BIMSTEC FTA: Dhaka differs with Delhi over rules of origin

Syful Islam | Published: October 17, 2018 09:42:17 | Updated: November 04, 2018 21:35:06

Bangladesh and India flags are seen cross-pinned in this photo symbolising friendship between the two nations — Collected

Bangladesh has largely differed with India's proposal for the value addition requirement for 22 more products under the proposed BIMSTEC free trade area (FTA) agreement, officials said.

The disagreement came as Dhaka found that the proposed change in rules of origin (RoO) will cause lose of competitiveness by Bangladeshi exporters.

The ministry of commerce (MoC) at a meeting last week took the decision following India's plea to bring changes in product specific rules under the FTA.

Officials, who attended the meeting, said the trade negotiation committee of the free trade initiative in its 19th meeting in February 2011 had finalised the product rules for 147 items with consent from all members.

However, India in the 20th meeting in September 2015 argued that as much time has elapsed since finalising the product rules, there is a need for revisiting it.

Following that India nearly two years after that meeting placed its new proposal on product rules of 147 goods where it suggested an enhanced value addition for 22 more items.

In the new proposal, India suggested value addition ranging from 20 per cent to 45 per cent apart from the method of tariff heading change.

The next negotiation meeting, according to trade officials, will be held in Dhaka soon where steps will be taken for finalising the product rules.

Officials said during the last week's meeting at the ministry of commerce, chaired by additional secretary Shafiqul Islam, a representative of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said scopes are there to enhance woven goods export to the BIMSTEC member states if rules of origin criteria are made favourable.

The representative of the state-run Export Promotion Bureau (EPB) said if the value addition requirement for seven, out of 22 products, remains unchanged Bangladesh will be able to export those items.

But Bangladeshi exporters will lose exporting capability of those items if Indian proposal of head change+40 per cent is accepted, he said.

The meeting decided that in most cases Bangladesh will push for keeping the previous decision of value addition requirement unchanged instead of agreeing with the Indian new proposal.

Besides, in case of a couple of items the meeting decided that the value addition criteria should be synchronised with the Asia-Pacific Trade Agreement (APTA) and SAARC Preferential Trading Arrangement (SAPTA).

Now the ministry of commerce will inform its position regarding the product rules to the BIMSTEC secretariat through the ministry of foreign affairs, a senior trade official said.

Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand are member states of BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation).

The BIMSTEC FTA aims to enhance trade and investments among the member states for which a framework agreement was signed in February 2004.

The BIMSTEC nations have a population of some 1.5 billion people, or 22 per cent of the global population. The countries within the bloc have been able to sustain an average growth rate of 6.5 per cent in the recent years. The region has a gross domestic product (GDP) of US$ 2.7 trillion.


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