Treaties Concluded in Asia

On November 29, 1979, an agreement with Argentina gave Paraguay the use of a wharf at Rosario for the receipt of duty-free imports and exports. Paraguay also succeeded in appointing a customs representative for the free zone so as to control the flow of merchandise and administer Argentine customs requirements.

Because of all these successful negotiations with its neighbors, Paraguay has established the National Navigation and Ports Authority (Administración Nacional de Navegación y Puertos or ANNP), which administers the national warehouses and free zones at Río Grande do Sul, Paranagua, Santos, Buenos Aires, Rosario, Montevideo, Nueva Palmira, and Antofagasta.

In Latin America, as in Europe and Africa, regional organizations for eco-nomic cooperation play a vital role. Bolivia and Paraguay were both members of the Latin American Association of Free Trade (LAFTA), with the help of which they ensured their access to the international market. The Treaty creating this organization, signed on February 18, 1960, at Montevideo, speaks of the pro-gressive abolition of customs duties and quantitative restrictions among Member States within twelve years. The union, however, appeared to be most advanta-geous for Argentina, Brazil, and Mexico because they were relatively more indus-trialized than the other members. As a consequence, some members of LAFTA decided to create a more homogeneous and restrictive organization, the “Andean Group,” comprised of Chile, Peru, Colombia, Ecuador, and landlocked Bolivia.⁵¹³

territories, all materials necessary for the its power and well being. Afghanistan in turn was allowed to freely purchase and export to India all kinds of goods. The Treaty stated that no clearing duty would be levied in the Indian ports on goods exported by Afghanistan; any customs duties levied from Afghanistan would be reimbursed. The Anglo-Afghan Convention on Trade dated June 5, 1923, com-pleted the Treaty of 1921.⁵¹⁵It specified measures to attain the objectives fixed by the treaty and filled in some lacunae.

After the transfer of sovereignty resulting from the emergence of Pakistan, similar questions concerned the governments of Pakistan and Afghanistan, which signed a Treaty on March 2, 1965.⁵¹⁶Through it each State grants to the other freedom of transit for traffic to or from the territory of the other. It contains most of the classic provisions, such as exemption of all duties, taxes, and clauses con-cerning the means of transport and warehouse, which recur in such agreements.

Similar agreements were concluded by other Asian LLS. For instance, in order to facilitate their transit trade, Lao PDR and Thailand signed an agreement⁵¹⁷that guarantees freedom of transit or goods throughout both countries. The goods ben-efited from the rights and privileges of transit according to the principles and excep-tions provided by the Barcelona Statute. Lao PDR concluded two other treaties with transit neighbors Cambodia and Vietnam⁵¹⁸that contain similar provisions.

The first treaty between Nepal and India dealing with trade and transit was signed on July 31, 1950. It recognized without reservation the right of free tran-sit of goods through the territory and the ports of India.⁵¹⁹The treaty was rene-gotiated in 1960, 1971, and 1978.⁵²⁰In the beginning of 1989, the Nepalese and Indian governments held discussions and decided that the 1978 treaties would be

515See id.

516See for the text, Gopalakrishnan,supran. 385.

517See the Agreement Facilitating Transit of Goods, in UN Treaty Series, vols. 200 and 216.

518See Document E/CONF 46/AC 2/5, Annexes 9 and 10.

519 See generally Kishor Uprety, Le Népal. Economie et Relations Internationales (Harmattan 1985).

520Although the treaty seems liberal, most of its clauses have remained purely theoretical.

Several books dealing with this problem have been published in Nepal and India. See,in particular, N. P. Banskota, Indo-Nepal Trade and Economic Relations (B. R. Publishing Cy 1981); see also generally Uprety,supra n. Nepal’s demand for separate treaties for trade and transit was accepted by the Indian side in 1978. The Indo-Nepal Trade Treaty mainly dealt with the free flow of goods between the two countries. Its objectives were to promote, facilitate, expand, and diversify trade between the two countries. For those pur-poses, Nepal and India granted each other, unconditionally, treatment no less favorable than that accorded to third countries regarding customs charges and duties on export and export and import regulations. In addition, certain primary products were exempted on a reciprocal basis from basic customs duties and quantitative restrictions.

renewed when they expired on March 31, 1989, but in March, due to some thorny political issues that had surfaced between the two countries, renewal was post-poned.⁵²¹It was two years later, after the formation of a completely new Nepalese government in 1991, that the Indo-Nepal treaties were signed.⁵²²In general, they are similar to the earlier treaties: On a reciprocal basis, both countries agree to exempt primary products of the other from basic customs duty and from quanti-tative restrictions on imports. Both accord each other no less favorable treatment

Under the treaty the Nepalese government used its best efforts to exempt imports of Indian goods from customs duties and quantitative import restrictions “to the maximum extent compatible with their development needs and protection of their industries.” More-over, to foster the industrial development of Nepal, the Treaty provided for additional preferential customs treatment by India wherever the cost of production of exportable goods manufactured in Nepal with a Nepalese added value of 80 percent is higher than the cost of production in India. This treaty came into force on March 25, 1978, for a five-year period. After renewal it expired on March 31, 1989.

The Treaty of Transit also came into force on March 25, 1978, but it was for a seven-year term. The Treaty notably recognized Nepal’s need as an LLS for access to and from the sea to promote its international trade, and the need to facilitate traffic in transit through the territories of the contracting parties. Traffic in transit as defined by Article III of the treaty was granted freedom of movement across Nepal and India through agreed routes. Goods in transit were exempted from customs duties and other charges, except transport costs. The protocol to the Treaty named fifteen agreed points of entry at the Indo-Nepalese border for goods in transit and laid down transit procedures. The number of entry points could be extended by mutual agreement. Calcutta was designated as the seaport. Land for the required storage facilities at Calcutta was leased for 25 years by the Trustee of the Port of Calcutta to the Nepal Transit and Warehousing Company Ltd.

(NTWC), which had been established on September 15, 1971, as a wholly owned company of the Nepalese government that reports to the Ministry of Commerce of Nepal (Bulletin published by NTWC, 1974).

Under the Indo-Nepal Transit Treaty, Nepal could use both railway and road to trans-port goods from and to Nepal. It was allowed to use Haldia as well as Calcutta as a trans-port.

India agreed to provide Nepal with warehouses, sheds and open space for the storage of transit cargo. This Agreement also expired on March 31, 1989.

521India’s decision not to renew the treaties appeared to be related primarily to a decision of the Nepalese government to import armaments from the People’s Republic of China that India considered should have been bought from India. For detail seeK. Uprety &

K. Dahal, Nepal: Evolutionary Features of its Economic Relations: With Specific Refer-ence to Some Bilateral Treaties,paper submitted at the Seminar on International Law and National Development, Law Society, Kathmandu 1991.

522India signed two treaties with Nepal in 1991. The Trade Treaty, valid for five years, was revised and renewed through an exchange of letter on December 3, 1996. India agreed to provide access, free of customs duties and quantitative restrictions, to all articles manu-factured in Nepal except for alcohol, tobacco, and cosmetics. It was also agreed that Nepalese products manufactured in small-scale units would be extended parity equal to the treatment provided in the levy of effective excise duty on similar Indian products. The Indo-Nepal Treaty of Transit provides for port facilities for Nepal at Calcutta and speci-fies 15 transit routes between Calcutta and the India-Nepal border, and 22 entry/exit

than that accorded to any third country with respect to customs duties and other charges. Traffic in transit is exempt from customs duties and from all transit duties except reasonable charges for transportation. India agreed to provide ware-houses, sheds, and open space in the port of Calcutta for the storage of transit cargo from and to Nepal through India. Nepal may use road or railway for tran-sit. This treaty, renewed in 1999, is to remain in force until 2006.

All the bilateral treaties discussed above—a small sample of the hundreds in the field—show clear parallels with the multilateral instruments so far as defin-ing the regime for LLS is concerned. Imbued in those instruments are patterns that more or less reinforce the reciprocity principle. Interestingly, if the bilateral have been influenced by the multilateral agreements, it is also true that some bilateral agreements are more generous to LLS neighbors and provide more than multilateral treaties do. One weakness in all these treaties, however, is the lack of efficient mechanisms to settle disputes.

points along the border for mutual trade. Nepal-Nepal transit is also provided for. A renewed Transit Treaty signed on January 5, 1999, in Kathmandu liberalizes procedures for the transit of Nepalese goods. A Nepalese request for automatic renewal of the Treaty for further seven-year periods was accepted, but the Protocol and Memorandum to the Treaty, containing modalities and other points, would be subject to review and modifica-tion every seven years, or earlier if warranted. The Nepalese request for an addimodifica-tional tran-sit route to Bangladesh via Phulbari was accepted in June 1997. Operating modalities for the transit were worked out, and the route was opened on September 1, 1997. A review of the working of the route in March 1998 at Commerce Secretary-level talks in Delhi brought agreement on several relaxations of the operating modalities that had been requested by Nepal. These included the Nepalese request to keep the route open on all days of the week.