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Kathmandu Thursday February 28, 2002 Falgun 16, 2058.
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First
day of trade talks yields no progress
By Bijaya Ghimire
NEW DELHI Feb 27 : The secretary level trade
talks held here today could not make any progress as both Nepal and India remained firm on
their stance, despite their efforts of finalizing the renewal process of the Nepal-India
Trade Treaty.
There have been tough negotiations between the
two parties, but efforts are on to reach to an agreement on the renewal of the treaty by
Thursday, said one of the Nepali participants in the talks.
Today’s talks were centred on value
addition formulae and the four items that India has been putting into "export
surge" and other issues, but both the sides stuck to their stand on the percentage on
value addition on Nepali exports to India.
Secretary at the Ministry of Industry, Commerce
and Supplies Bhanu Prasad Acharya, who heads of the Nepali team, talking to The Kathmandu
Post, said, "The talks are progressing and we are making best possible efforts to
reach to an agreement on the renewal of the Treaty."
It is felt that a sudden rise in the export of
vegetable ghee, during the extension of the treaty by three months that was to expire on
December 5, 2001, has further complicated the talks. The Indian side has been irked by the
sudden rise in the export of vegetable ghee to India during the period.
As the expiry of the treaty is just a few days
away, both sides are making attempts to find amicable solutions to the problems.
Participants in the talks are also hopeful of finding a permanent solution to the renewal
of the Treaty.
As India wants Nepal to use maximum Indian raw
materials in products that it imports, the recommendation of Joint Economic Council (JEC)
of imposing 30 per cent value addition on Nepali exports to India would be acceptable to
both sides. The Indian side has hinted at lowering the percentage of value addition on the
products that use Indian raw materials.
Similarly, India had indicated of lowering the
value addition slab to 35 per cent and Nepal hinted at scaling up to 25 per cent during
the fifth round of talks held in Kathmandu.
Like in the previous rounds of talks, the Indian
side raised the issue of making changes in the Treaty on the basis of the "export
surge" of four items: vegetable ghee, acrylic yarn, zinc oxide and copper wire today.
India wants to apply international formulae to
arrest the surge of such exportable items to India while Nepal has been stressing on
employing formulae that are in the interest of both Nepal and India.
Besides, India also raised the issue of imposing
quantitative restriction to check the "export surge" of the four items. However,
Nepal has been maintaining that such a provision would affect the spirit of the Treaty, as
the four items’ total export is just 14 per cent.
The private sectors of both the countries are
also making endeavours to reach to an agreement. On the understanding of Confederation of
Indian Industries (CII) and Federation of Nepalese Chambers of Commerce and Industry
(FNCCI) talks were held between the Zinc Oxide Associations of both countries Wednesday
and they have agreed to impose quantitative restriction on Nepali exports in case of
surge.
This time too, India clearly showed that it
wanted to renew the Treaty as per international practice. Padma Jyoti, President of SAARC
Chambers of Commerce and Industry, says we should understand it and act in future
accordingly. We should focus on mutual benefit, instead of individual interest, he adds.
Representatives of Ministries of Industry,
Commerce and supplies and Ministries of Finance and diplomats at Royal Nepal Embassy in
New Delhi and Indian Embassy in Nepal are participating in the two-day talks that ends
Thursday.
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