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| Kathmandu, Monday August 11, 2003 Shrawan 26, 2060. |
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Tibet eyes Nepali
rice
Experts demand broader trade solutions
By Milan Mani Sharma
KATHAMANDU, Aug 10 : While the government
officials are preparing to formally request China to provide duty-free market access to
Nepali exports, Tibetan Cereal Bureau (TCB) has approached the Nepali government to supply
it with rice.
"For the first year, the demand has been
placed for 5,000 tons of rice," Govinda Kusum, Joint Secretary at Ministry of
Industry, Commerce and Supplies (MoICS) told The Kathmandu Post.
The proposal was placed after a delegation of
the Bureau led by Zhao Fang Chun, its Deputy Director, visited Kathmandu in the first week
of august.
It has expressed an interest to secure the
supply from Nepal Food Corporation (NFC) and Salt Trading Corporation (STC) and has even
informed that the demand could soar if Nepal fulfils the supply on time and ensure its
quality.
"For final negotiation, mainly on price and
quality of supply, a Nepali team comprising the officials of STC and NFC officials are
leaving for Tibet soon," said Kusum.
Officials take the latest proposal in positive
light, especially as it has come at a time when they are informally negotiating with
Chinese officials in Kathmandu for better trade facilitation measures to boost bilateral
trade.
"The proposal, if finalised, would pave way
for other agriculture products like ghee, oil, wheat and flour among others," they
said.
Various studies have shown that supply of
construction materials and consumer goods to Tibet is more feasible from Nepal than
Mainland China. "This would, in fact, rather help the Chinese government reduce its
liabilities, as it has been providing high subsidies in commodities being supplied to
Tibet," states an FNCCI study.
Owing to geographical proximity and financial
factors, even the United Nations Conference on Trade and Development (UNCTAD) has
identified Nepal as a strategic transit facilitator to Tibet’s development thrusts.
Currently, China is constructing a broad-gauge
railway to link Lahsa with the Major Chinese markets. "But that would not change the
trade opportunities for Nepal," said experts. On the contrary, Nepali officials have
been requesting China to extend the railways service up to Khasa, citing that it would
facilitate Nepal’s trade with northern neighbour.
However, to expand the trade, the FNCCI has been
recommending the government to seek the duty-free market access facility with China.
"This is necessary to bridge widening trade gap between two neighbours," states
its report.
Noodles, beer, cement, steel rods and vegetables
have been identified other the major potential exportable products from Nepal. However,
owing to higher customs duty and other charges, their competitiveness has been eroding
presently.
"In this connection, providing special
provisions for Nepali exports is decisive to bridge the widening trade gap," said
experts. Nepal has experienced a trade deficit of over Rs 8 billion with China in 2002
alone.
This is also crucial in expanding trade with
Mainland China, as 40 per cent duty on Nepali exports and the distance factor have been
eroding competitiveness of Nepali products in the Chinese market, states the FNCCI study.
"The government should pick up the issue of
trade expansion on broader spectrum, rather than on commodity basis, and deal with the
matter at higher levels," said Rajesh Kaji Shrestha, President of Nepal Chamber of
Commerce (NCC).
Nepal has bilateral trade agreement with China
since 1981. The treaty is being automatically renewed every three years with no proposal
for reviewing coming from either governments.
In fact, the two governments have never sat down
together and assessed its impacts since the time of signing the bilateral treaty.
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