PTTA to facilitate in trade with east and north-east Asia

Kathmandu, Sept. 7:

 The signing of the Protocol of Transit Transport Agreement (PTTA) between Nepal and China Thursday night is believed to help the former in diversifying its international trade and facilitating trade with the eastern and north-east Asian countries.

The protocol has offered Nepal the right to access and use of four Chinese seaports – Tianjin, Shenzhen, Lianyungang and Zhanjiang - and three dry ports – Lanzhou, Lhasa and Xigatse - for trade with third countries.

Initially Nepal wanted the access to three sea ports and two dry ports.

The PTTA has finally provided an alternative to Nepal’s international trade route, ending the obligation to use the port in Kolkata – though Nepal has recently started using the port at Vishakhapattanam, a small size of trade is happening from there.

“Now we have access to additional ports as an alternative. They can be used in trading with the countries in east and north-east Asia,” said Rabi Shankar Sainju, Joint-Secretary at the Ministry of Industry, Commerce and Supplies (MoICS).

The Chinese route will also reduce the time to transport the goods up to the China-Nepal border.

According to Sainju, all four Chinese ports are at a distance of about 4,200 km to 5,000 km from Nepal’s northern border, and the goods can be transported to the border in three weeks while trading via Kolkata port takes more than two months.

If both the countries could create reliable infrastructure, including roads, railways and dry-ports at the northern border of Nepal, it would reduce the time and cost of importing goods from China and third countries, which would have a positive impact on the country’s business environment.

Sainju said that unlike in Kolkata, Nepal need not submit original hard copy documents at the Chinese ports, their e-copy would be sufficient.

“If needed, Nepal would also be allowed to use inland waterways in China. Therefore the agreement will give immense benefit to us in the long run,” he said.

However, to reap the benefits from the PTTA, reliable infrastructure is pre-requisite. Nepal must study about the reliability and competitiveness of the Chinese railway and road transport services as well as the overall time of transportation, said Kamlesh Kumar Agrawal, General Secretary of the Nepal Chamber of Commerce (NCC).

“I am hopeful that the protocol would stimulate cross-border infrastructure development. The agreement has ended the dependency on India and given us more option for trade. This is something to be joyful about,” he said.

Senior Vice-President of Nepal Freight Forwarders’ Association Sundar Dahal also said accessibility was the key hurdle in Nepal’s international trade with China and third countries.

“The government must work to develop reliable all-season infrastructure,” he said.

A consultative meeting on the PTTA between the two countries has given final shape to the draft of the much-awaited protocol.

Joint-Secretary of the MoICS Rabi Shankar Sainju and Director General of the Department of Transport Services of China Wang Shuiping had led the delegation of their respective countries to the meeting, which was the third in the series.

The second Consultative Meeting on the PTTA was held in Beijing in July this year.

Nepal and China had signed the landmark Transit Transport Agreement during the visit of PM KP Sharma Oli in 2016 when the country desperately wanted to diversify its trade in the wake of five-month long Indian blockade.

Published in The Rising Nepal daily on 8 September 2018.