Negotiations for a transit treaty between Nepal and China have been completed which means the pact can be signed during Prime Minister KP Sharma Oli’s visit to China which starts Sunday.

The signing of the transit treaty is high on the agenda as it will end total dependence on India for third-country trade.

Nepal has so far signed transit treaties with only two countries — India and Bangladesh. However, the pact with Bangladesh is not in practical use.

“We have concluded negotiations for a transit treaty,” said Rabi Shankar Sainju, joint secretary at the Commerce Ministry. “We have tried to ensure that the benefits to Nepal are not less than those provided by the treaty with India.”  

According to him, the draft treaty includes provisions under which China will provide points of entry and exit and not impose customs and other duties like under the Nepal-Indian Transit Treaty. “The entry and exit points will be finalized later through negotiations while preparing the protocol to implement the treaty,” said Sainju. The protocol is a subsidiary agreement which contains details about the procedures of transit.

Safeguard measures for the country providing transit facilities have also been inserted in the draft, said Sainju. As per the transit treaty with India, restrictive measures can be applied to protect public morals and human, animal and plant life, safeguard national treasures and safeguard the implementation of laws relating to the import and export of gold and silver bullion.

Experts described the planned signing of the transit treaty as a positive development and stressed the need to make transit through China operational. “A transit treaty with China at this juncture makes sense as China has planned to extend its railway network to the Nepal border within a few years,” said Purusottam Ojha, former commerce secretary. “Considering the long distance to Chinese sea ports, a connection with the Chinese railway system could make transit trade through China feasible.”

According to Ojha, an efficient transport network and simplified paperwork and information system will be essential to make practical use of the transit facility. He also said that the proposed transit treaty should not be less favourable to Nepal than the one with India because it would set a bad precedent.   

Another trade expert Prachanda Man Shrestha said that using Chinese territory for transit trade would remain as a backup option for now because of the great distance to the sea and other countries through Chinese territory.

“If the railway network is extended across China and can be connected to Nepal in a few years, using China for transit trade can be alternative to India in the long run.”

According him, having an alternative is really good even if it is not used immediately because it may become necessary for survival in the event of a blockade like that Nepal suffered recently at the hands of India.