Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010products must be wholly produced in the country of origin or the value of non-originating parts used inthe manufacture of goods may be up to a maximum to 60 per cent of the FOB value of the product. The current average Chinese tariff rate on most of the exportable products of Nepal ranges from 10per cent to 35 per cent. However, Nepalese exporters often complain that the actual import tariff isnot known in advance and Chinese authorities do not share the tariff information. So, it is difficult toestimate the tariff and cost of goods to be expected in China.Import prohibitions are often imposed by China on grounds of public interest, environmental protection orin accordance with international commitments. Prohibited products may include some products of animalorigin, opium, mineral products, chemicals, rawhide, waste skin and leathers, used clothes, ash of preciousmetals, bare metals, used articles falling under HS section 16 and 17 (machinery and transport equipment).Under China’s foreign trade law, temporary import restrictions or prohibitions may be imposed. For example,China restricted some handicraft products from entering TAR between June and August 2009. The actualreason was never disclosed by the authorities concerned and also never known to the exporters. Thesepractices often hurt trade and undermine stable, predictable, and sustainable trade patterns.The GoN has proposed that China offer a preferential tariff rate on 497 products. So far, China has offeredpreferential tariff reduction on 278 products, for which a zero per cent tariff rate would apply. However, thereis no formal agreement as of yet. However, this preferential treatment of a zero per cent rate of duty alonewould not be sufficient for Nepalese products to gain and maintain market access in China. Besides tariffadvantages, Nepal needs to build up infrastructure for addressing China’s NTBs, applied standards, technicalregulations, certification requirements, and other trade impediments. For instance, Nepal cannot trulyenjoy the benefits from current preferential treatment because of rules of origin. Nepal’s limited productioncapacity in many product areas is a limiting factor and so are the infrastructural weaknesses and the difficultyin meeting the quality, safety, and technical requirements imposed by China.As of 2006, China granted duty-free market access to the following LDCs in the Asia Pacific region and for thefollowing product categories: Afghanistan (286), Bangladesh (87), Cambodia (418), Laos (330), and Myanmar(220). The tariff treatment accorded by China to exports of LDCs is as follows:Table 4.1Chinese Imports from LDCs in US$ Million in 2005Sector Total Dutiable Duty Free PercentageTotal 15,267.1 1,138.8 92.5Agricultural 672.7 672.5 0.0Non-agricultural 903.1 450.3 50.0Raw Materials 15.9 15.9 0.0Minerals/Petroleum 13,675.3 0 100.0NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT139