Background : 

As stipulated in the Bangkok Declaration of 1997, one of the major objectives of BIMSTEC is to create an enabling environment for rapid economic development in the region. In BIMSTEC's early days, promotion of intra-regional trade and investment dominated the activities of the organization. A robust institutional mechanism comprising Trade/Economic Ministerial Meeting (TEMM), Senior Trade/Economic Officials' Meeting (STEOM), and Trade Negotiating Committee (TNC) Meeting together with its various Working Groups was put in place to pursue trade and investment related cooperation among Member States. Side by side, BIMSTEC Business Forum (BBF) and BIMSTEC Economic Forum [BEF) were established to allow private sector inputs in BIMSTEC's trade and investment related activities.

BIMSTEC's economic cooperation agenda saw a major breakthrough with the signing of the Framework Agreement on BIMSTEC Free Trade Area on 08 February 2004, which envisioned liberalization, promotion and facilitation of trade in goods and services, investments as well as broader economic cooperation. The BIMSTEC Trade Negotiating Committee (TNC) was also set up with the task of negotiating the constituent agreements of the BIMSTEC FTA.

Institutional Mechanism of the Sector: Trade, Investment and Development Sector of BIMSTEC has a well-defined institutional mechanism to carry out its function. 
 

BIMSTEC Free Trade Area (FTA):

The Framework Agreement on the BIMSTEC Free Trade Area was signed in Phuket, Thailand on 08 February 2004 and came into force on 30 June 2004. Article 2 of the Framework Agreement outlines the following areas to be covered by the “Comprehensive Free Trade Area (FTA)”:

• Progressive elimination of tariffs and non-tariff barriers in substantially all trade in goods
• Progressive liberalization of trade in services with substantial sectoral coverage
• Establishing an open and competitive investment regime that facilitates and promotes investment within the BIMSTEC FTA
• Establishing effective trade and investment facilitating measures, including, but not limited to, simplification of customs procedures and development of mutual recognition arrangements
• Establishing appropriate mechanisms for implementation of the Agreement

Constituent Agreements of BIMSTEC FTA:

The BIMSTEC Trade Negotiating Committee (TNC) was set up with the task of negotiating the constituent agreements of the BIMSTEC FTA. TNC has several working groups under which it is mandated to negotiate the constituent agreements of BIMSTEC FTA. Following agreements are now currently under negotiation:

• Agreement on Trade in Goods of the Framework Agreement on the BIMSTEC Free Trade Area: The text of the agreement has been finalized. However, its annexures including the Rules for Determination of Origin of Goods for Agreement on BIMSTEC FTA and Operational Certification Procedures for the Rules of Origin for the BIMSTEC FTA is currently under negotiation by the Working Group on Rules of Origin. Significant progress has been made to finalize the text of the annexures;
• Agreement on Cooperation and Mutual Assistance in Customs Matters for the BIMSTEC Free Trade Area: This agreement is currently under negotiation by the Working Group on Customs Cooperation. Significant progress has been made to finalize the text of the Agreement;
• Agreement on Dispute Settlement Procedures and Mechanism of the Framework Agreement on the BIMSTEC Free Trade Area: Working Group on  Legal Experts has negotiated and finalized the draft text of this Agreement;
  Agreement on Trade in Services of the Framework Agreement on the BIMSTEC Free Trade Area: 08 rounds of negotiations have already been held by the Working Group on Trade in Services. The negotiation on the Draft text of the Agreement is at an initial stage;
• Agreement on Investment of the Framework Agreement on the BIMSTEC Free Trade Area: 08 rounds of negotiations have already been held by the Working Group on Investment. The negotiation on the Draft text of the Agreement is at an initial stage;
• Agreement on Trade Facilitation for the Framework Agreement on the BIMSTEC Free Trade Area: 02 rounds of negotiations have already been held by the Working Group on Trade Facilitation. Significant progress has been made to finalize the draft text of the agreement;
• [2nd] Protocol to amend the Framework Agreement on the BIMSTEC Free Trade Area: The draft text of the 2nd Protocol is ready;

Private Sector Engagements:

BIMSTEC Business Forum (BBF): The BBF was formed by the representatives of private sector of BIMSTEC Member States in March 1998 to enhance private sector cooperation among the Member States of the BIMSTEC region in identified sectors, sub-sectors and projects. BBF held seven (7) meetings between 2003 and 2016, the last meeting held in New Delhi, India on 21 July 2016. The 8th BBF is proposed to be held in Dhaka, Bangladesh.

BIMSTEC Economic Forum (BEF): The BEF was formed in 1998 to promote Government-Private sector cooperation among the Member States. BEF held 06 (six) meetings between 1998 and 2011 and the last meeting was held in Bangkok, Thailand on 24 February 2011. The 7th BEF is proposed to be held in Dhaka, Bangladesh.

Other activities/ Publications:

• In December 2022, Asian Development Bank (ADB), in collaboration with the BIMSTEC Secretariat has published the e-version of the report titled “BIMSTEC Trade Facilitation Strategic Framework 2030”.
• The Indian Council for Research on International Economic Relations (ICRIER), New Delhi in collaboration with ADB and Ministry of External Affairs, Govt. of India hosted the First “Trade Facilitation Capacity Building Programme” in India from 7 to 20 May 2023.
• BIMSTEC Business Conclave & Expo was organized by the Ministry of External Affairs, Govt. of India and Indian Chamber of Commerce (ICC) on 13-15 June 2023 at Kolkata.

Sub Sector: Blue Economy

The inclusion of Blue Economy as the sub-sector of Trade, Investment and Development Sector of BIMSTEC led by Bangladesh has been approved by the 19th BIMSTEC Ministerial Meeting held on 09 March 2023. The Inter-Governmental Expert Group to develop an Action Plan on Blue Economy has been proposed by Bangladesh and Member States have been requested to nominate representatives for the expert group.

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