The Chinese government has recently pledged its support to build a dry port at Tatopani, near the Nepal-China border, and the construction is slated to begin today. Considering that China is Nepal’s second largest trading partner, this construction could prove fruitful. Landlocked countries like Nepal are often at a disadvantage in international trade, because they often have to pay customs charges, over and above the charges paid at their destination country, to neighboring countries when exporting goods by land. This raises the price of their goods and decreases their competitiveness.
According to a World Bank study, a landlocked country like Nepal incurs 42 percent more transportation charges than countries with ports. In light of problems like these, the issues of landlocked countries have been debated for a long time in international arena, but an agreement could only be reached in 1982 after 14 years of negotiation at the United Nations Convention on the Law of the Sea. Signed by 150 countries, this agreement discusses the equitable sharing of resources, and outlines “the right of access of land-locked states to and from the sea and freedom of transit.” It also stipulates that nations with ports are obliged to provide transit to neighboring land-locked countries without any reciprocal benefits.
Many countries with access to sea provide routes for the same to their landlocked neighbors. For example, landlocked Hungary, Slovakia and Serbia access the sea through the Danube River, which passes through several nations. Austria accesses the sea through a land route going through Belgium, and similar treaties exist between Hungary and Yugoslavia. Such agreements also exist between African and Latin American nations. For instance, Mali avails of port facilities at Senegal, and Bolivia has agreements for free transit with Argentina and Brazil. In Nepal, several efforts have been made to realize these international laws and practices through transit treaties.
A transit country should typically provide routes for transportation of goods without any extra customs fees. India has always been Nepal’s first choice for transit due to factors like geographical proximity and ease of transport. Subsequently, the first transit treaty with India was signed in 1971. The treaty has been renewed several times, but from 1971 until now, India has refused to budge from recognizing Nepal’s “need” for access to the sea instead of her “right” to it, as stipulated by international laws.
There have been many initiatives to establish dry ports in Nepal from which to transport goods. After several hiccups in the initial phases, a dry port in Birgunj, the customs point with the most traffic in Nepal, is finally in operation. Goods can be ferried from Birgunj to Kolkata port through a network of roads and trains that come up to the border town of Raxaul. However, though the facilities are world class, this port is underutilized due to administrative problems like long queues, crowds and mismanagement at Kolkata port.
Nepal has never signed a transit treaty with China, mainly because of the difficulties of transporting goods to the Chinese border and beyond in a difficult-to-navigate mountainous landscape. But Nepal’s options for international trade by land are limited, as outlined above, and Nepal needs to explore other possible outlets for its products. An initiative like a dry port that is bound to facilitate trade with China is to be lauded. In 2011/12, Nepal’s total import from China amounted to Rs. 53 billion, while total export was only Rs. 1 billion. It is hoped that dry port facilities at Nepal-China border will help increase Nepal’s export to China and in the process reduce the country’s burgeoning trade deficit