BIMSTEC members still divided

BIMSTEC members still divided
eKantipur.com, 29-Jun-07

Despite earlier understanding, seven member countries of South-Southeast Asian economic bloc including Nepal stand wide apart on value addition condition and negative list for free trade within the bloc.

The differences surfaced after Thailand, contrary to previous understanding, pushed for 30 percent flat value addition condition for all at the 14th meeting of BIMSTEC Trade Negotiating Committee, said a participant of the meeting.

Previously, all members had agreed for different rate of value addition for developing and LDC members -- 35 percent for developing countries and lower for LDCs.

While developing countries -- India, Thailand, Sri Lanka and Myanmar -- had pushed for 30 percent value addition for LDCs, LDCs including Nepal, Bangladesh and Bhutan, were seeking to fix it at 25 percent.

Senior officials from BIMSTEC member countries, who met in Thimpu last week, also failed to converge on volume of items to be listed under the negative list.

Nepal and other South Asian members stood firm on their position to retain 20 percent of total tradable items into the negative list. "Thailand, on the other hand, demanded that it be brought down at 10 percent," said the source. Negative list would include items on which tariff would not be reduced.

Likewise, they failed to reach consensus on safeguard measures.

"Consensus on issues such as customs cooperation and trade facilitation was reached," said the source. The officials decided to meet next in Dhaka from September 24 to 26 to iron out differences. They also agreed to continue negotiations on agreement for services and investment side by side of trade in goods from the next meeting.

BIMSTEC ratified framework agreement for FTA in trade in goods and trade in services and investment in February 2004.

However, failing to finalize the agreement, it missed the agreed date of enforcement of FTA on commodity trade in July 2006.

Given the pace of negotiations, it is further set to miss the date of enforcing FTA on trade in services and investment in July 2007. Under the broader principles, BIMSTEC members have agreed to trade goods under the 'fast track' and 'normal track' of trade liberalization.

Under the fast track, members would bring down the tariffs in the range of zero to 5 percent by June 2009 for developing countries and June 2011 for least developed countries. In the case of normal track, they will follow a gradual tariff liberalization programs.

The developing countries will have to comply with it by June 2010 for each other and 2012 for least developed members. While for LDC members, the compliance deadline is July 2017 for developing countries and June 30, 2015 for each other.