Kathmandu, November 5

Nepal and China have agreed to expedite reconstruction of customs infrastructure and the two major trade routes — Tatopani-Lhasa and Rasuwagadhi-Kyirong — damaged during the earthquakes of April and May to enhance bilateral trade. Though Rasuwagadhi-Kyirong route has already been reopened, the customs offices and other infrastructure need to be reconstructed at the earliest.

The customs deputy director general level talks between Nepal and China that concluded today in the Capital sealed a 20-point deal to expand bilateral trade.

Damodar Regmi, deputy director general of the Customs Department, and his counterpart Long Chengwei, head of the Chinese delegation, inked the pact on behalf of their respective governments.

As per the agreement, the Chinese side has pledged to construct the inland clearance depot (ICD) at Larcha of Sindhupalchowk and Timure of Rasuwa at the earliest. The ICD Larcha is under construction and construction works of ICD Timure will start soon.

Nepal has also sought immigration facility for truckers to enter China and the Chinese side has agreed to the proposal put forward by Nepal.

Nepal and China have also agreed to upgrade the infrastructure of customs and road connectivity at seven other border points. Reportedly, full-fledged customs points will be operated in Yari, Humla-Poraag; Olangchung Gola, Taplejung-Riwa; Jumla-Penan; Mustang-Lizi; Larke, Gorkha-Tibet; Chhekampar,Gorkha-Tibet and Kimathanka, Sankhuwasabha-Riwa in a bid to boost trade relations with the northern neighbour.

Both sides have agreed to harmonise working hours at the customs of both sides. As per Regmi, working time harmonisation will speed up customs clearance processes. Due to lack of working hour harmonisation between Nepal and Tibet, traders are compelled to spend more time at the border for customs clearance. It is expected that travel time of cargoes could be shortened and the cost of trade will be minimised to some extent, which in turn would benefit traders and ultimately the consumers.

Nepal has also requested China to simplify the duty free quota free (DFQF) facility extended to Nepal by modifying the harmonised system code (HS code) of the products to six digits from eight digits. Nepal has raised the issue to narrow down the non-tariff measures imposed by the government of China so that Nepali exporters can reap the benefits of trade with China. China has extended DFQF facility for 8,030 Nepali goods in all tariff lines but trade deficit with China has been increasing every year.

Nepal imported goods worth Rs 100.17 billion from China against exports of Rs 2.23 billion in the last fiscal year, according to Nepal Rastra Bank’s data. To simplify the DFQF facility, both sides have agreed to form a joint technical team.

Likewise, on Nepal’s proposal of providing mutual recognition for quarantine certification of each other’s products, the Chinese delegation has expressed commitment to write to the Central Quarantine Authority for approval.

Nepal has urged Chinese exporters to mandatorily put labels in English or Nepali language on food and beverage items.

Nepal and China have also agreed to share information promptly to control unauthorised trade and utilise banking channel for payment in trade.

The next customs DDG-level talks will be held in Lhasa in 2016.