Nepal China Transit Agreement

11 Apr

While Nepal will focus on connectivity, the agreement allows for many concessions in Nepal. The transit protocol does not specify routes, allowing Nepal to choose viable routes. In addition, other dry ports and ports may be added without an amendment contract; and trucks with Nepalese plates can go all the way to Shigatse (Xigatse) Railhead to pick up goods. The agreement was signed on April 29, 2019 during Nepalese President Bidhya Devi Bhandari`s visit to China to participate in the second Belt and Road forum for International Cooperation. Ten months after the end of national judicial proceedings, Beijing has finally informed Kathmandu of the implementation of this agreement. This protocol will allow Kathmandu access to Beijing`s four seaports in Tianjin, Shenzhen, Lianyungang and Zhanjiang, as well as three dry ports in Lanzhou, Lhasa and Xigatse. According to the Nepalese authorities, the agreement allows the Himalayan country vital access to China`s sea and land ports for trade with third countries. Nepal, closed inland, depended entirely on India, which surrounds Nepal in three directions. Nepal and China signed an agreement on transit trade and nine other pacts on 22 March 2016. The second reason for this delay could be Nepal`s request to extend the Tibetan railway to Kathmandu. China wanted to negotiate the two issues separately. It has not been economically possible to extend the railway beyond Kyirong (China) without progress in trilateral cooperation with Nepal and India to make Nepal a transit point for access to the South Asian market by road. Both China and Nepal were aware that access to Chinese seaports would be costly for Nepalese traders without strong land service (railways and highways) and integrated checkpoints (ICPs).

Fourth, despite a transit agreement, China would prefer to limit the use of these roads or ports in Nepal because of the following concerns. It seems that the Chinese are comfortable with the BCIM corridor that connects Kunming to Calcutta (about 3,000 km) via Dhaka and Mandalay. According to media reports, China is also not happy to revitalize the entire SSR (Southwest Silk Road), which runs from Kunming to Oval-shaped Kunming via Kolkata-Katmandu-Lhasa-Shangri-La Kunming. It is thought that the Chinese do not want several trade routes to cross Tibet. When some Indian scholars proposed “the revitalization of the ancient tea and horse route, used since the 3rd century as a trade route parallel to the Silk Road… The Chinese rejected the proposal because it links the Tibetan capital, Lhasa, and Beijing does not want a direct link between Tibet and India. 23 It should be noted that the negotiations have taken a dramatic turn in favour of Nepal, with China providing additional facilities in Nepal immediately following the signing of the COMCASA agreement between the United States and India on 6 September 2018 and Nepal`s decision not to participate in the BIMSTEC military exercise proposed by India in Pune from 10 to 16 September 2018.