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No shipment even after seven years of Nepal-China int’l trade transit deal

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(TibetanReview.net, Apr24’23) – After being signed in Beijing with much fanfare on Apr 23, 2016 as a significant move against India-dependence, nothing has happened on the ground and the Trade and Transit Agreement between China and Nepal has remained a dead-letter deal. A protocol on implementing the agreement was signed in Apr 2019 during the visit to China by a delegation led by President Bidya Devi Bhandari, but no shipment has moved so far under the agreement, reported the kathmandupost.com Apr 22.

The fact that Nepal has signed up to China’s Belt and Road Initiative (BRI) has also not helped, the report said.

The agreement, signed during the visit to China by Prime Minister KP Sharma Oli, gives Nepal access to four Chinese sea ports in Tianjin, Shenzhen, Lianyungang and Zhanjiang, and three land ports in Lanzhou, Lhasa and Shigatse for third-country imports. The agreement also allows Nepal to carry out exports through six dedicated transit points between Nepal and China.

For Nepal, it was meant to reduce over-dependence on India, while for China it was supposed to bring Kathmandu closer within its orbit of geopolitical influence.

Nepal’s communist Prime Minister KPS Oli was hailed for turning north to break the country’s near-complete dependency on the southern neighbour for third-country trade. But now, officials at Nepal’s Ministry of Industry, Commerce and Supplies say that not a single shipment has moved between the two countries in the seven years, the report said.

The report noted that the deal had come on the heels of a months-long border blockade imposed by India after Nepal adopted its new constitution without incorporating several Indian concerns.

The agreement was supposed to help Nepal diversify its trade and transit with other countries to deal with the difficulties created by the blockade.

The report lamented, however, that it has now been seven years since the agreement was signed and over two years since the protocol was signed, but Nepal and China have yet to develop the standard operating procedure (SOP) for implementing the transit agreement.

For decades, Nepal has relied solely on India for its third-country trade, for various reasons including historical relationship, open border and road connectivity. But this dependence on India has on several occasions led to shortages in Nepal whenever there are any disruptions on the border, the report noted.

 Nepali officials were also stated to have been confident that after signing up to Beijing’s BRI, it could trade via China with other BRI-member countries.

“We had also agreed to set up special economic zones in Kerung and Nuwakot districts in order to facilitate bilateral and third-country trade via China. Why these agreements and understandings are not moving ahead, I have no idea,” Mahesh Maskey, Nepali ambassador to China at the time of signing the agreement has said.

“It is disheartening that not a single consignment has arrived in the past seven years and we could not even hold any discussions on how to move forward,” Nepal’s former joint secretary Rabi Sainju, who has held a series of negotiations with Chinese officials, has said.

The Nepal-China border has two main trade points, both of which were frequently shut. Most recently, the Rasuwagadhi-Kerung border resumed operation on Apr 1 and Tatopani border will do so on May 1, the report noted.

Many say third-country trade via China is now a pipe dream at a time when even bilateral trade with the north has been difficult, the report lamented.

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