Nepal's transit protocol signing with China uncertain

Nepal was reeling from the border blockade enforced by India at the time, and signing the agreement meant diversifying Nepal's access to sea ports with alternative routes for third-country trade.

Published: 16th June 2018 11:04 AM  |   Last Updated: 16th June 2018 11:04 AM   |  A+A-

(FILES) In this photograph taken on October 28, 2015, KP Sharma Oli waves after casting his vote in an election for Nepal's new president in Kathmandu | AFP


KATHMANDU: The chance of Nepal and China signing the Protocol to Transit and Transport Agreement during the upcoming state visit of Prime Minister KP Sharma Oli to China remains uncertain with Beijing yet to respond on the subject, The Kathmandu Post has reported.

During his 2016 China visit, PM Oli had reached a pact with the Chinese government on signing of the protocol.

Nepal was reeling from the border blockade enforced by India at the time, and signing the agreement meant diversifying Nepal's access to sea ports with alternative routes for third-country trade.

"We are awaiting China's response. Nepal is ready to sign the protocol," said a senior official privy to the negotiations.

Officials at the ministries of foreign affairs, and commerce and supplies are hopeful that the protocol would be signed during PM Oli's China visit.

"What I can say is that the chances are fifty-fifty," the official added.

The Chinese side has apparently yet to get the go-ahead from the top political leadership for the protocol signing.

Officials said Nepal has sought three seas ports and two land ports for its third-country trade and transit via China.

Nepal has proposed to use Tianjin, Shanghai and Guangzhou sea ports, besides two other land ports to facilitate third country trade.

During a press conference on Thursday, Minister for Foreign Affairs Pradeep Gyawali had expressed hope that the protocol to transit and transport would be signed.

But some officials say though PM's China visit will be focused on implementing the accords and agreements reached with China in the past, some key pacts signed in his last visit are unlikely to be followed through.

Still, preparations are underway to sign at least a dozen pacts and memoranda of understanding related to energy, grid connection, repairing bridges, opening new border points, and rail and road, among others.

Signing of Free Trade Agreement between Nepal and China is also unlikely to take place during Oli's China visit.

"We cannot compete with China's economy. Before signing the FTA with China, we have to do a lot of homework," an official said.

After Oli's visit in 2016, the MoFA had prepared a matrix of the agreements signed during the visit where it was stated that before signing the FTA, a research team would carry out an independent study on various aspects of FTA, including joint feasibility study, identification of major priority export sectors of Nepal in Chinese market and signing a memorandum of understanding for FTA negotiation after finalisation of joint feasibility study.

Nepal has yet complete its homework to be able to sign the FTA with China.

The proposed Bilateral Investment Promotion Agreement ( BIPA) is another accord that could be excluded from PM's agenda.


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