KATHMANDU, 18th March – Nepal and China have agreed on the text of the Protocol to Transit and Transportation following a round of recent negotiations, six months after the two countries agreed on the final text of the protocol in Kathmandu. The landmark agreement, once it goes into effect, will allow Nepali traders and businessmen to use Chinese sea and land ports for third-country trade. The agreement, officially made during the third week of February following a series of corrections to the original text signed in September 2018, comes nearly three years after Prime Minister K P Sharma Oli signed the Transit and Transportation Agreement during his first visit to China since taking office.

The agreement will be effectively implemented once ministerial-level officials from both countries formally endorse the pact. Nepali officials say the signing will take place in April when a delegation led by President Bidya Devi Bhandari will travel to China on a four-day official visit. Bhandari is expected to participate in the second International Belt and Road Initiative in Beijing, a mega event to be chaired by Chinese President Xi Jinping. After concluding the final text last year, both sides completed a round of negotiations at the Chinese side’s request to revisit the document after the customs and quarantine declarations were merged into a single form by Beijing.

A senior official at the Ministry of Industry, Supplies and Commerce told the Post that the Chinese side had also expressed concerns about poor infrastructure in Nepal, particularly in the Rasuwagadhi transit point. Chinese representatives, the Nepali official who spoke on condition of anonymity said, had suggested that Nepali authorities should slow down the implementation of the protocol until it upgraded some of the transit facilities at the border. Reconstruction work in another major transit hub in Tatopani, which was damaged during the 2015 earthquake, is still under way and the trading point is expected to be fully operational by June.

One major hurdle to implementing the deal, according to the Nepali officials, is the upgrade and improvement of Nepal’s roads connecting China. Nepal also faces challenges from poor infrastructure on its side of the border, including maintenance of highways and construction of dry ports to park the imported and exported goods. Following the signing of the agreement in April, Nepal’s long dependence on India for third-country trading will come to an end, allowing Nepalis to trade from the Chinese sea and land ports. Oli had signed the Transit and Transportation Agreement in March 2016, following months-long Indian blockade at the southern border.

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