Identifier
Created
Classification
Origin
06KATHMANDU688
2006-03-15 11:19:00
CONFIDENTIAL
Embassy Kathmandu
Cable title:
CHINA TO PROVIDE DUTY-FREE ACCESS FOR 500 NEPALI
how-toVZCZCXYZ0000 OO RUEHWEB DE RUEHKT #0688 0741119 ZNY CCCCC ZZH O 151119Z MAR 06 FM AMEMBASSY KATHMANDU TO RUEHC/SECSTATE WASHDC IMMEDIATE 0706 INFO RUEHBJ/AMEMBASSY BEIJING PRIORITY 4042 RUEHLM/AMEMBASSY COLOMBO PRIORITY 4310 RUEHKA/AMEMBASSY DHAKA PRIORITY 9388 RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 2293 RUEHLO/AMEMBASSY LONDON PRIORITY 3696 RUEHNE/AMEMBASSY NEW DELHI PRIORITY 9363 RHEFDIA/DIA WASHDC PRIORITY RHEHNSC/NSC WASHDC PRIORITY RUEKJCS/SECDEF WASHDC PRIORITY RUEAIIA/CIA WASHDC PRIORITY RHHMUNA/CDR USPACOM HONOLULU HI PRIORITY
C O N F I D E N T I A L KATHMANDU 000688
SIPDIS
SIPDIS
DEPT FOR SCA/INS
NSC FOR RICHELSOPH
E.O. 12958: DECL: 03/15/2016
TAGS: ECON ETRD ECIN NP
SUBJECT: CHINA TO PROVIDE DUTY-FREE ACCESS FOR 500 NEPALI
EXPORTS
Classified By: Charge John Schlosser. Reasons 1.4 (b/d).
CHINA EXPECTED TO LIFT EXPORT DUTIES ON APPROXIMATELY 500
ITEMS
--------------------------------------------- ------------
C O N F I D E N T I A L KATHMANDU 000688
SIPDIS
SIPDIS
DEPT FOR SCA/INS
NSC FOR RICHELSOPH
E.O. 12958: DECL: 03/15/2016
TAGS: ECON ETRD ECIN NP
SUBJECT: CHINA TO PROVIDE DUTY-FREE ACCESS FOR 500 NEPALI
EXPORTS
Classified By: Charge John Schlosser. Reasons 1.4 (b/d).
CHINA EXPECTED TO LIFT EXPORT DUTIES ON APPROXIMATELY 500
ITEMS
-------------- --------------
1. (SBU) On March 14, news media reported that China would
provide duty-free access to approximately 500 Nepali items,
on a non-reciprocal basis. This news comes in advance of a
three-day visit to Nepal by a Chinese delegation led by
Chinese State Counselor Tang Jiaxuan, beginning March 16.
Naindra Upadhyaya, Joint Secretary, Ministry of Industry,
Commerce and Supplies explained to Emboff that while the
final list of products to be granted duty-free access to the
Chinese market was not available yet, the list would include
items of interest for Nepalese exporters such as
agricultural, herbal (forest) and industrial products. He
added that the agreement would be finalized on March 16 by an
"Exchange of Letters."
DUTY-FREE ACCESS OFFERS LIMITED BENEFITS TO NEPAL
-------------- --------------
2. (C) Government officials and businessmen were not
optimistic that China's granting duty-free access to the
items would result in large gains for Nepal's economy.
Upadhyaya noted that most manufactured goods would need to
have value-added in Nepal to qualify for duty-free access as
most manufactured goods in Nepal were made of imported raw
materials. However, he commented that duty-free access to
the Chinese market would expand the potential for joint
ventures between Nepal, India, and China. Kush Kumar Joshi,
Second Vice-President of the Federation of Nepalese Chambers
of Commerce and Industry (FNCCI) and Chairperson of the
Nepal-China Non-Governmental Forum, opined that the trade
agreement was an effort by the Chinese and Nepalese
governments to regulate the majority of unauthorized trade in
agricultural and herbal products that occurred between Nepal
and the Tibet region of China. Joshi remarked that there was
some potential for Nepal to export manufactured construction
materials. However, he explained that the Government of
Nepal (GON) would have to establish more transparent
industrial policies on foreign investment and joint venture
regulations and improve transport infrastructure between
China and Nepal in order for Nepal to capitalize on the new
trade benefits. Rajendra Khetan, Vice President of the
Confederation of Nepalese Industries, stated that the trade
agreement was "more a gesture of goodwill from China" and had
"little substance" in terms of benefits to Nepal. He noted
that Nepalese products would not be competitive in the
Chinese market. However, China was interested in creating
more business opportunities in Tibet to divert Tibetans from
political activities.
COMMENT
--------------
3. (C) The granting of duty-free access should give a small
boost to China-Nepal relations. However, it likely will not
have a significant impact on Nepal's large trade deficit with
China because Nepali manufactured goods are not very
competitive in China and the amount of agricultural trade is
not substantial. The impending arrival of Tang's delegation
March 16 probably spurred China to grant duty-free access,
which Nepal has pursued for the past five years.
SCHLOSSER
SIPDIS
SIPDIS
DEPT FOR SCA/INS
NSC FOR RICHELSOPH
E.O. 12958: DECL: 03/15/2016
TAGS: ECON ETRD ECIN NP
SUBJECT: CHINA TO PROVIDE DUTY-FREE ACCESS FOR 500 NEPALI
EXPORTS
Classified By: Charge John Schlosser. Reasons 1.4 (b/d).
CHINA EXPECTED TO LIFT EXPORT DUTIES ON APPROXIMATELY 500
ITEMS
-------------- --------------
1. (SBU) On March 14, news media reported that China would
provide duty-free access to approximately 500 Nepali items,
on a non-reciprocal basis. This news comes in advance of a
three-day visit to Nepal by a Chinese delegation led by
Chinese State Counselor Tang Jiaxuan, beginning March 16.
Naindra Upadhyaya, Joint Secretary, Ministry of Industry,
Commerce and Supplies explained to Emboff that while the
final list of products to be granted duty-free access to the
Chinese market was not available yet, the list would include
items of interest for Nepalese exporters such as
agricultural, herbal (forest) and industrial products. He
added that the agreement would be finalized on March 16 by an
"Exchange of Letters."
DUTY-FREE ACCESS OFFERS LIMITED BENEFITS TO NEPAL
-------------- --------------
2. (C) Government officials and businessmen were not
optimistic that China's granting duty-free access to the
items would result in large gains for Nepal's economy.
Upadhyaya noted that most manufactured goods would need to
have value-added in Nepal to qualify for duty-free access as
most manufactured goods in Nepal were made of imported raw
materials. However, he commented that duty-free access to
the Chinese market would expand the potential for joint
ventures between Nepal, India, and China. Kush Kumar Joshi,
Second Vice-President of the Federation of Nepalese Chambers
of Commerce and Industry (FNCCI) and Chairperson of the
Nepal-China Non-Governmental Forum, opined that the trade
agreement was an effort by the Chinese and Nepalese
governments to regulate the majority of unauthorized trade in
agricultural and herbal products that occurred between Nepal
and the Tibet region of China. Joshi remarked that there was
some potential for Nepal to export manufactured construction
materials. However, he explained that the Government of
Nepal (GON) would have to establish more transparent
industrial policies on foreign investment and joint venture
regulations and improve transport infrastructure between
China and Nepal in order for Nepal to capitalize on the new
trade benefits. Rajendra Khetan, Vice President of the
Confederation of Nepalese Industries, stated that the trade
agreement was "more a gesture of goodwill from China" and had
"little substance" in terms of benefits to Nepal. He noted
that Nepalese products would not be competitive in the
Chinese market. However, China was interested in creating
more business opportunities in Tibet to divert Tibetans from
political activities.
COMMENT
--------------
3. (C) The granting of duty-free access should give a small
boost to China-Nepal relations. However, it likely will not
have a significant impact on Nepal's large trade deficit with
China because Nepali manufactured goods are not very
competitive in China and the amount of agricultural trade is
not substantial. The impending arrival of Tang's delegation
March 16 probably spurred China to grant duty-free access,
which Nepal has pursued for the past five years.
SCHLOSSER