 |
Kathmandu Monday March 04, 2002 Falgun 20, 2058.
|
Regressive achievement
The formal extension of the Nepal-India trade
treaty in New Delhi Saturday can be termed a regressive achievement. The agreement not
only added an extra 25 percent duty, as value added, in the first year and 30 percent from
the second year, on some Nepalese goods being exported to India as a pre-condition for
duty free treatment but also put quantitative restrictions on such exports. There is no
clause in the treaty that will prevent such measures being applied in future to other
goods. Nepalese exports to India, especially those to which Indian manufacturers objected,
account for less than one percent of Indian consumption and can therefore in no way be
termed a "surge". That the Nepalese delegation expressed satisfaction at the
outcome is not surprising. To do otherwise would mean admitting failure to negotiate
properly with the Indian officials. That it took over half a dozen official level meetings
and that the prime ministers of the two countries had to talk to each other to get the
treaty extended go to show the level of pressure brought to bear on the Indian government
by India’s business community. Yet the new measures to make Nepalese exports to India
dearer come at a time when SAARC is talking of a South Asian Free Trade Zone and member
countries including Nepal are vying to get entry into the World Trade Organisation (WTO)
whose chief purpose is not merely to foster trade – which went on before WTO and will
go on even if WTO should ever go bust- but to see to it that people everywhere get the
best possible products at the cheapest possible prices. And the new trade agreement has
come at a time when Nepalese farmers have been crying themselves hoarse about the falling
prices of foodgrain and other agricultural products because of cheaper imports from India.
The ever-widening trade deficit with India which
had shown some signs of reversal can now be expected to further worsen. This despite the
leaders of both countries speaking emphatically of the need to redress the situation and
bring a semblance of balance to the trade between the two countries. Such utterances are a
thing of the past and teach us not to have too much faith in political leaders. When
principles are sacrificed at the altar of convenience, usually at the behest of political
leaders, the world becomes a poorer place and people suffer. There is little doubt that
principles were sacrificed during the Nepal-India trade talks and Nepal, presented with a
take-it-or-leave-it package, had no option but to sign along the dotted line. We had in
the past opposed the Indian stand on Kodak not because we preferred the US company to,
say, Japan’s Fuji Films but because barring the entry of Kodak into India from Nepal
closed the door for much direct foreign investment in Nepal. We would do well to note that
countries and territories like Japan and Hong Kong in the past and Singapore and Taiwan,
to name a few, have no great natural resources of their own but were able to make
unprecedented strides in trade, commerce and industry. The Nepalese business community may
be happy that they can now get their goods exported to India because they were already
paying a substantial amount in taxes to the government in the past and the present value
added will merely replace that. But no one who looks to the future can really be pleased
over the regressive nature of the trade agreement and its implications for the future. |
