BIMSTEC members fail to strike trade deal by Dec
Tuesday, 1 January 2008
A Z M Anas
Members of BIMSTEC have failed to wrap up negotiations on a free trade deal by December as the latest round of talks, slated for November 12-16, was postponed.
At the behest of Dhaka, the 16th meeting of trade negotiating committee (TNC) under the regional block, due to be held in India, was put off until early 2008. BIMSTEC (Bay of Bengal Initiative for Multi-sectoral Technical & Economic Cooperation) groups Bangladesh, Myanmar, India, Sri Lanka, Thailand, Nepal and Bhutan.
"We've asked for deferment of the 16th TNC meeting, which was due to be held in mid-November in India, for some practical reasons," a commerce ministry official said.
"The TNC meeting will now be held sometime in January or February, although the specific date is yet to be fixed. But the delay should not have any negative impact on the implementation of the proposed free trade pact," the official added.
Commerce ministry officials said although negotiations are getting protracted, the entire process is on right track and the last meeting ended with "some breakthrough."
They, however, noted that product coverage of negative list, principle of reciprocity, rules of origin and distribution of products over the normal track elimination and the normal track reduction are among the issues that hold up further headway in BIMSTEC FTA talks.
On the rules of origin, all members have already agreed for a simultaneous application of CTH (Change of Tariff Heading at the four-digit harmonised system level) plus value addition, with derogation to CTSH (Change in Tariff sub-heading at six-digit HS level) on an agreed list of items, they pointed out.
But members of the regional block failed to thrash out a consensus on the percentage of value addition in the 15th TNC meeting held in September in Dhaka.
India and Sri Lanka proposed 35 per cent value addition for developing members while 30 per cent for least developed countries (LDCs). LDCs also sought for Product Specific Rules on some items of their export interest of value additions of 25 per cent, trade envoys involved in the talks said.
The BIMSTEC Framework Agreement on FTA was inked 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 2006, the whole process got stuck, understandably in the wake of political changes in Thailand and Bangladesh.
The FTA under the BIMSTEC is to be implemented in two phases under the original scheme of things, with the block's poorer members -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.
Members of BIMSTEC have failed to wrap up negotiations on a free trade deal by December as the latest round of talks, slated for November 12-16, was postponed.
At the behest of Dhaka, the 16th meeting of trade negotiating committee (TNC) under the regional block, due to be held in India, was put off until early 2008. BIMSTEC (Bay of Bengal Initiative for Multi-sectoral Technical & Economic Cooperation) groups Bangladesh, Myanmar, India, Sri Lanka, Thailand, Nepal and Bhutan.
"We've asked for deferment of the 16th TNC meeting, which was due to be held in mid-November in India, for some practical reasons," a commerce ministry official said.
"The TNC meeting will now be held sometime in January or February, although the specific date is yet to be fixed. But the delay should not have any negative impact on the implementation of the proposed free trade pact," the official added.
Commerce ministry officials said although negotiations are getting protracted, the entire process is on right track and the last meeting ended with "some breakthrough."
They, however, noted that product coverage of negative list, principle of reciprocity, rules of origin and distribution of products over the normal track elimination and the normal track reduction are among the issues that hold up further headway in BIMSTEC FTA talks.
On the rules of origin, all members have already agreed for a simultaneous application of CTH (Change of Tariff Heading at the four-digit harmonised system level) plus value addition, with derogation to CTSH (Change in Tariff sub-heading at six-digit HS level) on an agreed list of items, they pointed out.
But members of the regional block failed to thrash out a consensus on the percentage of value addition in the 15th TNC meeting held in September in Dhaka.
India and Sri Lanka proposed 35 per cent value addition for developing members while 30 per cent for least developed countries (LDCs). LDCs also sought for Product Specific Rules on some items of their export interest of value additions of 25 per cent, trade envoys involved in the talks said.
The BIMSTEC Framework Agreement on FTA was inked 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 2006, the whole process got stuck, understandably in the wake of political changes in Thailand and Bangladesh.
The FTA under the BIMSTEC is to be implemented in two phases under the original scheme of things, with the block's poorer members -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.