Kathmandu, September 30:

Senior trade officials of seven-member Bay of Bengal Initiative for Multi-sectoral Trade and Economic Cooperation (BIMSTEC) have come up with a draft proposal based

on consensus to ink free trade area agreement.

With the package drafted comprising common issues of BIMSTEC member countries, intra regional free trade agreement (FTA) on trade in goods has come closer to a conclusion, after the governments of the member states endorse it.

“Earlier each member country used to take their issues for the meeting, but this time the meeting of trade negotiation committee (TNC) drafted a package putting together common issues of all and forwarded back to the governments of the respective countries for approval,” said Rabi Bhattarai, under secretary at the ministry of industry, commerce and supplies (MoICS), who led the Nepali delegation in the 15th TNC meeting held in Dhaka from September 24 to 26.

The package proposes to downsize the negative list and value addition issue, which have been two most contested issues and major reason behind delay in reaching a consensus to finalise the FTA.

In rules of origin issue, the package has proposed 30 per cent value additional requirement for products by the least developed countries (LDCs) and 35 per cent for developing members. “The member countries have almost finalised the issue of rules of origin,” Bhattarai said.

Although the issue of negative list is still dubious, the meeting agreed to downsize the list to 15 per cent from 25 to 30 per cent, he said, adding that the consensus was reached as a middle path to Thailand’s proposal of reducing it to 10 per cent and other members’ proposal to maintain it at 20. Nepal had proposed 30 per cent of the total 5,226 tariff lines in the negative list.

If the governments of member states approve the package, the BIMSTEC FTA on goods would now have only 15 per cent of the total 5,226 tariff lines in the negative list. This means, free trade rules will not be applicable to 784 tariff lines that the members would enlist in the negative list.

In the transit related issues, Thailand agreed to provide transit for member countries under its domestic law, which LDC members including Nepal and others objected and asked to provide transit facility under regional FTA pact, said Bhattarai.

The meeting also finalised the modalities for tariff cut, under which LDCs would be required to reduce their tariff in a span of 10 years and the developing countries would need to do that within three years.

“This meeting has made significant breakthrough for drafting the accord for trade in goods. We are hopeful that the next meeting on November 12-16, in India will make push it more closer,” Bhattarai said.

Nepal, India, Bangladesh, Bhutan, Sri Lanka, Thailand and Myanmar are members

of BIMSTEC.