Bimstec was created mainly due to the initiative of Thailand, first mooted in 1992-93 in its quest for westward regional association beyond Myanmar. This initiative of ‘Look West’ by Thailand was reinforced by India’s ‘Look East’ policy, a cornerstone in India’s foreign policy since the early 1990s, motivated by the imperative of economics and postcold war strategic considerations. Given the slow progress of Saarc and failure to promote sub-regionalism in South Asia, Bimstec appeared to be a more promising alternative, particularly since it afforded an opportunity to link up India’s Northeast with Southeast Asia. The two smaller neighbours of Saarc which were also in search of extra-regional identity joined Bims-tec. Thus this grouping has aptly been described as a bridge and a unique link between South and Southeast Asia bringing together 1.3 billion people with 21% of the world population and a combined GDP of $750 billion. The multi-faceted nature of this grouping is also characterised by its multi-cultural and multi-sectoral approach to regional cooperation.
Unlike Saarc, (but similar to Asean),the scope for cooperation under Framework Agreement on the Bimstec Free Trade Area (BFTA) is more extensive, going beyond trade in goods to bring in trade-in-services and investment promotion. Further, the negotiating mechanism for goods under BFTA is based on negative list approach while Saarc adopted a product-by-product( positivelist ) approach under South Asian Preferential Arrangement (Sapta) and it was not until the launching of a South Asian Free Trade Agreement (Safta) in January 2006 that a negative list negotiating mechanism was put into practice. Bimstec further provides for an early harvest fast track mechanism for goods negotiation which is absent under Safta.
The aims and purposes of Bimstec are to create an enabling environment for rapid economic development, accelerate social progress and promote active collaboration and mutual assistance of matters of mutual concern to each other. Bimstec covers almost all areas of cooperation extending to 13 priority sectors including trade & investment, tourism, technology, fisheries, energy,transportation & communication, agriculture, and cultural cooperation.The first six priority sectors of cooperation were identified at the second ministerial meeting in Dhaka in 1998. After the eighth ministerial meeting in Dhaka on December 18-19,2005,a number of new areas of cooperation emerged. The number of priority sectors of cooperation increased from six to 13.These new sectors were discussed in the first Bimstec summit and there have been various activities to enhance that cooperation ever since.A framework agreement on the Bimstec Free Trade Area (BFTA) was signed on February 8, 2004 at the sixth ministerial meet. Bangladesh later joined the agreement on June 25, 2004. The agreement adopted a negative list approach under which all products,except those in the negative list would be subject to tariff reduction or elimination.
BFTA provides for both normal and fasttrack approaches to trade liberalisation with differential treatment for developing (India, Sri Lanka and Thailand) and least developed countries(Bangladesh,Bhutan,Myanmar and Nepal). Trade liberalisation in goods was planned from July 1,2006. Even though the Trade Negotiations Committee (TNC) has held 17 meetings for the BFTA in goods so far, target set for the implementation of the agreement has been missed by more than two years owing to unresolved differences among the contracting parties with respect to the size of the negative lists, setting criteria for rules of origin and a mechanism for dispute settlement. The TNC in its 15th meeting held in Dhaka on September 24-26, 2007, explored the possibility reaching a consensus on “negative list of 15% of total HS lines and rules of origin criterion with 35% (30% for LDCs) plus change of tariff sub-heading.
Owing to a failure to reach any consensus, the second Bimstec summit held in New Delhi from November 11-12, 2008, in its declaration could merely “take note with satisfaction of the progress made on the negotiations on trade in goods with agreed general rules of origin and product specific rules under the ‘Bimstec Free Trade Area’ and “directed the Bimstec TNC to conclude the negotiations on trade in goods as soon as possible, and to continue its efforts for agreements on services and investments.” Currently, intra-Bimstec trade as a share in world trade is quite modest. However, it is noteworthy that even in the absence of any preferential trading,its share in world trade has more than doubled from 2.20% in 1991 to 5.46%in 2007.
The second Bimstec summit was however successful in reaching a number of agreements that provides for an institutional arrangement to promote some of its objectives. It could finalise the “Bimstec Convention on combating international terrorism, transnational organised crime and illicit drug trafficking.” The leaders also finalised agreements on promoting exchanges in three more areas—weather, energy and culture. In order to accelerate cooperation in these areas, it was decided to set up Bimstec weather and climate and energy centres in India, and Bimstec cultural industries commission and cultural industries observatory in Bhutan.
The decision of the tenth ministerial meeting to set up tourism working group as also a joint working group to consider all aspects of setting up of a Bimstec secretariat could not be included in the declaration. It merely announced an agreement to establish an institutional structure to act as a focal point for working out the modalities for setting up of a permanent secretariat for Bimstec.
Optimal transport linkages are necessary for achieving efficient levels of connectivity amongst member states to promote movement of goods and people. In this regard the declaration acknowledged the Bimstec Transport Infrastructure and Logistics Study (BTILS) conducted by ADB as an important first step in identifying the constraints and how to overcome them. It is now time for the member states to take prompt action on them.