Nepal | July 09, 2020

Stakeholders seek early implementation of BBIN MVA

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Kathmandu, August 11

Stakeholders have urged the government to put in more efforts to implement the BBIN (Bangladesh, Bhutan, India and Nepal) Motor Vehicle Agreement (MVA) as soon as possible.

Citing that implementation of BBIN MVA is crucial to diversify Nepal’s trade in the South Asian region and also ease trading activities, they have asked the government to coordinate with other member countries to execute the agreement.

Bangladesh, Bhutan, India and Nepal in June 2015 had signed a framework agreement for the regulation of passenger and cargo vehicular movement among these countries — MVA — in a bid to enhance regional economic integration through transport and transit facilitation.

The BBIN MVA allows vehicles in any member countries to cross borders without hassles along the agreed routes. In doing so, the MVA gets rid of the cumbersome process of transloading and allows the entry of vehicles all the way to inland container depot (ICD), thus mitigating border congestion and reducing both time and trade cost.

However, the BBIN MVA encountered a major roadblock when Bhutan failed to ratify the MVA thereby preventing the agreement’s entry into force. The other three countries are now exploring, with Bhutan’s consent, ways to move ahead with the agreement.

Against this backdrop, the South Asia Watch on Trade, Economics and Environment (SAWTEE), in collaboration with the Asian Development Bank (ADB) today organised an interaction to discuss the implications of the BBIN MVA for Nepal.

Addressing the event, Puspa Raj Kadel, vice-chairperson of the National Planning Commission, suggested conducting pilot programmes along certain routes for a few months, the experience obtained from which could be used to enhance the draft protocol of the MVA. “The MVA is crucial for expanding the trade relationship between member countries and needs to be executed soon,” he said.

Ronald Antonio Butiong, director at ADB, noted that the MVA would help reduce transshipment at the border, thereby leading to reduced logistics cost.

However, he mentioned that there are misconceptions about the MVA, which he hoped the workshop was able to clarify.

For example, the MVA implementation would not result in a ‘free for all’ in cross-border transport operations, as per him.

“The motor vehicle agreement has restrictions on number of permitted vehicles, allowable routes and border crossing points and technical specifications of vehicles. Foreign transport operators will also not be allowed to conduct domestic transport in the host country,” Butiong added.

On the occasion, Kedar Bahadur Adhikari, secretary at the Ministry of Industry, Commerce and Supplies (MoICS), emphasised that connectivity is Nepal’s priority and hence the ministry has advocated for implementation of the MVA after certain ambiguities in the agreement are clarified in the protocol.

Meanwhile, Rabi Shankar Sainju, former joint secretary at the MoICS, pointed out that the reduction in trade costs (through BBIM MVA implementation) could be as much as 30 per cent and recommended that a memorandum of understanding be signed to implement the BBIN MVA amongst three countries on a provisional basis.

“The BBIN MVA implementation could open avenues for alternative routes and ports for overseas trade and unhindered movement of cargo and passenger vehicles to third countries through India,” said Posh Raj Pandey, chairman of SAWTEE. Pandey also underscored that the ambiguities in the motor vehicle agreement can be and should be clarified in the protocol.

A version of this article appears in print on August 12, 2019 of The Himalayan Times.

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