BD to seek transit deal for 10 yrs with Bhutan

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FE Report Bangladesh in its proposed draft recommendation to Bhutan will seek transit deal for a period of 10 years with a provision to extend the agreement on mutual consensus, a high trade official said. "Bangladesh will propose ten years' duration for a transit agreement with Bhutan which will be extendable," a high official of the ministry of commerce told the FE Sunday. Bangladesh and Bhutan will have a secretary-level meeting scheduled to start on March 20 next in the capital to discuss in details the draft recommendation of transit deal aiming to finalise the issue as early as possible. The official said that the two countries, in the upcoming meeting, will not only concentrate on transit rather they will also discuss trade and payment issues. At present Bhutan enjoys duty free market access of nearly 18 products to Bangladesh. The landlocked Kingdom will be seeking to get duty free market access of 17 more products to Bangladesh. On the other hand, Bangladesh will request Bhutan to withdraw duty on mango, lichi and apple juices being produced locally for export to Bhutan. The high-level meeting between Bangladesh and Bhutan will be held at the ministry of commerce (MoC). Commerce Secretary Mahbub Ahmed will lead the Bangladesh delegation while the 10-member Bhutanese team will be led by Secretary of the Ministry of Economic Affairs. Bhutan and Bangladesh's export/import currently takes place through two land customs (LC) stations-Burimari which is approximately 400 kms away from the south-eastern town of Samdrup Jongkhar and Tamabil, a route which passes through the Indian states of Assam and Meghalaya. Bangladesh and Bhutan had signed a temporary transit deal in 1980, which expired in 2000. The government of Bhutan has requested Bangladesh to renew the deal. Bhutan is interested to use seaports and airports in Bangladesh along with five additional land customs (LC) stations under the proposed protocol on transit. Bangladesh had sent the draft recommendations on transit to Bhutan through the ministry of foreign affairs (MoFA) on the day, the official said. The volume of trade between Bhutan and Bangladesh during the fiscal year (FY) 2010-2011 was worth US$ 22.12 million. Bhutan exported goods worth $ 19 million, while Bangladesh exported only $ 3.12 million worth of goods to Bhutan during the year. Earlier, an inter-ministerial meeting held at the MoC on Sunday discussed the transit and trade issues with Bhutan. An official assigned to prepare the draft papers told the FE that it is unlikely that the transit deal will be signed during the upcoming meeting. He said that if Bhutan raises their observations on the proposed draft then it will take some time to finalise the agreement. Earlier, Prime Minister Sheikh Hasina had given her approval to the ministry of commerce (MoC) to go ahead with talks over transit with Bhutan as the landlocked country wants to use Bangladesh territory to facilitate easy and expeditious movement of its goods, official sources said. "We received the Prime Minister's approval last week to start negotiations with Bhutan on providing it with transit facility," a senior MoC official told the FE. The official said the draft on transit deal is being prepared in line with the report of the Core Committee on Transit that was submitted to the Prime Minister's Office (PMO) in January last year. "Once the transit deal with Bhutan is signed, it will pave the way for inking such agreements with India and Nepal which are also willing to use Bangladesh territory including its ports," he added. According to the draft deal, once signed, it would facilitate movement of goods through the respective territories of the contracting parties and provide all necessary facilities for traffic-in-transit through the territories. The deal-signing countries will be able to charge levies to cover all fixed and variable costs emerging from transit including fees for determining weight, scanning and sealing by customs officials, user-fees for roads, railways and waterways, tolls for roads, bridges, tunnels, river ports, seaports, airports and surcharges for congestion and environmental degradation and emission. India is also seeking transit and transshipment facilities through the Bangladesh territory to carry cargoes to its 'seven sister' -- states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. Nepal is also interested in getting transit and transshipment facility to carry out its external trade activities. The report of the 'core committee on transit and transshipment' kept both the options -- transit and transshipment -- open for the neighbouring countries. It has identified nine road routes, nine rail routes and five waterways for providing transit facilities to them. According to the core committee's estimate, around US$ 6.33 billion in investment is required to make the routes operational for carrying transit cargoes, which may take three to four years for completion.