Stalled BIMSTEC free trade talks resume with an optimistic note

FE Team | Published: September 25, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
As negotiators from the BIMSTEC region gathered Monday in the city to salvage the stalled free trade talks, Bangladesh suggested that negotiations on dismantling barriers to trade should be concluded by December this year.
"We're already behind the schedule by one and a half years â€¦ So, extra efforts are needed to wind up negotiations by December to launch the BIMSTEC free trade agreement," commerce secretary Feroz Ahmed said after opening the meeting of 15th trade negotiating committee (TNC) in the city.
The Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation Framework Agreement on FTA was signed on February 8, 2004 and Bangladesh entered the deal on June 25, 2004. The agreement provides for negotiations on trade in goods, services and investment.
Although negotiations were supposed to be wrapped up in July last year, the whole process got stuck, understandably in the wake of political changes in both Thailand and Bangladesh.
But the resumption of trade negotiations reflects the commitment of the regional leaders to infuse new momentum into the move, officials said.
Talking to reporters at his office, Feroz Ahmed noted that members of the Bangkok-based block should benefit from the global trend in putting in place regional trading arrangement without undermining the multilateral trading system. The BIMSTEC groups Bangladesh, Myanmar, India, Sri Lanka, Thailand, Nepal and Bhutan.
"The need for signing the free trade deal cannot be underestimated. I think, it's (BIMSTEC) a bridge between the ASEAN and the SAARC. Two large economies namely India and Thailand are also involved in the process," he pointed out.
"For mutual benefits, seven member countries should move forward to signing the regional free trade pact," he added.
The commerce secretary, however, acknowledged the issues of downsizing the negative list of products and determination of rules of origin could be the stickiest points in the talks.
"The size of the negative list remains undetermined. Thailand wants it to be 10 per cent of the total tariff line while Bangladeshi negotiators have a mandate of 24 per cent. It's upto the negotiators of India, Sri Lanka and Bangladesh whether they agree to a deep cut in tariff line," Ahmed told this correspondent, calling it the "major dispute." "There's a difference of opinion between New Delhi and Bangkok on rules of origin."
Manel de Silva, the leader of the Sri Lankan delegation, is chairing the meeting that will continue until Thursday.
Sri Lanka is participating in TNC meet as the chairperson and Bangladesh as the chairperson of the sub-group of the rules of origin.
The FTA under the BIMSTEC is to be implemented in two phases under the original scheme of things, with the least developed countries (LDCs) - Bangladesh, Myanmar, Nepal and Bhutan - getting the benefit of a grace period in both phases.
Under the fast track, India, Sri Lanka and Thailand were scheduled to reduce duties on identified items between July 1, 2006-June 30, 2009 for developing countries and July 1, 2006-June 30, 2009 for the LDC countries.
Bangladesh, Myanmar, Bhutan and Nepal will have to reduce duties for goods under the fast track by June 30, 2011 for developing countries and June 30, 2009 for LDC members.
The time-frame for tariff elimination for India, Sri Lanka and Thailand for products under the normal track was scheduled for the period between July 1, 2007 and June 30, 2012 for developing countries and until June 30, 2010 for the LDCs.
BIMSTEC provides a unique link between South Asia and Southeast Asia, bringing together 1.3 billion people - 21 per cent of the world population, a combined GDP of US$750 billion, and a considerable amount of complementarities.
According to a study, if operational, the BIMSTEC FTA will help boost regional trade estimated between US$ 43 billion and $59 billion a year.