Impractical quarantine system, non-transparent and frequently changing customs rules, non-cooperative attitude of Chinese customs officials and poor competitive power of Nepali goods in the vast Chinese market are the major reasons hindering Nepali exports to the world´s second largest economy.[break]
“We are facing problems in export of vegetables, meat and other food items - the products with high export potentials - due to stringent quarantine rules and additional local tax slapped on Nepali goods entering China via land route (Khasa),” Rajesh Kaji Shrestha, president of Nepal-China Chamber of Commerce and Industry told Republica.
“The impractical quarantine system imposed by Chinese authorities is also spurring smuggling of Nepali food items to the northern neighbor.”
Though most of the Nepali goods are consumed in Tibet Autonomous Region of China, Tibetan officials do not have the authority to implement trade agreements without consulting with mainland China authorities.
Shrestha said simplified quarantine system, development of trade infrastructure including well-equipped customs, easy transport linkage and dry ports and transparent customs rules are a must to narrow down ballooning trade deficit with China. Nepal had suffered trade deficit of Rs 38 billion with China during fiscal year 2009/10.
Total imports from China increased by 0.8 percent to Rs 26.75 billion over the first eight months of 2010/11, compared to the figures recorded during the same period last year.
However, exports to China dropped drastically by 55 percent to Rs 360 million during the review period.
“We can´t promote our products in China, which has become a hub from products across the world, without Chinese cooperation,” Shrestha said.
A total of 361 Nepali items being exported to the northern neighbor are eligible for zero-tariff facility offered by China to a total of 4,721 goods imported from Least Developed Countries (LDCs), including Nepal. However, export volume of these products is very low.
“We have asked the Chinese officials to facilitate exports of traditionally exported goods and emerging exportable goods such as floor mats,” said Shrestha.
Durga Bahadur Shrestha, president of Nepal Trans Himalaya Border Trade Association, said frequent changes of customs rules, unnecessary hassles at customs and poor customs infrastructure are the major reasons hindering Nepal-China trade.
Toya Narayan Gyawali, joint secretary at the Ministry of Commerce and Supplies, who is leading the Nepali delegation during Nepal-China trade talks that began on Monday, said Chinese officials are positive about facilitating entry of Nepali goods to China.
“During the meeting, we also apprised Chinese authorities of the obstacles that are preventing Nepal from benefiting from China´s zero-tariff facility,” added Gyawali.
During the meeting, Nepali officials sought Chinese support in strengthening facilities at customs, improving road networks, simplifying trading of goods by establishing a branch of Chinese bank in Nepal and activating working group to settle trade related misunderstandings at local level.
According to a source at the Ministry of Commerce and Supplies, the Chinese officials expressed their willingness to bring Tatopani dry port into operation and complete construction of Rashuwagadhi-Kerung roads within this year. They are also positive on Nepal´s request to simplify existing quarantine rules.
Both the sides set eight-point common agendas on simplifying bilateral trade during the two-day Nepal-Tibet Trade Facilitation Committee (NTTFC) meeting. Gyawali said the Chinese delegation has showed interest to invest in agro-based industries and hydropower sector if Nepal provides incentives for investors.
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