South Asian bloc to ease visa rules

Bimstec grouping agrees to open more services under trade pact

BIMSTEC countries "" the economic grouping of Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand "" have committed to reduce visa restrictions for business travellers besides agreeing to open more services under the Free Trade Agreement (FTA).

Under the agreement, business travellers can look forward to a system like the Business Entry Card in Asean countries. The number of visas issued would also be increased, but the possibility of visa-free travel had not been discussed so far, officials said.

The framework agreement, signed last weekend, also proposes to increase co-operation among the countries by reducing Customs formalities and extending support in trade finance and e-commerce.

The countries have agreed to reduce tariffs from July 1, 2006. The terms of the FTA will be worked out in the coming months. While negotiations on tariff reduction and the dispute settlement mechanism are to be completed by December 2005, the framework agreement has set a deadline of 2007 for working out the details of co-operation in services and investments.

A bulk of the issues, such as rules of origin, treatment of out-of-quota rates, non-tariff barriers and safeguard measures, have only been identified and negotiations on them will start later in the year. These issues have posed major hurdles in the negotiations of bilateral FTAs with Thailand and Singapore.

The framework agreement has identified the establishment of effective trade and investment facilitating measures as a major component of the FTA.

Although India has opposed the inclusion of trade facilitation and investment agreements in the multilateral framework under the World Trade Organisation (WTO), officials have clarified that the BIMSTEC FTA is only aimed at improving the investment and trading climate in the region.

On services, the countries have proposed to go beyond their existing commitments under the WTO General Agreement on Trade in Services (Gats). They have also committed to eliminate discriminatory practices governing services, while deciding against imposing new measures.

The framework agreement has laid down that there will be an investment promotion and protection agreement, while steps will be initiated to progressively liberalise the investment regime through a positive list approach.

This will mean that sectoral investment ceilings will be reviewed, based on requests from member countries.

Friendly neighbourhood

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• Co-operation among Bimstec countries to be increased by reducing Customs formalities and extending support in trade finance and e-commerce
• Under the visa agreement, business travellers can look forward to a system like the Business Entry Card in Asean countries
• A deadline of 2007 set for working out the details of co-operation in services and investments
• Negotiations on tariff reduction and the dispute settlement mechanism are to be completed by December 2005