BIMSTEC agrees on negative list, value addition criteria

BIMSTEC agrees on negative list, value addition criteria
eKantipur.com, 28-Sep-2007

Trade negotiators from seven BIMSTEC member countries have agreed on value addition conditions and downsizing of the negative list in Dhaka, bringing the free trade agreement on trade in goods close to conclusion.

Value addition and negative list were the two most contested issues and the delay in reaching a consensus in those had been delaying finalization of the accord. Nepal, India, Bangladesh, Bhutan, Sri Lanka, Thailand and Myanmar are members of BIMSTEC.

"In a bid to render free trade successful, trade negotiators agreed to downsize the negative list to 15 percent from 25 percent," said a Commerce Ministry official.

Talking to the Post, he elaborated that the consensus was reached as a middle path to the Thailand's proposal of reducing it to 10 percent and other members' proposal to maintain it at 20.

With the agreement, the BIMSTEC free trade agreement on goods would now have only 15 percent of the total 5,226 tariff lines in the negative list. That means, free trade rules will not be applicable to 784 tariff lines that the members would enlist in the negative list.

The 15th TNC meeting also agreed on 35 percent value additional requirement for products by developing members and 30 percent for the least developed country members to enjoy market access under free trade rules in the bloc.

The agreement was reached by compromising on the proposals that the LDCs and Thailand, and other developing members had pushed for. Thailand and the LDCs had pushed for a 30 percent value addition criteria while the other developing members 40 percent for accepting the products as originating from the developing members.

However, no such compromise was made on value addition criteria for LDCs. The LDCs had demanded that they be allowed to enjoy the facility with at least 25 percent value addition.

The meeting also finalized the modalities for tariff cut, under which LDCs would be required to reduce their tariff in a span of ten years and the developing countries would need to do that within 3 years for LDCs and 5 years for other developing members.

"Except for a few issues, the free trade accord for trade in goods is almost final," said the official. He added that the TNC would meet next in New Delhi on November 12-15 to finalize the issues agreed upon.

Officials said that they were optimistic of the New Delhi meeting finalizing the accord and forwarding it to the higher body for its official endorsement in the Summit. The BIMSTEC Summit has been scheduled for February 2008.