KATHMANDU, June 2: Nepal has proposed holding bilateral trade talks with China in the first week of July to hammer out all outstanding issues on tariff and transit-related barriers.
"Preparations are under way to hold the third meeting of Nepal-Tibet Trade Facilitation Committee (NTTFC) in the first week of July," Naindra Prasad Upadhyaya, joint secretary at the Ministry of Commerce and Supplies (MoCS) told Republica on Thursday.
The talks, scheduled for last week, were postponed after uncertainty loomed due to series of bandas called by various groups prior to the May 27 dissolution of the Constituent Assembly.
The joint-secretary level meeting, which will be held in China this year, is an annual function. MoCS is looking forward to discussing problems faced by the Nepali business sector during the meeting.
However, Nepali businessmen are not optimistic about the talks yielding positive results.
"The trade talks between the two countries have not been able to address our problems," Rajesh Kaji Shrestha, president of the Nepal-China Chamber of Commerce (NCC), said.
Interestingly, a recent study carried out by the South Asia Watch on Trade, Economics and Environment (SAWTEE), with the assistance of the United States Agency for International Development (USAID), has claimed Nepal´s trade agreement with China has failed to uphold the national interest.
"The letter of exchange signed between Nepal and China in May 2010 has turned out to be a barrier for the export growth of Nepal," the study states.
However, MoCS officials refuted such claims. "Definitely, the agreement might not have been as supportive, as domestic value addition on goods exported to China should be at least 40%," one of the officials said on condition of anonymity, adding, "The report was mostly based on survey with businessmen."
According to the Trade and Export Promotion Centre (TEPC), trade deficit with China shot up to Rs 45 billion during the fiscal year 2010/11 from Rs 11 billion in 2005/06.