Two years after signing the Transit and Transportation Agreement, Nepal and China have agreed on the text of the protocol to the agreement that will allow Nepali traders and businessmen to use Chinese sea and land ports for third country trade.
With this agreement, Nepal’s long dependence on India for third-country trading has ended, allowing Nepal to trade from the Chinese sea and land ports once the deal goes into effect. Prime Minister K P Oli had signed the Transit and Transporation Agreement with China in March 2016, following months-long Indian blockade at the southern border.
The major takeaway of the agreement is that Nepal can use four Chinese seaports, three land ports for third country import, and export through the six dedicated transit points between Nepal and China.
“The Chinese side is also open for Nepal to use its other seaports if Nepal requires them,” said Joint Secretary at Ministry of Commerce and Supplies Rabi Shankar Saiju, who led the Nepali delegation in the talks.
The agreed-upon text will be signed during a high-level visit from China, the date or details of which haven’t been announced, said one foreign ministry official. The official said the Chinese side has hinted that the protocol can be signed during Chinese President Xi Jinping’s visit to Nepal, expected to take place in 2019. The Chinese president was rumoured to visit this year but Chinese officials have been telling Nepali counterparts that his schedule was packed this year.
According to a press statement issued by the Ministry of Industry, Commerce and Supplies following the agreement on Thursday, China has agreed to let Nepal use Tianjin, Shenzhen, Lianyungang and Zhanjiang seaports and Lanzhou, Lhasa and Xigatse dry ports for trading with third countries.
One major hurdle to implementing the deal, according to the Nepali officials, is the upgrade and improvement of Nepali roads connecting China. Nepal also faces challenges from poor infrastructure on its side of the border, including maintenance of highways and construction of dry ports to park the imported and exported goods.
“This is a major breakthrough. But we have to upgrade our infrastructure too,” Sushil Lamsal, Deputy Chief of the Mission at Nepali Embassy in China, Beijing told the Post who was also part of the Nepali delegation.
Imported goods will be transported up to Xigaste from Chinese rail and Nepali containers will bring back them from Xigaste to the Nepali border. As of now, Nepali containers are allowed to travel up to Kerung. The same rule applies to two other land ports.
Before the transportation of import or export good, the Nepali side will provide the lists of goods and the electronic bills of each transported items to the Chinese side. Almost all Chinese containers are electronically monitored.
Nepal and China had agreed in 2012 to open six dedicated land routes: Humla, Korola, Rasuawagadhi, Tatopani, Olangchunggola and Kimangthanka. The Rasuwagahdi-Kerung route has been operational since 2014.
The Nepali side of the delegation was led by Sainju while Wang Shuiping, director general at the Department of Transport Services, led the nine-member Chinese delegation during Thursday’s meeting.