If the Indian side responded positively, the revised trade treaty with special extra-duty and non-tariff barrier concessions for Nepal will come into effect from the same date. So far, India has continued to show apathy to Nepal´s call for signing the treaty that was signed during Prime Minister Madhav Kumar Nepal´s visit to New Delhi about six weeks ago.
"India has not given any particular date for signing the treaty yet. Hence, we are preparing to do so when the SMC convenes in the capital," said a senior official at Ministry of Commerce and Supplies (MoCS).
Nepal and India had put initials on the treaty amid mess and after removing a contentious provision of re-export of third country to each other´s territory on August 22. However, for the treat to come into effect, the commerce ministers from two countries need to officially sign the document.
Officials at MoCS believed that India might have pushed the signing ceremony down in its priority because the southern neighbor is intensively engaged in multilateral trade talks in recent weeks.
The revised treaty is an outcome of two-year long negotiations between the technical committees of the two countries. It provides additional facilities for Nepal, which, traders say, will give impetus to country´s export trade to the largest trading partner. For instance, India, in the new treaty to be valid for seven years, has agreed not to impose extra-customs duty and non-tariff barriers on Nepali goods. This is expected to boost Nepal´s exports to India.
Imposition of non-tariff and extra-customs duties, which debilitated Nepal´s competitiveness, has been badly affecting Nepal on the exports front. Sharp rise in consumption, on the other hand, has caused its trade deficit to widen to more than Rs 108 billion.
Likewise, the treaty also provisions India to support Nepal upgrade its laboratories and recognize standard certification -- something which will mainly relieve agro-traders. In the absence of standard accreditation, Nepali exporters were required to take their samples to Kolkata and wait for certification for at least a week. This used to affect exports of perishable items.
"The delay (in signing the treaty) has continued to cost our export trade dearly. This situation must end immediately," said Kush Kumar Joshi, the president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
SAFTA Ministerial Council to meet this month
Commerce ministers from seven South Asian countries are convening in the capital on October 28 to address problems faced in implementation of regional free trade area. While the ministers are expected to guide the technical committee to slash sensitive lists, which are impeding meaningful integration of trade in the region, officials said SAFTA Ministerial Council (SMC) is also hopeful of getting the regional accord on trade in services endorsed during the meeting.
To materialize this goal, the SAARC Committee negotiating on the accord is meeting in Kathmandu prior to the SMC meeting. "There are fewer issues to be hammered out. So we are hopeful that the accord will be finalized during this round of negotiation," said a source.
The technical team´s meeting will be followed by the meeting of Committee of Experts on October 26 - 27, which will also discuss on non-tariff barriers existing in the regions and ways to eliminate them.
If the negotiators finalized the accord on trade in services, the SMC will endorse it and forward it to the SAARC Summit, the highest body of the bloc, for approval and implementation.
milan@myrepublica.com
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