BIMSTEC FTA set to kick off on schedule
Saturday, December 24 2005
Apart from a few issues that remain to be ironed out the seven-nation Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) regional grouping is all set to implement the Free Trade Agreement (FTA) among the member countries by July 2006 as scheduled.
The decision was made during the eighth ministerial meeting held in Dhaka, Bangladesh, on December 19 which also resolved to deepen economic integration by relaxing visa rules and enhancing cooperation in combating terrorism and trans-national crime among others.
The member countries which include Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand stressed on the need for timely implementation of free trade deal on trade in goods to increase intra-regional trade and investment. The free trade agreement will be signed at the trade and economic ministers’ meeting in Dhaka early next year.
The trade and industry minister, Lyonpo Yeshey Zimba, who led the Bhutanese delegation to the meet, said that as a small and landlocked country, regional groupings like BIMSTEC offered greater opportunities to attract foreign investment, a wider market for Bhutanese products, and an environment for rapid economic growth. “Promotion of investment and trade among the member countries would not only help accelerate socio-economic growth in the region but also bring harmony among the member states,” he said.
But first, according to the trade minister, Bhutan should develop the private sector within the country, increase the supply of goods and services and also improve on their quality to be able to reap the regional trade benefits. “If we want to develop trade we need to have something to sell,” he said.
The agreement on trade in goods, services and investment is expected to boost economic growth and strengthen the global bargaining power of the south and south-east Asian nations which is home to nearly 1.3 billion people.
Regional trade in South Asia at present accounted for less than six percent of the total trade in the region compared to 22 percent within the ASEAN free trade and 65 percent within EU.
Trade experts in the region project that once the trade liberalisation takes place under BIMSTEC FTA the volume of intra-regional trade will increase between US$ 40 to US$ 60 billion every year, thus “aspiring it to grow into a powerful economic community”.
In addition to the six areas of cooperation originally identified, the meeting also recognised public health, poverty alleviation, cultural cooperation, disaster management, and people-to-people contact as other priority areas where the seven countries could cooperate. “BIMSTEC is not all about trade and commerce but is much beyond, encompassing every aspect of socio-economic growth,” said Lyonpo Yeshey Zimba.
To realise the objectives of the free trade agreement, the meeting also recognised the need for provisions to avoid double taxation. An agreement was also reached to establish expert groups to address ICT and biotechnology, intellectual property rights issues and to recognise a permanent secretariat and Charter and Rules of Procedure for BIMSTEC.
Meanwhile, the Trade Negotiating Committee (TNC) of the grouping began a weeklong meeting in Kathmandu on December 21 to conclude negotiations on the FTA for trade in goods in the region so that the FTA could come into force as scheduled in July next year.
According to a member of the Bhutanese delegation, the negotiating committee has already worked out most of the issues, including rules of origin, sensitive lists and dispute settlement mechanism. “We look forward to an earlier conclusion of the negotiations for a comprehensive free trade area,” the official said.
BIMSTEC was established in 1997 to promote economic and trade relations between the nations in South Asia and South East Asia. Bhutan became a member in 2004.
By Karma Choden