportunities and enhance intra-trade relations while providing better standards 
of living for its citizens. This paper examines the trade impact of possible trade liberalization 
among the D-8 countries using a multi-country computable general equilibrium model, i.e., 
GTAP. Results indicate that while the D-8 intra-trade is expected to increase very 
substantially, not all member countries will experience a welfare gain under a free trade 
arrangement. Likewise, the impact on economic sectors differs substantially across countries. 
Keywords: Developing 8; organization of Islamic countries; trade liberalization; preferential 
trade arrangement; economic integration; GTAP 
JEL: F15, F17, F13