Nepal has failed to exert diplomatic pressure on India -- the largest trade partner - to hold joint secretary and secretary level talks on time. These talks are supposed to be held every six months. Pending issues in bilateral trade and negotiations like opening trade infrastructure have not been resolved in the absence of talks with the southern neighbor.[break]
Nepal-India Inter-governmental Sub-committee (IGSC) and Intergovernmental Committee (IGC) meetings have not been held since two years. The joint-secretary level IGSC meeting was lased held in New Delhi in the first week of March, 2011.
“We are seeking opinion from experts and business people as part of our preparation for the crucial talks,” Jiba Raj Koirala, joint secretary at the Ministry of Commerce and Supplies (MoCS), told Republica.
The secretary-level IGC meeting between Nepal and India has not been held since December, 2011.
Uncertainty over talks has seriously hampered the process of developing vital trade and transit infrastructures. Development of trade point in Dodhara-Chandani area and the process of opening railheads in Jogbani and Nautanawa of India to support bilateral trade via Kolkata port and introduction of new trade facilities under the proposed Railway Service Agreement have been delayed due to uncertainty of talks.
As per the provisions in the existing transit treaty, Nepal has been using only the Birgunj-Kolkata route for its third country trade.
Worse still, renewal of Nepal-India Transit Treaty, which is crucial to strengthen Nepal´s trade with the southern neighbor and overseas countries through the development of trade infrastructure, with additional provisions that envisage opening additional trade routes, increasing transit facilities and opening Visakhapatnam Port for Nepal´s third country trade has become uncertain.
In the absence of trade facilitation, it is becoming a huge challenge for the country to reduce its ballooning trade deficit with India that have crossed Rs 222 billion with imports surging by 25.7 percent to Rs 255.79 billion during the first eight months of the current fiscal year.
“At a time when Nepal´s trade deficit with India is widening, the government´s indifference to expedite diplomatic efforts for such crucial talks with key partners doesn´t show good prospect for the country´s international trade,” a former commerce secretary told Republica.
Similarly, Nepal-US trade talks under Trade and Investment Framework Agreement (TIFA) has also been pending for last three years since the bilateral agreement was signed in Washington on April 16, 2010, setting up a bi-lateral forum for trade dialogue.
The pact envisages holding bilateral talks through the Nepal and the US Council on Trade and Investment (NSCTI) -- the commerce secretary level permanent mechanism -- once a year to look for ways to boost bi-lateral trade.
Nepal has been suffering double-digit decline in trade with the US after the phase out of duty-free-quota-free facilities provided to Nepali goods, especially the readymade garments, in 2004.
Nepal´s import from US declined nominally by 0.5 percent to Rs 2.98 billion, while the country´s export to the world´s largest economy fell by 12.4 percent to Rs 3.41 billion during the first eight months of the current fiscal year.
Likewise, date for another round of technical meeting of joint secretaries of Nepal and Bangladesh has not fixed even though its already two months that the first round of talks were held in Dhaka.
Joint secretaries of both the countries are supposed to finalize the pact on host of trade issues, including providing duty-fee access for Bangladeshi products to Nepal, recognizing quality certification for exportable goods from both countries and effective utilization of Chittagong and Mongla ports of Bangladesh for bilateral trade, ahead of the secretary level meeting.
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