During the bi-lateral trade talks held on 24th - 25th in Bhutanese capital Thimpu officials of the both countries have agreed on a draft of trade agreement that comprises trade protocol, issues of Rules of Origin (RoO) and setting up an intergovernmental trade forum. [break]
Nepal has no trade agreement with Bhutan which has become an emerging market for hundreds of Nepali goods.
“Bhutanese officials have shown positive response toward our proposal for zero tariffs on our products which are gaining market in the Druk Kingdom,” a source at the Ministry of Commerce and Supplies (MoCS) told Republica.
Bhutan is also positive about Nepal´s proposal on preferential treatment for Nepali goods that have more than 20 percent value addition for the RoO certification under preferential treatment. Both sides have also identified possible entry and exit points for transit of goods between two countries.
“Both sides have identified entry and exit points such as Nepal´s Birgunj and Kakadvitta, and Bhutan´s Phutsoling for bi-lateral trade. However, we have to request to India for the transit route involving those points,” said another source. Currently, Nepal has been using Kakarvitta-Phutsoling route via Jaigaun of India. Both countries have to sign agreement with India to utilize the new routes for Nepal-Bhutan trade.
A press statement issued by MoCS on Thursday, stated that both sides also reviewed the progress in the implementation of the agreements reached during the bi-lateral trade talks held on March 17, 2010 in Kathmandu. “In addition to this, both sides also held discussion on draft of protocol and RoO under the proposed bi-lateral trade agreement,” says the statement. Discussion on bi-lateral trade promotion and trade facilitation were also held during the Thimpu meeting.
Nepal trade delegation led by Toya Narayan Gyawali, a joint secretary at the MoCS, also held talks with Dasho Sonam Chhiring, the secretary of the Ministry of Economic Affairs in Thimpu.
Nepali products recording high exports and having high potential are iron products, electricity transmission pole, GI pipes, electricity transformer, fruits, vegetables, tea, noodles, chocolates, soaps and handicrafts.
Thimpu has been imposing more than 50 percent customs duty on Nepali fruits and vegetables. Similarly, Bhutan has also asked Nepal for waiver of customs duty on around 100 goods including potatoes, green-chilly, mushroom, apple, liquor, lemon and handicrafts.
Nepal reported a record trade surplus worth Rs 1.42 billion with Bhutan in fiscal year 2009/10. Bhutan had imported Nepali goods worth Rs 1.55 billion and exported goods worth just Rs 133 million during the period.
The two South Asian neighbors are yet to formalize bilateral trade agreement. However, both the countries are signatories to the South Asian Free Trade Area (SAFTA) -- a regional trade agreement that aims for intra-regional trade growth through easy mobility of goods among member countries.
Nepal´s exports to Bhutan in 2008/09 stood at just Rs 194 million. However, its import during the period from the Druk kingdom was Rs 352 million.
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