Nepal’s transit deal with China remains stalled even after five years

Kathmandu [Nepal], July 12 (ANI): Even after the passage of five years since the signing of the Nepal-China Transit and Transportation Agreement, Kathmandu and Beijing have been unable to make headways in a much-touted bilateral deal.

KP Sharma Oli administration, in May 2016, had signed a Transit and Transportation Agreement with China. Oli had even received praise for turning north to break Nepal’s near-complete dependency on the southern neighbour for third-country trade.

Nepal, a landlocked country, is heavily dependent on its neighbours, particularly India, for essential goods and the use of ports for trade with other countries. The finalisation of the transit protocol was expected to also allow Kathmandu to access Chinese sea and land ports.

Over five years since the deal was signed, the two neighbours have yet to develop even the standard operating procedure (SOP) on implementing the transit deal, The Kathmandu Post reported.

Former government officials who were part of negotiations told the Post, the government failed to accord the required priority to implement the agreement.

“Nepal has yet to receive a single consignment from any third country via China under the agreement that the government signed five years ago,” said Purushottam Ojha, a former commerce and industry secretary. “It looks like the government wanted to show India that Nepal also has a transit agreement with China.”

The signing of the protocol meant Nepal could use four Chinese seaports and three land ports for third-country imports. The deal also allowed Nepal to carry out exports through six dedicated transit points between Nepal and China.

Traditionally, Nepal has completely relied on India for a major chunk of its trade due to historical ties, open border and road infrastructure.

According to the Post, multiple officials with knowledge of the issue told said that Nepal is not yet clear about how to utilise the transit facility provided by Beijing.

A foreign ministry official under the condition of anonymity said Nepali authorities do not even know whether the facility provided by China is in our interest. “And no one here knows how to make the most of the facility if it indeed is in Nepal’s larger interest.”

Several other observers believe that third-country trade via China now is becoming a pipedream amid the pandemic. A former joint-secretary said the first half of the total initial life of the agreement has elapsed without a single consignment arriving in Nepal from any third country.

Former joint-secretary Rabi Saiju told the Post that “I wonder if the agreement will expire without its practical implementation. It, however, can be extended for five years again after the expiry.” (ANI)