Bangladesh-Nepal PTA unlikely by end of December

https://thefinancialexpress.com.bd/trade/bangladesh-nepal-pta-unlikely-by-end-of-december-1608465695
The first Bangladesh-Nepal preferential trade agreement (PTA), which is slated to be signed by the end of December, but Nepali officials are doubtful about the deal as key issues remain unresolved.

On October 8, both countries held a commerce secretary-level meeting on trade and economical cooperation through video conferencing and proposed to sign the offer by the end of this year.

The accord gives preferential usage of certain products by reducing tariffs, but it will not abolish them completely.

“The probability of the pact being signed are receiving slim,” said an unnamed official of the Nepalese government.

Through the meeting in October, Nepal had proposed eliminating the other duty charges (ODC) and has put this near the top of the agenda as an integral condition for signing the preferential trade agreement, according to the official. The other duty charges are usually added as an indirect cost.

“But Bangladesh will not want to remove it. Less than fourteen days remain for the entire year to end, and we have not heard from the Bangladeshi side,” said the state who is involved with preparing the agenda from Nepal’s side.

Broom grass, spices, cabbage, tomato, kiwi, avocado, orange, lentil, pickles, snacks, carpet and dairy products are potential exports to Bangladesh.

"As Bangladesh can be an initial person in the World Trade Organisation, it really is permitted to levy other duty charges. After adding other duty charges along with the tariffs on goods exported from Nepal, total charges could appear to 130-132 per cent," the official said. “However they are not willing to remove it since it would impact the country’s revenue.”

Providing duty-free quota-free usage of Bangladeshi products without removing it on Nepali products will not benefit Nepal, according to officials.

“Not much progress has been made on the major issue raised by Nepal. We'd planned to summarize the agreement by the end of December, but Bangladesh has not made any move,” he said.

“Nepal will lose by signing the preferential trade agreement without eliminating the ODC,” another official from Nepalese government said. “Nepal has sent a draft of the conditions, but Bangladesh hasn't given feedback.”

Bangladesh has not yet signed minutes of the meeting as Nepal has sent the finalised minutes, he said.

On November 6-7, the technical committee met to finalise the list of products, text of the preferential trade arrangement and rules of origin. Both sides have exchanged the merchandise lists and so are reviewing them.

Bangladesh has been providing duty-free access to 108 Nepali products. Nepal has been urging Bangladesh to expand the list to cover major exportable items such as lentil, tea, coffee, large cardamom, broom, fresh fruits and pashmina, among others. Items not getting duty-free access have difficulties entering Bangladesh.

Earlier, at the commerce secretary-level meeting held in March in Dhaka, both sides had decided to sign a preferential trade arrangement by June, nonetheless it needed to be pushed back as a result of the coronavirus pandemic.

Nepal is seeking zero tariffs on goods listed beneath the agreement and removing the other duty and charge.

The preferential trade agreement can be one of the issues that the prime ministers of both countries wished to finalise immediately.

Bilateral relations between Bangladesh and Nepal have been moving ahead since the founding of Bangladesh in 1971. The two nations are separated by the Siliguri Corridor-a small stretch of territory of the Indian state of West Bengal lying between southern Nepal and northern Bangladesh.

Bilateral trade between Bangladesh and Nepal began to flourish after the Kakarbhitta-Phulbari-Banglabandha transit route arrived to operation in August 1997.

Source: https://thefinancialexpress.com.bd

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