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BIMST-EC
Date : 23 Jul 2004
Location : New Delhi
The initiative to establish Bangladesh, India, Sri Lanka, Thailand Economic Cooperation (BIST-EC) was taken by Thailand in 1994 to explore economic cooperation on a sub-regional basis involving contiguous countries of South East & South Asia grouped around the Bay of Bengal. Myanmar was admitted in December 1997 and the initiative was renamed as BIMST-EC. The initiative involves 3 members of SAARC (India, Bangladesh & Sri Lanka) and 2 members of ASEAN (Thailand & Myanmar). BIMST-EC is visualised as a ‘bridging link’ between two major regional groupings i.e., ASEAN and SAARC. BIMST-EC is an important element in India’s "Look East" strategy and adds a new dimension to India’s economic cooperation with South East Asian countries.
The first meeting of Economic/Trade Ministers of BIMST-EC which was held in Bangkok in August 1998 imparted a new dimension to economic cooperation between the member states. It was agreed that BIMST-EC should aim and strive to develop into a Free Trade Agreement and should focus on activities that facilitate trade, increase investment and promote technical cooperation among member countries. It was further reiterated that BIMST-EC activities should be designed to form a bridge linking ASEAN and SAARC. Six areas were identified for cooperation, namely, trade & investment, technology, transportation & communication, energy, tourism and fisheries.
At the 4th BIMST-EC Trade & Economic Ministers Meeting held in Colombo on 7th March, 2003, the Ministers also decided to appoint a Group of Experts (GOE) for drafting the Framework Agreement of BIMST-EC Free Trade Area (FTA).
Accordingly, the GOE prepared the text of the draft Framework Agreement on BIMST-EC FTA which was considered at the Fourth Senior Trade and Economic Officials Meeting (STEOM) held in Bangkok on 14-15 January, 2004. The Framework Agreement on the BIMST-EC FTA was signed on 8th February, 2004 in Phuket, Thailand by Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand during the fifth BIMST-EC Economic Ministers’ Meeting. Bhutan and Nepal who joined BIMST-EC as new members also signed the Framework Agreement. The Bangladesh side participated in the GOE all along for drafting the Framework Agreement, but did not sign the Framework Agreement. Bangladesh has expressed its willingness to join the negotiations on FTA by signing a "Protocol on the admission of Bangladesh to the Framework Agreement on BIMST-EC Free Trade Area". The Framework Agreement includes provision for negotiations on FTA in goods, services and investment. The major highlights of the Framework Agreement are as follows:
FTA in Goods
The negotiations for tariff reduction/elimination for FTA in goods shall commence in July 2004 and be concluded by December 2005.
Fast Track: Products listed in the Fast Track by a Party on its own accord shall have their respective applied MFN tariff rates gradually reduced/eliminated in accordance with specified rates to be mutually agreed by the Parties, within the following timeframe:
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Countries |
For developing country parties |
For LDC parties |
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India, Sri Lanka and Thailand |
1 July 2006 to 30 June 2009 |
1 July 2006 to 30 June 2007 |
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Bhutan, Myanmar and Nepal |
1 July 2006 to 30 June 2011 |
1 July 2006 to 30 June 2009 |
Normal Track: Products listed in the Normal Track by a Party on its own accord shall have their respective applied MFN tariff rates gradually reduced/eliminated in accordance with specified rates to be mutually agreed by the Parties, within the following timeframe:
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Countries |
For developing country parties |
For LDC parties |
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India, Sri Lanka and Thailand |
1 July 2007 to 30 June 2012 |
1 July 2007 to 30 June 2010 |
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Bhutan, Myanmar and Nepal |
1 July 2007 to 30 June 2017 |
1 July 2007 to 30 June 2015 |
FTA in Services and Investments
For trade in services and trade in investments, the negotiations on the respective Agreements shall commence in 2005 and be concluded by 2007.
The identification, liberalisation etc., of the sectors of services / investments shall be finalised for implementation subsequently in accordance with the timeframes to be mutually agreed; (a) taking into account the sensitive sectors of the Parties; and (b) with special and differential treatment and flexibility for the LDC Parties.
Trade Negotiating Committee:
The Thai side has proposed that the First Meeting of the Trade Negotiating Committee (TNC) of BIMST-EC FTA may be held in July 2004 prior to the First BIMST-EC Summit and has also submitted the draft Terms of Reference for the TNC. India has also forwarded her comments on the draft Terms of Reference for the TNC.
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