Trade liberalisation under BIMSTEC Free Trade Area soon

The negotiations on the seven-nation Bay of Bengal Initiative for Multi Sectoral Economic Cooperation (BIMSTEC) Free Trade Area has almost finalised the trade liberalisation program under the BIMSTEC Free Trade Area.

Member countries expect to implement the agreement once the pending issues such as the Rules Of Origin, criteria and the negative lists are finalised. In this regard member countries should finalise specific issues such as the domestic value addition, regional cumulation and product specific rules, said a Commerce Department official.

Trade liberalisation under the BIMSTEC FTA will be implemented in two stages, which includes the normal and fast track. Specific preferences will be given to Least Developed Countries (LDCs) Bangladesh, Bhutan, Myanmar and Nepal under the agreement.

The trade liberalisation under the FTA will be completed within 11 years of implementing the agreement.

The Trade Negotiating Committee (TNC) set up under the BIMSTEC has already had 12 rounds of negotiations, the last one was held in Colombo in July. The primary focus of these discussions was on the Free Trade Area on trade in goods.

Negotiations on Trade in Services and Investment also commenced during the latter part of 2005. According to the Commerce Department official the TNC during its meetings held so far has achieved substantial progress in finalising the draft text of the agreement on the FTA on Trade in Goods, Draft text on the Agreement on Cooperation and Mutual Assistance in customs matters and the Agreement on Dispute settlement procedures and Mechanisms.

BIMSTEC member countries agreed to establish the BIMSTEC Free Trade Area Framework Agreement to stimulate trade and investment within the countries and attract outsiders to trade with and invest in the BIMSTEC region. TNC's negotiation area covers trade in goods, services and investment.

It was agreed that negotiation on trade in goods would be focused after which the TNC would proceed with negotiation on trade in services and investment.

As for the Agreement on Trade in Goods, Working Groups have been set up to discuss and draft text on Rules of Origin (WG-RoO) and the Working Group on the Dispute Settlement Mechanism (WG-DSM) and customs cooperation. These Working Groups would have their meetings back to back or parallel with the TNC meetings.

On, June 6, 1997, a new sub-regional grouping was formed in Bangkok and given the name BIST-EC (Bangladesh, India, Sri Lanka, Thailand Economic Cooperation). Myanmar attended the inaugural June Meeting as an observer and joined the organisation as a full member at a Special Ministerial Meeting held in Bangkok on, December 22, 1997, upon which the name of the grouping was changed to BIMST-EC Declaration on the Admittance of Myanmar as a Member, December 1997.

Nepal was granted observer status by the second Ministerial Meeting in Dhaka in December 1998. Subsequently, full membership was granted to Nepal and Bhutan in 2003. During the First Summit in Bangkok on July 31, 2004, the grouping's name was eventually changed to the 'Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation', or BIMSTEC.

The agreement on trade in goods, services and investment is expected to boost economic growth and strengthen the global bargaining power of the southern Asian region, home to nearly 1.3 billion people, with a combined GDP of US$750 billion (Euro 650 billion).

The deal has the potential of creating intra-regional trade between US$40 billion to $60 billion (Euro 35 billion to Euro 50 billion), officials said.

BIMSTEC's objectives stretch from creation of economic and social prosperity based on equality, to enhancement of mutual benefits in economic, social and technological aspects. They also include intra-regional assistance in the form of training, research and development as well as beneficial cooperation in the areas of agriculture, industry, expansion of trade and investment, improvement in communication and transport, to improve living standards and cooperation with other international organisations.

SG