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BIMSTEC, SAFTA unlikely to meet July 1 deadline

New Age

BIMSTEC, SAFTA unlikely to meet July 1 deadline

Monday March 20 2006

Nazmul Ahsan

The member countries of the BIMSTEC and South Asian Free Trade Area may not be able to meet the July 1 deadline for implementation of the pact mainly due to different degrees of opposition from Thailand, India and Sri Lanka, trade negotiators of the government have told New Age.

According to the latest development, negotiators from the member countries of Bay of Bengal Initiative for Multi-Sectoral Technical Economic Cooperation free-trade area in their last meeting held on March 10 to 12 in New Delhi failed to reach a consensus on the criteria of rules of origin under the pact.

Differences between India and Thailand over finalising the percentage of value addition under the rules of origin criteria led to the failure of the meeting styled ‘sub-group meeting on rules of origin,’ sources said.

Syed Golam Kibria, first secretary of the National Board of Revenue, represented Bangladesh at the sub-group meeting.

The sources said Thailand was in favour of a 30 per cent value addition for developing member countries while India opposed the proposal fearing a possible invasion of its market by Thai products.

India lobbied for a 40 per cent value addition under the rules of origin criteria for developing member countries, but the Thai negotiators opposed the move, the sources added.

Bangladesh, Nepal, Bhutan and Myanmar proposed a 25 per cent value addition, which did not receive the required attention from the developing members as they were busy setting down their own issues of value addition, the sources said.

The positions of the member countries had been the same during the 11th meeting of the trade negotiating committee, which was held on February 6-11 in Bangkok.

The group will sit again in mid-April in Chennai, India, for narrowing differences on the issue, sources said.

‘We could not make any headway and progress to minimise differences between India and Thailand,’ a high official in the commerce ministry told New Age.

Besides the tangle of the ROO, Thailand expressed its reservation about attending the concluding meeting of the TNC, which is supposes to take place at the end of April in Colombo.

‘As the national election in Thailand is nearing, the incumbent government of Thailand is unlikely to take any crucial decision relating to the implementation of the BIMSTEC FTA before June, 2006,’ a trade negotiator of the government told New Age.

‘Without any political settlement in that country, the Thai government would not go for any deal,’ another negotiator observed. According to the framework agreement of the BIMSTEC free-trade area, negotiations were supposed to be completed by December, 2005 to make the agreement operational on July 1 this year.

Member countries of the pact need at least two to three months to complete the internal procedures for implementation of trade agreements under BIMSTEC or SAFTA.

The procedures include issuing regulatory orders, gazette notification and customs complaints after negotiations are completed, sources said.

The BIMSTEC framework agreement, which groups Bangladesh, India, Bhutan, Myanmar, Nepal, Sri Lanka and Thailand, was signed in February, 2004. Bangladesh signed the agreement on June 25, 2004.

As far as SAFTA is concerned, uncertainties loom over its implementation from July 1, 2006 as Sri Lanka is yet to ratify the pact, sources said.

The ratification is needed to be approved by the Sri Lankan parliament as the new government took over power in that country recently.

The meeting of the trade ministers of SAFTA member countries, which is scheduled to take place in mid- April in Dhaka, has become uncertain because of the delay in its ratification by Sri Lanka, sources said.

Bangladesh, India, Pakistan, Sri Lanka, Nepal, Bhutan and Maldives are the members of the South Asian Free Trade Area.

 source: New Age