PHUKET, Thailand (AFP) - Asian foreign ministers salvaged a free tradedeal jeopardised by Bangladesh's sudden withdrawal, pledging to throw opentheir markets by abolishing tariffs before 2017, officials said.

The five founding nations of BIMSTEC (Bangladesh, India, Myanmar, SriLanka and Thailand -- Economic Cooperation) were expected to ink the draftdeal at a ceremony later Sunday, leaving new members Bhutan and Nepal tojoin later.

But Bangladesh pulled out Saturday after demanding compensation for anyrevenue lost as a result of dropping tariffs, ignoring other members'assurances that their concerns could be addressed within the agreement.

Faced with the prospect of only four of the seven BIMSTEC members signingup to the deal, the Thai hosts considered postponing the ceremony to asummit planned for July when it hoped more nations would be ready to join.

However, Nepal and Bhutan saved the day by making quick decisions to enterthe deal, Thai foreign ministry spokesman Sihasak Phuangketkeow said aftera meeting of the group's foreign ministers on this Thai resort island.

"Six countries will be signing with the exception of Bangladesh," he toldreporters. "In the end (the ministers) decided that if they didn't sign itafter having already announced it, it would send out the wrong signal."

Sihasak said Bangladesh had wrongly thought that because a BIMSTEC summitoriginally planned for Monday was postponed several weeks ago, the signingof the free trade deal would also be delayed.

"Maybe that issue of compensation could have been cleared up in time ifthey had not been under the impression that the signing would be postponeduntil the summit," he said.

"They don't see the issue of compensation as something that can't beresolved... there are quite a few ways of dealing with the concerns ofBangladesh."

Under the deal, BIMSTEC's more-developed members India, Sri Lanka andThailand will commit to abolish tariffs by 2012 while the threeless-developed members Myanmar, Bhutan and Nepal will have anotherfive-year grace period.

Tariffs will begin to be reduced in mid-2006, with products designated for"fast track" treatment to be traded on a zero-tariff basis by mid-2009 forthe three developed members and by mid-2011 for the poorer members.

Thai Foreign Minister Surakiart Sathirathai said in an opening speech thatthe seven-nation BIMSTEC grouping was "the logical linking mechanism tobring together various interlocking pieces of the jigsaw puzzle that isAsia."

The BIMSTEC trade deal, aimed at linking South and Southeast Asia whichtogether are home to nearly two billion people, was part of a trendtowards unfettered trade in the region, he said.

"This network of functional cooperation, while embryonic, has thepotential, in time, to develop into an Asian economic community," he said,referring to the web of agreements, dialogues and joint projects signed inrecent years.

"BIMSTEC is poised to fulfill its promise of bridging South and SoutheastAsia and elevating the relationship onto a higher plane of cooperation."

Nepal and Bhutan were Sunday formally admitted to the grouping,represented by their foreign ministers who both wore national dress --Bhutan's Lyonpo Khandu Wanchuk resplendent in a knee-length checkered robecinched at the waist.

Officials said earlier that the ongoing talks would touch on establishinga common position on terrorism, and finding ways to cooperate to fightinfectious diseases like the bird flu which has swept across Asia.

The bird flu outbreak has killed 18 people in Vietnam and Thailand andemerged in poultry in eight other Asian nations, only a year after theSARS epidemic caused panic as it swept the region.