WORLD TRADE WT/MIN(96)/ST/92
11December 1996
ORGANIZATION(96-5260)
Original: English MINISTERIAL CONFERENCE
Singapore, 9-13December 1996
NEPAL
Statement byTheHonourable Fateh Singh Tharu
Minister ofCommerce
(Speaking asanObserver)
Iamhighly delighted fortheopportunity toaddress thisaugust gathering ofWTO Ministerial
Conference. Iwould liketoextend mysincere gratitude totheconveners oftheConference forthe
warm hospitality accorded tomeandmydelegation. TheGovernment ofSingapore deserves special
thanks fortaking alltheefforts inarranging thisConference.
Allofusareaware thatbeginning fromtheearlydecades ofthe1990s, therehasbeenadramatic
change inthegoverning philosophy oftheworld environment. Thepresent-day trend istoward global
integration. Themode ofintegration isreflected intheformofeconomic liberalization, marketization,
privatization, growing awareness towards environmental concerns andsoon.Especially aftertheend
ofthecoldwarduring themid-1980s, theglobal threat toworld peace atlarge hasbeendrastically
minimized. These phenomenal changes brought about ashiftfromthestrategic planning toeconomic
growth. Itisinthesame period when many independent nations surged forpolitical pluralism.
Ithink these phenomenal changes areinthemselves aclearindication oftheglobal integration
treating allthenations oftheworld asasingle unit.Thisgrowing awareness towards integration brought
about achange inthetrading pattern aswell.
Although efforts werebeing made tobring about timely changes intheGATT 1947principles
andfoundations, buttheycould notcatch upwiththechanging dimensions. Starting fromthedecades
ofthe1990s, change hasbeennoticed intheprotectionist policy ofthedeveloping countries. Slowly
there wasachange inthereduction oftariffs onindustrial products andquantitative restrictions.
Quantitative restrictions arebeing substituted through tariffication. Developing countries including
theleastdeveloped onesbegan toabandon theimport-substitution policy andtrade barriers arebeing
gradually lifted. Inthepresent-day world, multilateral trading activities havebeenexpanded tocover
theareas suchasintellectual property rights, trade inservices, trade-related investment measures.
Themultilateral trade negotiations heldinMarrakesh, Morocco, havebeenamilestone incatching
theworld sentiment onmultilateral trade negotiations.
Nepaleseeconomicactivitiesbeingprimarilydependentonagriculture,theinventoryofexportable
items isverylow.Anoverwhelming majority oftheexportable items areclassified aswoollen carpets,
ready-made garments, leather products, pulses, niger seeds andsoon.Theexport trade ofNepal is
further hindered byherland-locked position. Thus farNepal hasbilateral trade relations with
17countries. Although wehavetraderelations withtheEastern European countries butthecommercial
transactions arenon-significant. Thus notonlythecountry wisediversification oftrade butalsothe
product expansion/development hasalsobeenamajor problem forNepal. Further, owing totherugged
geophysical condition ofthecountry, thecostofcommercial transaction isveryhigh, andasaresult
ofwhich Nepalese foreign trade ismore confined withtheneighbouring countries.WT/MIN(96)/ST/92
Page2
Asalready mentioned theexport baseofNepal isnarrow duetotheproduction oftraditional
goods andacorresponding decrease insavings. Forexports wehaveopportunity forlimited goods
tothelimited markets. Among these goods also,quality improvement andindustrial production base
isnotuptothemark. Although wehaveidentified theprobable listsofexportable items butthe
development ofthese items hasnotbeentothedesired level. There hardly exists proper coordination
between production andcommercial sector. Furthermore, evenifwehavethepotentiality fortheexport
ofgoods,theexportregimeisnotwellmanifestedduetothelackofproperdevelopmentoftransportation
andother infrastructures. Inthisway,inorder todevelop theexport tradeinarather sustainable way,
wehavenotbeenabletoestablish proper backward andforward linkage.
After therestoration ofthemulti-party democracy inthecountry, thetrade policy hasbeen
further liberalized. Theimport andexport trade regime havebeenmore simplified bytheadoption
ofthedelicensingprocessexceptinafewsensitiveitems.Thetariffrateshavebeensignificantlylowered
soastofacilitate export andimport. Wehave, tothebestofourunderstanding, doneaway withthe
unnecessary control andrestrictions andhavesimplified theprocesses oftrade activities andmade it
more transparent. TheNepalese currency hasbeengranted fullconvertibility inthecurrent account.
Inthiscontext, itwould berelevant tomention herethatNepal isatpresent occupying an
observer status totheWTO. And, weareintheprocess ofgetting accession membership totheWTO.
Weunderstand thataccession willrequire ustobring ourtraderegime inconformity withtheWTO rules
andregulations. Thisinvariably demands regulatory andlegislative changes inawiderange oftrade
andtrade-related areas. Tothiseffect, wearedoing alotofpreparatory work backathome.
Iamoftheopinion thattheUruguay Round Agreements posebothchallenges andopportunities
forLDCs. There isapprehension among usthatwemight suffer fromthelossofmargin ofpreference
enjoyed byusinthepast, inmajor markets. Further, wewould berequired toimplement aseries
ofobligationsarisingfromtheUruguayRoundAgreements.AsIalreadymentionedthatwearesuffering
from severe constraints onoursupply capabilities ofexportable goods andservices. Iamafraid, in
thiscontext, wemight notbeabletotakefulladvantage ofnewtrading opportunities. Inthiscontext,
there isneedforadopting measures toenable LDCs toaugment theirsupply capacities ofexportable
goods andservices, market access andfulfilling theobligations arising from theUruguay Round
Agreements. Weonourpartfeeltheneedtocontinue andstrengthen national efforts towards economic
reforms andbuilding supply andcompetitive capabilities. Forthatmatter wewillberequiring adequate
assistance fromtheconcerned international andintergovernmental organizations torealize thepotential
benefits fromtheUruguay Round Agreements andintegrating ourselves intotheworld economy and
theinternational trading system. Inthisconnection, Iwould liketorequest theSingapore Ministerial
Meeting toadopt acomprehensive planofaction infavour ofLDCs toenable ustoovercome the
challenges andmaximize thefullpotential benefits oftheUruguay Round Agreements. Ofthevarious
measures, onecould bedeliberating onthepossibilities ofproviding thefacilities ofzerotariff tothe
imports ofproducts from theLDCs tothedeveloped countries.
Special anddifferential measures havebeenincorporated within theWTO Agreements. These
measures alone willnotbesufficient toenable theLDCs toovercome thechallenges. Thus, there
isneedforsupportive action towards promoting LDCs concerns through bilateral andmultilateral
assistance. Likewise, entry intotheWTO willrequire ustoaugment ourpolicy analysis and
policymaking capacity vis-à-vis WTO within thecountry sothatwewillbeabletoidentify whatmedium-
andlong-term liberalization scenarios areinourbestinterest. Forthisinitiation ofprojects focusing
onthepreparation ofcomparative policy studies arefeltimperative.
Iappreciate thegenerosity oftheWTO inencouraging theLDCs tojoinWTO, butourcapacity
todosoishampered byourlackofexpertise, limited export-base opportunities, complexities of
WTO rulesandthegapbetween requirement andlegislation. Therefore theimmediate needforNepalWT/MIN(96)/ST/92
Page3
regarding heraccession intotheWTO istheavailment oftechnical andfinancial support from the
international and/or intergovernmental agencies. Insome instances wefeeldefeated regarding the
provisions ofenvironment, competitive policy andsocial issues.
MayItherefore propose before thisMinisterial Conference thatthese concerns oftheLDCs
willbetaken careofexpeditiously infavour ofLDCs. Once again Iwould liketoreiterate herethat
Nepal ishighly desirous injoining theWTO, andweappreciate thegenerous consideration oftheWTO
forinviting Nepal inthisConference. Finally, Iwishagrand success oftheConference.