Dechen Dolkar 

Bhutan and Thailand launched Free Trade of Agreement (FTA) negotiations last week in Thimphu.

During the first negotiation round, the two governments finalised the structure and outline of the FTA, identified the various working groups, focal points, and agreed on a workplan for the negotiations.

The FTA aims to provide better market access and enhance bilateral trade and economic co-operation between the two countries. 

The director of the Department of Trade, Sonam Tshering Dorji, said that there were ten chapters the FTA that would create eight working groups between the two governments.

Sonam Tshering Dorji said that the second round of negotiations would begin in three months.

Every three months, FTA would have negotiations and different working groups meeting virtually. 

“We aim to complete all negotiations on the FTA within two years,” said Sonam Tshering Dorji.

Sonam Tshering Dorji said that one of the working groups would focus on products, with approximately 4,000 to 4,500 products proposed for export.

However, he said that there might be a small list of products that both sides will protect initially, but these will be liberalised after a few years.

Bhutan has more than 5,000 products tariff lines.

The next round of FTA negotiation meetings will be hosted by the Government of Thailand.

Trade between the two countries has grown steadily over the years with total trade in goods accounting for USD 23 million (Nu 1.7 billion) in 2023. 

Thailand was recorded as Bhutan’s fourth-largest trading partner in recent years.

Currently, Bhutan has a Free Trade Agreement with India. 

Additionally, Bhutan and Nepal have agreed on a Preferential Trade Agreement (PTA), which is almost finalised. Under the PTA, only selected items will be allowed for trade between the two countries.

Sonam Tshering Dorji said that around 85 to 90 percent of negotiation with Nepal have been completed. It is expected that the agreement between the two countries will be finalised soon.

He said that Bhutan had proposed around 200 products for market access.

Bhutan has a preferential trade agreement with Bangladesh in which Bhutan provides market access for 100 products and Bangladesh provides market access for 34 products.