A free trade agreement (FTA) among the BIMSTEC countries may be signed this year, a top official of the regional grouping said on Tuesday.
The BIMSTEC, which stands for the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, was launched in 1997 with the objective of forging greater trade connectivity between the South Asian and Southeast Asian nations.
The next trade negotiation committee (TNC) meeting will be held in Bhutan next month.
The regional grouping expects to ink the trade in goods agreement under the BIMSTEC FTA framework after that meeting, secretary-general of the BIMSTEC M Shahidul Islam told the FE.
He also said there is a consensus on most issues of the trade pact.
However, according to the BIMSTEC officials, minor disagreement over the modalities of the Rules of Origin remains as a sticking point in the agreement.
The BIMSTEC countries have agreed that some 35 per cent local value addition will be needed to fix up the Rules of Origin and for the LDCs the value addition should be 30 per cent.
But Nepal wants to fix the local value addition rate for LDCs at 25 per cent.
Asked, Mr Islam said Nepal did not agree on the 30 per cent rate in the Dhaka meeting.
He expressed the hope that in the upcoming meeting, Kathmandu will agree on the issue of local value addition with other countries.
He said the member countries have already agreed that 147 products will be under product-specific Rules of Origin.
"They have proposed replacing the 2007 HS code with the 2017 HS code. And before placing their final list the member countries can bring about changes in the list, but that should not be more than 10 per cent," he added.
In total, 5,052 products have been included in the FTA, of which 23 per cent will be in the negative list.
And duty on the rest of the products will be eliminated or reduced by phases under the preferential trade, the BIMSTEC secretary general said.
According to the preferential trade modalities, some 10 per cent products of the preferential trade list will be under fast-track elimination and 48 per cent will be under the normal track elimination.
Mr Islam noted that though the FTA launch was one of the main objectives of the initiative, it could not be launched till date due to the lack of organisational activities since its birth in 1997.
"The BIMSTEC had no secretariat until 2014 and it was a major hurdle to gearing up the activities," he argued.
In recent years, the BIMSTEC has emerged as an active organisation with a flurry of events taking place in the seven nation grouping.
It groups Bangladesh, Bhutan, India, Nepal, Myanmar, Sri Lanka and Thailand.
The Goa retreat of the BIMSTEC leaders in 2017, and the Kathmandu Summit held last year, injected fresh momentum as the top leaders of the member countries vowed to move forward the agenda of the organisation.
"The meeting of the BIMSTEC home ministers, and cultural and tourism ministers will take place this year. Myanmar will host the meeting of the committee on agriculture this month," Mr Islam said, citing how the organisation has became vibrant in recent years.
Responding to a question, he said the Rohingya issue did not pose any threat to the consensus building process as both Myanmar and Bangladesh have shown their commitment to carrying forward the activities of the grouping.