National Council (NC) passed the Paris Agreement on Climate Change and the Trade, Commerce and Transit Agreement between Bhutan and India on May 12.

Both the agreements were passed by National Assembly last year. NC will  now submit the agreements to the Druk Gyalpo for Royal Assent.

Presenting the Paris Agreement in NC, Agriculture Minister Yeshey Dorji explained to the house of review the benefits and obligations of the agreement.

He said Bhutan is a leader in climate change initiatives and that it was important for the country to ratify the agreement.

Lyonpo Yeshey Dorji said Bhutan is highly vulnerable to the adverse impact of climate change because of its fragile mountainous landscapes and a high dependence on agriculture.

The country’s hydropower sector, he added, is also vulnerable. The agreement was adopted on December 12, 2015.

The agreement outlines frameworks for global actions to address climate change after 2020.

The objective of the agreement is to maintain the increase in global temperatures below 2 degrees Celsius above pre-industrial levels, while making efforts to limit the increase to 1.5 degrees.

The agreement addresses adaptation to climate change, financial and other support for developing countries, technology transfer and capacity building, as well as loss and damage.

After NC endorsed the Paris Agreement, Economic Affairs Minister Lekey Dorji introduced the Indo-Bhutan Trade, Commerce and Transit Agreement.

Lyonpo Lekey Dorji highlighted some of the salient features and expected benefits of the agreement. “Ratification of the agreement will benefit both Bhutan and India,” he said.

Economic affairs minister and the minister of state for Indian commerce and industry, Nirmala Sitharaman, signed the agreement on November 12 in Thimphu.

The bilateral trade agreement expired in July last year  but the validity had extended with effect from July 29, 2016, for a period of one year or till the new agreement came into force.

A new Article has been added to the revised agreement. The new article requires the completion of internal ratification procedures of both countries for the agreement to come into force.

The revised agreement states that both India and Bhutan should undertake measures to ensure proper documentation of trade data, and exchange them periodically. The two sides will also put in mechanisms to reconcile those data at regular intervals.

The agreement also states that both countries will not impose the prohibition on the export of essential food items to the other country, provided they meet reasonable end user requirements.

The agreement allows free trade regime between the two countries. The agreement also allows duty-free transit of Bhutanese merchandise for trade with third countries. Additional exit/entry points for Bhutan’s trade with other countries is also allowed.

The bilateral trade agreement expired in July. But the validity was extended with effect from July 29, 2016, for a period of one year or till the new agreement comes into force.

The agreement was renewed on July 29, 2006, for a period of ten years.

The first Agreement on Trade and Commerce between Bhutan and India was signed in 1972. Since then, the agreement has been renewed four times.

MB Subba