The world´s second largest economy has already announced to provide zero duty access to 4,721 products from the Least Developed Countries (LDCs) by 2020.[break]
The government has already sent a letter to the Chinese government stating that the offer of zero tariff access to additional goods by the northern neighbor is positive move to boost Nepal´s exports.
“We have taken the Chinese offer as a very positive step which would increase our export to China if we strengthen our supply capacity by boosting domestic production,” said a senior official at the Ministry of Commerce and Supplies (MoCS).
The official said both the countries will sign an agreement regarding the duty free entry of Nepali goods to Nepal´s second largest trade partner after India.
“We have prepared a draft agreement which is to be endorsed by the cabinet before the senior officials of the both countries sign it. Most possibly the pact will be approved by cabinet immediately after Dashain to pave the way for the agreement,” said the official.
Of the products eligible for duty free entry to China, the government has also prepared a list of goods that have high potential to be exported to China.
Few weeks back, China had sent a list of additional goods under the duty free privilege to LDCs including Nepal. China has placed a condition that any exportable item should have at least 40 percent value addition in Nepal to get the duty-free access.
“We have incorporated 366 goods which have good prospects in the Chinese market. Most of the goods included in our list are traditionally exported as well as emerging exportable goods,” the official further added.
Despite immense potential of boosting trade with China, Nepal has been facing huge trade deficit with the Asia´s largest economy amid nominal export volume as compared to imports given the weak capacity to supply goods as per the demands.
Nepal has been exporting, noodles, live plants, milled rice, juices, leather, carpet, flour, incense stick, handicraft and silver jewelries to China. Similarly electronics, fruits, vegetables, garment, textile, furniture, yarn, lubricating oils, garlic, apple, ginger, shoes, machineries, vehicles and home appliances, among others are major imports from China.
Nepal exported 368 varieties of products worth Rs 985.59 million to China during the fiscal year 2011/12 whereas total exports from China stood at Rs 52.92 billion during the year.
Experts, however, opined that most of total 7,787 goods under the duty-free access offer are less meaningful to Nepal.
Traders have also long been complaining of non-tariff barriers including strict quarantine rules, frequent changes in customs rules in China as major obstacles to improving Nepal´s exports.
Nepal´s trade deficit jumped to Rs 52 billion in the fiscal year 2011/12 from Rs 45 billion recorded the previous year.
Related story
Solar Irrigation Pumps, Women and Smallholders in Eastern Tarai
