Weak Economic Diplomacy is a Constant Problem for Nepal's Regional and International Trade

Since more than a decade Nepal is constantly requesting with India to get facility of using the Visakhapatnam port for a better trade with the third countries. Almost in each of the bilateral meeting, Nepali side keeps the issue on table. India never says, 'No'. But till the date, India is not ready to materialize its words into action. One more time India has agreed to give the facility of using Visakhapatnam port during the premier Dr. Baburam Bhattari's visit in last month--October. Nepal is suffering from different problems, like congestion, in Kolkata and Haldiya ports.

In few many informal discussions, officials from Ministry of Commerce and Supply admit that Nepal is lacking the diplomatic effort to push India. This is just a reflection of Nepal-India trade issues. Keep in mind that, we have more than 50 years old Treaty of Trade and Transit with India.

Our Northern neighbor, China is constantly working on its part to upgrade the infrastructures in the border for more volume of trade between Nepal and China. In April 2010, China gave the zero-tariff treatment to the 3 hundred 61 products, which is almost 95 percent of Nepal's total products, to reduce the trade imbalance between two countries.

But where do we have the supply list, what China is expecting to import from Nepal? What China wants to export in Nepal, does china consider Nepal as a potential market for its quality products? Chinese Ambassador to Nepal Qui Guohong is emphasizing on establishing the Trade Areas and Special Economic Zones to vitalize the trade between two countries.

These two cases with our two neighboring countries show that both of them have their own economic diplomacy. What we lack here in Nepal is the sound economic diplomacy. We don't have a balanced approach to our neighbors when it comes to the economic diplomacy. There are enough cases of our unwillingness to maintain the balance. The Chinese pro-activeness in bilateral trade increment and India's cosmetic flavor in the political levels implicitly signify that Nepal do not have its own standard in the diplomatic level to enhance the trade.

The supply-side constraints of our country are understandable but what we are not acknowledging is the 'comfort-zone' of our diplomats towards widening the trade partners. This is the time to get one clear answer why Nepal is not being able to have a direct discussion with Bangladesh about the transit and at the same time why China gives grant to the military force of Nepal but any support to enhance the situation of industrial sector? These questions deserve the answers and answer is 'lack of economic diplomacy of country'.

Nepal has specifically three Commercial Ambassadors in India, Hongkong and Tibet. What our Commercial Ambassadors are doing over there and what is the reason behind government's initiation few months back to send the commercial ambassadors to Spain and Portugal? United States of America could have been one option to send the commercial ambassador or to any another country with which we have a significant volume of bilateral trade. The Trade and Investment Framework Agreement (TIFA) between Nepal and America, which happened this year, is one of the examples of Nepali side's recklessness while signing any agreement either it’s a bilateral one or a multilateral one. The TIFA is just a formality. Honorable ambassador to USA Dr. Shankar Sharma himself is a scholar of economic discipline but what happened while signing the agreement was embarrassing to any citizen of Nepal. Nepal has got not a single privilege from TIFA that other LDCs have not got already from USA.

Nepal entered into the World Trade Organization (WTO) membership in 2004. This forum is one of the most vibrant multilateral platforms for any country in the world. WTO negotiations are always stressful for country like Nepal which has the huge amount of trade with one country--India--with whom the WTO norms do not apply. Nepal's clear failure in economic diplomacy is not being able to revise the Treaty of Trade and Transit, 1960 with India.

Here arises a prominent question that why everything seems functioning and sound in the political level between Nepal and India but in diplomatic levels? This implies our failure on economic diplomacy. India's sound, favorable and supportive face is not the real, if it was it would have been ready to let Nepal and Bangladesh have a bilateral talk for their betterment. But it doesn't in practical term. Again it goes to the same bottle that we have very weak position in every way.

China's proactive approach to strengthen the bilateral trade is also within the circle of doubt. There are rooms which prove again that China's intention is not clear. It has given the zero-tariff treatment to Nepali products and at the same time helping to develop the dry port in Tatopani but this is just a rosy gift to Nepal. China has given the zero-tariff treatment for 4 thousand 7 hundred 21 products from different Least Developed Countries (LDCs). What China is doing with Nepal might be something but do we have any guts say no for that we don't need and tell them what our priorities are. We have the Currently, Nepal and China has Rs 36 billion trade and Nepal suffers Rs 32 billion trade imbalance.