Six Asian nations led by India and Thailand agreed on Sunday to create a free trade zone encompassing nearly two billion people, but Bangladesh held out over compensation issues.
Ministers from India, Myanmar, Sri Lanka and Thailand signed a deal aimed at boosting investment and lowering costs in a free-trade zone by 2017.
Regional minnows Bhutan and Nepal, the newest members of the economic grouping of South and Southeast Asian nations, also agreed to join.
Bangladesh, which fears lower tariffs may hurt its manufacturing, said it would sign later after compensation issues were sorted out and cabinet approved the agreement.
"Our point was in the South Asian Free Trade Agreement, we have that issue (compensation) already accepted by most of the members. We wanted to follow the same pattern," Bangladeshi Foreign Affairs Minister Morshed Khan told Reuters.
The compensation idea got little support from other countries, but they agreed to work to solve the problem before the leaders of the seven nations meet in Bangkok in July.
"Of course, officials concerned will have to get together and find a way to deal with the concern of Bangladesh," Thai Foreign Ministry spokesman Sihasak Phuangketkeow told reporters.
Khan said: "As soon as the issues are addressed and the procedural matter (cabinet approval) is over, we'll be ready to sign".
Initially the leaders of the seven nations had been expected in Phuket to sign the pact, but their gathering was postponed because the Indian prime minister could not attend.
"SPANNING TWO REGIONS" The free trade pact, if implemented, would span South Asia, which has a population of more than 1.3 billion and Southeast Asia, home to 500 million people.
The seven members of the regional economic co-operation group, known as BIMST-EC, have a combined gross domestic product of more than $700 billion.
"By spanning two important regions, BIMST-EC is the logical linking mechanism to bring together various interlocking pieces of the jigsaw puzzle that is Asia," Thai Foreign Minister Surakiart Sathirathai said in opening remarks, referring to the abbreviation of the economic co-operation group.
The original draft provided for the five countries to start cutting import taxes in mid-2005.
India, Sri Lanka and Thailand, categorised in the pact as developing countries, plan to charge no tariffs on each others' goods and services by July 2012, five years ahead of Bangladesh, Myanmar, Nepal and Bhutan, grouped as least developed countries.
Apart from the free trade pact, foreign ministers from the seven nations also discussed how to smooth the travel of business people within the group, co-operation on energy, roads, and boosting air travel to promote tourism.
Thai officials said Myanmar would take a leading role on "development of hydrocarbon and hydropower potential" in the region, which had enormous gas reserves and water.
"We further recommend that BIMST-EC work together for Trans-BIMST-EC natural gas pipeline," the statement said.
Myanmar also asked its counterparts to support its project to develop a deep sea port on its south-west coast, which could become a "transportation hub" between South and Southeast Asia, Sihasak said.
India offered to do a feasibility study on the project, which is called the Dawei Deep Sea Port, the joint statement said.
The economic forum also touched upon threats of international militancy and infectious diseases, saying they would collaborate actively to "combat the rising threat to security arising from terrorism," and agreed on the "need for an effective collective response" through all means.
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