The list of commodities enjoying the facility covers some 60 percent of total products that Nepal exports to China. The majority of them are agricultural produces like mushroom, orange, cherry, coffee, apple, ginger, tomato, onion, strawberry, honey, cauliflower, broccoli and grapes. [break]
Manufacturing products like beer, readymade garment, carpet, biscuits, soaps, shampoo, textiles, cotton clothes, brass, fruits juice, leather items, marble, paints, ceramics items, silverwares, jewelries, copper wire and cables too are included in the list.
“The facility will come into effect as soon as we complete internal procedures,” said Qiu Guohong, Chinese Ambassador to Nepal, signing a letter of exchange on the new accord.
Commerce Secretary Purushottam Ojha inked the deal on behalf of Nepali government.
“This is a welcome development,” said Binod Chaudhary, president of Confederation of Nepalese Industries (CNI). He said that the facility, once into effect, will support Nepal greatly in bridging the wide trade deficit.
Nepal´s trade with China has continued to grow and presently stands at over Rs 36 billion. But as high tariff barriers continued to erode competitiveness of Nepali commodities, Nepal suffers a trade deficit of about Rs 32 billion.
Referring to the fact that the facility list still excludes a large number of items of Nepal´s export interest, Chaudhary also requested the Chinese government to expand the facility for other goods as well.
The zero-tariff facility was offered by China unilaterally. It has floated the similar facility for other least developed countries (LDCs) as well.
Nepal has been seeking the facility at the bilateral level with China since 2003. In this context, it has been holding negotiations for the facility for some 490 tariff lines (of six digit harmonized code of customs).
However, Nepal decided to unilaterally accept the offer after China floated a separate zero-tariff offer.
“Meanwhile, we will also continue to seek facility for other items of our export interests,” Ojha told myrepublica.com.
Ambassador Guohong too said the Chinese government plans to extend the facility for up to 95 products of Nepal´s total exportable items in years to come. This expansion will be applicable for other LDCs as well.
Technically, concerned officials said, the present Chinese list also has some 150 tariff lines that Nepal never exports. But Guohong suggested traders not to take it as trade limiting factor. Instead, he suggested them to restructure the manufacturing plans, so that Nepal could start exporting new items too.
“I suggest the Nepali business community to study the list, restructure their production capacity and enter into new trading segments,” Guohong said. He viewed establishment of export processing zones that support the development of modern processing industries would work in longer-term trade benefits of Nepal.
milan@myrepublica.com
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