China is preparing to phase in zero-tariff treatment to 95 percent of Nepal's products without any conditions with the aim of helping Nepal boost exports and reduce the bilateral trade imbalance.
Addressing the inaugural ceremony of the South-Asian China Trade Fair 2010 at Bhrikuti Mandap on Wednesday, Chinese ambassador Qiu Guohong said that 60 percent of 4,721 categories of products would start to enjoy zero-tariff treatment within 2010.
"The treatment will be officially implemented after the exchange of letters between the two governments," the envoy said. He added that the trade imbalance resulting from the difference of the commodity structure still existed despite the constantly rising volume of trade between China and Nepal.
Currently, Nepal-China trade is totals around Rs 36 billion and Nepal suffers from a trade imbalance of Rs 32 billion. Nepal has been requesting China to extend zero tariff facility to address its growing trade deficit since 2003.
Organised by the Nepal China Executives Council, the four-day fair targets to increase intra-regional trade. More than 20 Chinese companies associated with hydropower, agricultural equipment, seeds, automobiles, medical equipment and construction materials among others are participating in the exhibition. Vice president Parmananda Jha inaugurated the fair amid a function.
On the occasion, Surendra Bir Malakar, president of the Nepal Chamber of Commerce, underlined the need to boost intra-regional trade among South Asian countries for the reduction of poverty and rapid economic growth. South Asia accounts for only 2.5 percent of global GDP.
"Intra-regional trade within South Asia remained modest at 4.8 percent in recent years compared to other economic blocs like the European Union and East Asia," said Malakar. He added that the main reason for this low intra-regional trade was the prevalence of non-tariff barriers among the member countries.
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