The five founding nations of BIMSTEC (Bangladesh, India, Myanmar, Sri Lanka and Thailand – Economic Cooperation) were expected to sign the draft deal at a ceremony later on Sunday, leaving new members Bhutan and Nepal to join later.
But Bangladesh withdrew on Saturday after demanding compensation for any revenue lost as a result of throwing open its markets.
Faced with the prospect of only four of the seven BIMSTEC members signing up to the deal, the Thai hosts considered postponing the ceremony to a summit planned for July when it hoped more nations would be ready to join.
However, Thai foreign ministry spokesman Sihasak Phuangketkeow said after a meeting of the group’s foreign ministers there Nepal and Bhutan had saved the day by making quick decisions to sign up to the agreement.
“They (Bangladesh) don’t see the issue of compensation as something that can’t be resolved… there are quite a few ways of dealing with the concerns of Bangladesh”
“Six countries will be signing with the exception of Bangladesh,” he told reporters. “In the end, (the ministers) decided that if they didn’t sign it after having already announced it, it would send out the wrong signal.”
Sihasak said Bangladesh had wrongly thought that because a BIMSTEC summit originally planned for Monday was postponed several weeks ago, the signing of the free trade deal would also be delayed.
“Maybe that issue of compensation could have been cleared up in time if they had not been under the impression that the signing would be postponed until the summit,” he said.
“They don’t see the issue of compensation as something that can’t be resolved… there are quite a few ways of dealing with the concerns of Bangladesh.”
Under the deal, BIMSTEC’s more developed members India, Sri
Lanka and Thailand will commit to abolish tariffs by 2012, while the less developed members will have another five-year grace period.
Tariffs will begin to be reduced in mid-2006, with products designated for “fast track” treatment to be traded on a zero-tariff basis by mid-2009 for the three developed members and by mid-2011 for the poorer members.