WORLD TRADE WT/MIN(98)/ST/51
18May1998
ORGANIZATION(98-2034)
MINISTERIAL CONFERENCE Original: English
Second Session
Geneva, 18and20May1998
NEPAL
Statement Circulated bytheHon.Chiranjibi Wagle,
Minister forCommerce
(AsanObserver)
Itgives meagreatpleasure toaddress thisaugust meeting. Onbehalf oftheNepalese delegation
andmyown, Iwould firstliketoappreciate thewarm andcordial hospitality accorded tousbythe
Government ofSwitzerland. Iwould alsoliketothank theorganizers fortheexcellent arrangements
made fortheMeeting.
Iamveryhappy tonotethattheWTO system emphasises universal membership without
compromising thesystem 'sbasicrules, rights, andobligations. Thesuccessful accession ofmany non-
member countries isimportant totheWTO 'sability tomanage atrading system ofglobal proportions.
TheWTO intends toachieve aglobal order by2005 where there arenorestrictions onfreeflowof
goods andservices. Toachieve thisobjective, agreements onanumber ofareas areyettobereached.
TheWTO Members havetaken upthischallenge. Thelandmark Agreement onFinancial Services
achieved inDecember lastyearpoints tothelevelofcommitment among Members. Alsoin1997,
WTO Members agreed through theHigh Level Meeting ofLDCs onapathwhich willgiveimportant
impetus totheintegration oftheworld 'spoorest nations intothemultilateral trading system.
TheWTO Agreement embodies provisions conferring morefavourable treatment fordeveloping
countries, including special attention toLDCs, withaviewtocreating anenabling environment for
them. Wemust, however, takenoteofthefactthatitwould notbeeasyfortheWTO torealize its
goalatthecurrent level ofdisparity ineconomic andsocial conditions among developed and
least-developed countries. Ifthecapabilities oftheLDCs tocompete arenotdeveloped, itisvirtually
impossibletoattainaglobalorderenvisagedbytheWTO.Realizingthis,thefirstMinisterialConference
ofWTO declared itsconcern attheproblems ofLDCs, andagreed onsome concessions. However,
WTO 'sexpectation fromMembers toopenupnewmarket access opportunities forLDCs hasnotbeen
met.
Trade liberalization, which isanimportant aspect ofglobalization, istransforming people 's
livesaround theworld. Itisalsosparking anintense debate about jobs, incomes, social standards,
andtheenvironment. These issues raiseimportant questions about howwepursue legitimate economic
andsocial goals inanincreasingly integrated world. Thechallenge totheemerging "borderless world"
doesnotcome from thedebate about globalization andfreetrade butfrom theweakening domestic
support forit.Weneedtoaddress thisproblem.
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Onecannot, however, ignore therisksglobalization brings tothedeveloping countries. Among
theasymmetries ofglobalization isthefactthatliberalization oftheworld economy hasnotbeenvery
favourable forthepoorcountries oftheSouth. Thepresent mode ofliberalization tends toprejudice
thegrowth prospects ofdeveloping countries bydiscriminating against areasinwhich theycanachieve
competitive advantage. Newforms ofprotection against exports ofmanufactures fromtheSouth are
beingsought.Suchtendenciescreateproblemsfortheexportofmanufacturesfromdevelopingcountries.
Export ofmanufactured goods hasproved tobeanessential element ofeconomic development.
However, export promotion represents amajor problem forLDCs. Inmany countries, commodity
composition isinitself aproblem. Amajor partofexport trade concentrates inalimited number of
products which canbeexported toasmall number ofcountries. InNepal, forinstance, seven
manufactured products constitute more than90percentofexport earning. LDCs arealsofacing
challenges inthefieldofproduct development. Itisinthisareawhere foreign direct investment is
most needed. Various multilateral agencies could alsoplayanimportant roleinthisregard. May
Irecall herethattheNepalese delegation totheHigh-Level Meeting ofLDCs hadproposed the
establishment ofaglobal fundforexport development. Thisfundwould enable LDCs toundertake
product development inamore meaningful way. Inthiscontext, theWTO should endeavour towork
jointly withother regional andinternational agencies toinduce investment inLDCs asaresult ofnew
trade opportunities. Inviewofthereduced sizeofpreferential margin available toLDCs under the
Generalized System ofPreference, weshould alsostudy thepossibility ofpreferential tariff ratesin
aWTO preferential scheme which would beapplicable toLDCs only.
Trade relations ofWTO Members arebeing increasingly influenced byregional trade
arrangements. Such initiatives promote further liberalization oftrade. Infact,regional andglobal
trade aremutually supportive processes. Realizing this,members oftheSouth Asian Association for
Regional Cooperation (SAARC) havecommitted themselves totrade liberalization within theregion.
They aremoving frompreferential tradetofreetrade. IhopeallWTO Members willappreciate these
initiatives.
Letmebriefly outline thetrade policy regime inNepal. Asweintend toaccede totheWTO
inthenearfuture, wearedesigning ourpolicies accordingly. Nepal hasadopted thepolicy ofeconomic
liberalization since1990. After theintroduction ofthispolicy, thenumber ofindustrial establishments
hasrapidly grown, theaverage growth rateofvalue-added hasincreased noticeably, andtheshare
ofindustrial sector inthetotaloutput oftheeconomy isgrowing fast.Thereform measures havealso
beenhighly instrumental intrade performance. Major changes havealsobeenmade inthefinancial
sector toencourage private investments. Asaresult, substantial number ofbanks, financial institutions,
andcapital market organizations hasbeennoticed. Subsidies arebeing gradually reduced. Adoption
ofmarket-oriented policies doesnot,however, mean immediate totalliberalization. Inorder toprotect
thepoor, adequate safety netswillhavetobeprovided intheinitial phase. TheGovernment iswell
aware ofthisneed.
Weareatpresent finalising thememorandum offoreign trade regimes. Itwillbesubmitted
totheWTO Secretariat verysoon. Wehavereceived generous support from various organizations
forthepreparatory works onNepal 'saccession totheWTO. Iwould liketotakethisopportunity
toextend mysincere thanks totheWTO Secretariat, UNDP, ITCandUNCTAD forthesupport and
assistance provided tousinthisendeavour.
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