Haggling high in the Himalayas. Across Nepal-Tibet border trade is active - even unruly

German and American travelers inched their way through a herd of 6,000 sheep, holding high their camera bags and hand luggage to avoid snagging the horns. This was no ordinary border crossing, they mused. Here on the main trade route between Tibet and Nepal, tourist and backpackers regularly brush shoulders with farmers and itinerant businessmen, not to mention sheep.

On this particular day, the way was blocked by customs agents counting the animals one by one. It was the start of Nepal's Bada Dassain new year celebrations and the sheep were in demand for ritual slaughters and family feasts for the Hindu festival. A few miles down the mountain, men got into fistfights over who would take home the fattest ones.

For those traveling across the almost barren Tibetan highlands, with road elevations above 15,000 feet, the crossing into Nepal is the tail end of a spectacular journey. In under two hours of travel, the dirt road descends some 10,000 feet, beneath snowcapped peaks, past waterfalls, and through pine forests into the tropical valleys of northern Nepal.

During a final descent of several thousand feet, everyone must walk for an hour or more to reach the newly built Friendship Bridge at the Nepal border. This includes those suitcase travelers who paid a few hundred dollars each to sit for several days in modern Japanese tour buses during the trip from Lhasa, Tibet. Foreigners have been permitted to travel overland from China to Nepal since 1985 and several thousand made the trip last year.

For those in a hurry, there are shortcuts. Steep paths straight down the mountain bypass the road's switchbacks. Barefoot Nepalese porters carry bales of wool and rolls of carpets, as well as tourists' luggage, strapped to their backs. They step carefully on the jagged rocks and muddy patches, sometimes stopping to share water and rest wobbly knees.

If this is international trade, it defies the usual definitions. The unruly commerce that moves through the Nepal-China buffer zone between the towns of Zhangmu and Kodari forms the bulk of Tibet's trade with Nepal. Smaller amounts flow through 16 other passes in the Himalayas.

Much of the trade is unchanged from centuries past. Traditionally, wool and salt moved south from the Tibetan plateau and food and fuel went north from the lush valleys of Nepal. The trade has increased since Peking and Kathmandu reopened the border several years ago. Though Nepal is suffering a serious trade deficit with China and, so far, the new spurt in border crossing has done little to balance accounts.

The China-Nepal border straddles the world's highest peaks, including Mt. Everest (29,028 feet) and seven others over 25,000 feet high. With this geography, it's not surprising that the Nepal-Tibet trade is virtually unregulated.

Much of business is carried on through bartering. Five kilograms (about 11 lbs.) of rice buys one kilogram of wool, say traders, though the hard-driving Tibetans often hold out for seven kilos of rice. The sheep go for cash and fetch some 45 cents a pound at the border and 80 cents a pound in Kathmandu, 70 miles away.

There is little compulsion for traders to keep the government informed of their transactions. As in decades past, much of the trade today is controlled by a handful of Nepalese families.

Compared with commerce across the country's southern border with India, Nepal's trade with Tibet is well managed. With little government control, Indian consumer goods pour into Nepal - along with tens of thousands of Indian immigrants, many of whom have settled permanently on the Nepal side.

Nepal's whopping trade deficit with its neighbors, including China, is a problem the country can ill afford. The deficit reached $260 million in 1985, according to an estimate by the government's Trade Promotion Center in Kathmandu. The deficit has been growing steadily for 10 years and in recent years has exceeded the government's annual tax revenue.

Most of the loss is with India, but trade officials are also miffed that, while Nepal buys consumer goods from mainland China, the Chinese have virtually stopped buying the few items they had purchased from Nepal in the past. These include tobacco, linseed oil, timber, and raw jute.

China and Nepal recently renewed their 10-year trade agreement though some Nepalese say it's more of a friendship treaty, signifying the lack of any border disputes between the two countries, than a workable trade pact.

Unlike China's border with India, which is hotly disputed both east and west of Nepal, China's border with Nepal has been demarcated to the satisfaction of both sides. Once during the Cultural Revolution (1966-76) some zealous Chinese tried to move the border markers into Nepal, according to a retired Nepali official who helped negotiate the original agreement. But the problem was soon settled by reference to documents.

The new trade agreement may not be so successful.

``There's no mechanism or strategy for implementing that agreement,'' said a government official in Kathmandu. Both sides have promised to bring their trade into balance, but the prospects seem slim. There are few reasons why China should grant special favors to this small kingdom which is closely tied to India and remains suspicious of its communist neighbor.

The trade deficit consumes precious loan money and other development funds which Nepal is able to sqeeze out of international lending orgnizations such as the World Bank. It's a heavy burden for a developing country whose per capita income of about $150 a year is among the lowest in Asia.

There are some bright spots, however. Hundreds of Tibetan exiles are employed in carpet and sweater factories in the Kathmandu suburbs. Exports are brisk, and shops in Nepal are flooded with Tibetan handicrafts. Many of these are finding their way back into Tibet, to meet the region's growing tourist trade. Lhasa's bazaars are stocked with brassware, carpets, and other handiwork.

As in the past, the world's highest mountains have not stopped traders from making a living, though their governments may profit little from the exchange.