Final talks on Bimstec FTA start today at Kathmandu |
The Trade Negotiating Committee (TNC) of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (Bimstec) begins a weeklong meeting in Kathmandu today to conclude negotiations on Free Trade Area (FTA) for Trade in Goods in the region.
Official sources said the TNC comprising experts from the seven member countries -- Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand -- has been instructed to finalise the Agreement on Trade in Goods so that the FTA could come into force as scheduled on July 1 next year.
The FTA in Bimstec region is having three components -- Trade in Goods, Trade in Services and Investment. The member states signed the protocol for the framework agreement on the FTA on February 8, 2004 in Phuket, Thailand.
Trade in Goods will be liberalised through progressive elimination of tariffs and non-tariff barriers. This will be done in two phases -- products will be identified as Fast Track and Normal Track categories.
For the Fast Track products, the non-LDCs (least developed countries) will eliminate tariffs for the LDCs by June 30, 2007, but among themselves by June 30, 2009. The LDCs will do so for the non-LDCs by June 30, 2011, but among themselves by June 30, 2009. Bangladesh, Bhutan, Myanmar and Nepal are the LDCs within Bimstec.
For the Normal Track products, the non-LDCs will eliminate tariffs for the LDCs by June 30, 2010, but among themselves by June 30, 2012. The LDCs will eliminate tariffs for the non-LDCs by 2017, but among themselves by June 30, 2015.
The trade liberalisation programme in goods is set to commence on July 1 next year. Agreements for Trade in Services and Investment will begin to come into effect from January 1, 2008.
If the TNC can conclude negotiations at its 10th meeting in Kathmandu from today, the FTA agreement for Trade in Goods will be signed at the Bimstec Trade Ministers' Meeting early next year.
Officials said the Bimstec Ministerial Meeting, which concluded in Dhaka on Monday, has given necessary directions to the TNC to show maximum flexibility to conclude the negotiations.
Sources said all the seven member states of Bimstec have stressed timely implementation of the FTA to boost intra-regional trade and investment and enhance economic efficiency and external competitiveness.
The TNC has already progressed a lot and finalised almost all the issues, including Rules of Origin, Sensitive Lists and Dispute Settlement Mechanism, paving the way for the Agreement on Trade in Goods to be effective as scheduled.
Bimstec provides a unique link between South Asia and Southeast Asia together having 1.3 billion people or 21 percent of the world population, a combined GDP of $750 billion and a considerable level of complementarity due to geographical contiguity, differing levels of development and resource endowments.
A top official of the Ministry of Foreign Affairs said a study conducted in 2004 shows the potential of $ 43 billion to $ 59 billion trade under the Bimstec FTA.
The name Bimstec evolved from its original formation 'Bangladesh, India, Sri Lanka, Thailand Economic Cooperation' (BIST-EC) established on June 6, 1997 at the meeting of the foreign ministers of the four countries in Bangkok.
Later, Myanmar joined the sub-regional grouping as a full member at a Special Ministerial Meeting in Bangkok on December 22, 1997. The name of the grouping was consequently changed to 'Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation' (BIMST-EC).
Nepal was first granted observer status by the second Ministerial Meeting in Dhaka in December 1998. At the 6th Ministerial meeting in Phuket February 2004, Bhutan and Nepal became new members. The First BIMST-EC Summit was held in Bangkok on July 31, 2004. In view of the admission of Nepal and Bhutan, the name of the grouping was changed to 'Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation' (Bimstec).