WORLD TRADE WT/LDC/HL/12/Add.8
24October 1997
ORGANIZATION(97-4680)
High-Level Meeting onIntegrated Initiatives for
Least-Developed Countries 'Trade Development
COUNTRY-SPECIFIC ROUND TABLES: DOCUMENTATION
Nepal
Addendum
Documentation fortheRound Table Meeting forNepal.WT/LDC/HL/12/Add.8
Page2
CHECKLIST FOR THE NEEDS ASSESSMENT
A. Trade Policy
(a) What arethesectors thatyoubelieve haveunexploited orunderexploited export potential?
Asthesizeofthedomestic market islimited, emphasis hasbeenlaidonthegeneration of
exportable surplus inboththeprimary andindustrial sectors. Thepotential export-oriented sectors
areidentified asfollows.
(i) Hydro-power: Thehydro-power potential ofNepal isestimated at83,000 MW. Thispotential
isoneofthelargest intheworld. However, sofarNepal hasbeenabletoutilize onlyasmall fraction
ofthispotentiality. Itisreported thatonly0.3percent(253,043 MW) ofthetotalpotential havebeen
installed bytheendof1994/95.
(ii) Agriculture: Nepal isbasically anagriculture dominant country which accounts forabout 41per
centofGDP andprovides employment toover80percentofthelabour force. However, themain
aimoftheproduction hasbeentoachieve self-sufficiency onfood. There areconsiderable number
ofagriculture products having export potentiality likehighquality tea,lentil, niger seeds andsoon.
Therefore, export-oriented agriculture production planning hasbeenveryessential inNepal fromexport
potential point ofview.
(iii) Tourism: Tourism isthemajor foreign currency earning service industry ofNepal. Similarly,
itscontribution forthenation ingenerating employment opportunity isremarkable. HisMajesty 's
Government ofNepal isveryserious toincrease theflowoftourists intothecountry, which atpresent,
isabout 400thousand annually. HMG/Nepal hasimplemented aliberal tourism development policy
toachieve itsaimofattracting alarger flowoftourists intoNepal.
(iv) Mineral Resources: There aredifferent types ofmineral resources available inNepal. The
actual quantity ofreserve ofmany ofthese resources hasyettoberesearched. Theimportant mineral
resources available inNepal areLimestone, Marble, Talc, Magnesite, Zinc-Lead, Copper, Coal, Peat
andgas,Brine water (Salt), Slate, Boulder, Ironore,Dolomite, Semi-precious stones, etc.
(v) Other potential industries: Theexport-oriented industrial products likecarpet, ready-made
garments, paintings, handicrafts, silver andgoldjewellery, handmade paper goods, essential oils,leather
goods, dairy products, acrylic yarn, transformer, computer software, knitwear, vegetable ghee, tyres
andtubes, towels andsoon,havetobeseriously looked upon forquality improvement andmarket
diversification.
(b) Could youplease define yourcountry 'sperspective ofthereasons foranychanges inthe
structure anddirection ofexports andimports?
Themain reasons forthechange inthestructure anddirection ofexports andimports are:
(i) Changes andamendments inthenational policies aftertheadoption offree,openandliberal
economic policy in1990.
(ii) Effects ofchanges intheeconomic policies ofneighbouring countries.
(iii) Effects ofglobalization process intheinternational trade.WT/LDC/HL/12/Add.8
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(c) What have been theobjectives oftrade policy inthemost recent period, compared to,
saytwodecades ago?
Theobjective ofthetrade policy isofficially formulated as;
1. toenhance thecontributions oftrade sector tonational economy bypromoting international
trade withtheincreased participation oftheprivate sector through theimplementation ofanopenand
liberal atmosphere.
2. todiversify trade byidentifying, developing andproducing newexportable products through
promotion ofbackward linkages formaking export tradecompetitive andsustainable. Thisemphasizes
ontheneedfortheproduct diversification through thedevelopment anduseoftheproper production
methods, proper utilization ofrawmaterials, skilled manpower andsoon.
3. toexpand trade onasustained basistoachieve gradual reduction intrade imbalances. Itaims
atnarrowing thehugetrade deficit ofNepal.
4. topromote tradeincoordination withother sectors oftheeconomy. Itaimsatpromoting trade
through thecoordination andjointefforts ofallconcerned agencies likethegovernment, chamber of
commerce andindustries, product associations, research institutions, individual manufacturer, exporter,
trader, industries, tourism, agriculture, hydro-electricity, forestry, banking, insurance, transportation
andsoon.
(d) What aretheMinistries incharge oftrade policy matters, including formulation,
implementation,enforcementandmonitoring?Howiscoordinationmade?Whataretherespective
rolesoftherelevant Ministries (giveparticular attention totariff policies andother policies directly
affecting exports andimports ofgoods andservices)?
There arealargenumber ofministries responsible towork fortrade andtrade policy matters.
They havedeveloped working relations among them tocoordinate theirfunctioning. Before taking
finaldecision onanytrade andtrade policy matters theMinistry ofCommerce andother related
Ministry(ies) ordepartment(s) sittogether todiscuss onallaspects ofthesubject matter indetail. Such
coordination isalsomaintained through regular correspondence. Theconsensus reached thereby is
recommended totheCabinet through appropriate channel forthefinaldecision.
Abriefmention about theresponsibilities ofeachofthese ministries isasfollows:
(i) TheMinistry ofCommerce isprimarily responsible formaking andenforcing thepolicies on
commerce andtradeincluding theforeign trade. Theresponsibility anddomain ofthisMinistry runs,
interalia,asfollows:
1. Making andenforcing commerce policy.
2. Study, research andsurvey oninternal andinternational trade.
3. Making policy decisions onimport andexport tradeandconduct ofinternational trade.
4. Conduct offoreign trade.
5. Treaty andagreement relating tocommerce (andtransit), bilateral andmultilateral
intergovernmental trade negotiations.WT/LDC/HL/12/Add.8
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6. Contactforassistanceandcoordinationwithnational,regional,internationalorganizations
pertaining totrade andtransit.
7. Study andsurvey ondifferent means ofcarriage fortheconduct ofinternal and
international trade, andnecessary management forcheaper carriage.
8. Training todevelop capable manpower inappropriate areas.
(ii) TheMinistryofFinanceisresponsibleforthebusinessrelating,interalia,to:currency;banking,
insurance, revenue policy andplanning; revenue administration andcollection-customs, andtaxes
levied bytheGovernment fromtimetotime; general price policy; exchange andcontrol offoreign
currencies; control ofaccounts. Asthecustoms andtaxesmatters fallwithin thescope ofthisMinistry,
hence, itisalsoresponsible directly orindirectly fortrade related matters andpolicies.
(iii) TheMinistry ofIndustries isresponsible forthebusiness relating, inter alia,to:foreign
investment, promotion thereof andmatters relating thereto; promotion ofindustrial investment;
development andtransfer oftechnology; industrial promotion andprotection; patent design andtrade
marks.
(iv) TheMinistry ofTourism andCivilAviation isresponsible forthebusiness relating, interalia,
tourism industry andtourism promotion; trekking, mountaineering; development ofairtransportation
andother tourism-trade related service andissue.
(v) TheMinistry ofWorks andTransport isresponsible forthebusiness relating, interalia,to:
policy ondevelopment ofinland andwater transport; management oftransportation andcarriage by
landandsea.
(vi) TheMinistry ofLabour isresponsible forthebusiness relating, interalia,to:labour policy
anditsimplementation; study andresearch oflabour force andlabour market, anditsuse; contact
andrelation withnational, international organizations relating tolabour relations between workers and
management; employment service andlabour supply; trade union, social security oflabours; work
permit toforeigners; administration andmanagement oflabour.
(vii) TheMinistry ofSupplies isresponsible forthebusiness relating, interalia,to:thepolicy
onsupplies ofnecessary goods, anditsimplementation; market management andsupervision ofprice;
policy onfoodsupply anditsimplementation; regular andbalanced supply ofconsumable goods in
close coordination withtheMinistry ofCommerce.
(viii) TheMinistry ofAgriculture isresponsible forthebusiness relating, interalia,to:policy on
agriculture andagriculture production ingeneral; development andimprovement offood, cashcrops
andindustrial crops; agricultural engineering andsophisticated agricultural inputs; nursery and
development ofseeds; development ofdairyanddairyproducts; fishery; market andpricemanagement
ofagriculturalproducts,agriculturalinputsanddevelopmentofagriculturaltechnology;plantquarantine;
foodresearch, andalsoimport, saleanddistribution offertilizers andagricultural inputs.
(e) Howaretheprivate sector andacademic institutions associated withtheformulation and
conduct oftrade policy?
They areassociated inthefollowing manner:WT/LDC/HL/12/Add.8
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(i) Intheformulation ofthetradeandtrade-related policies theGovernment, ingeneral, consults
withorganizations/Boards likeBoards ofTrade, Export Promotion Board, Trade Promotion Centre,
Private Sector Business Associations andResearch Organizations.
(ii) Tariff Board -Itisconstituted torecommend totheGovernment ontariffpolicy onanadhoc
basis every yearbefore theBudget Session andisrepresented bybusinessmen, industrialists and
academicians.
(iii) Regular meetings anddiscussions between andamong concerned government, non-government
andprivate organizations andindividuals.
(f) What aretheinstitutions inyour country thatcanplayaroleinimplementation ofa
trade-related project atthelocal level? State their respective roles.
DepartmentofCommerceistheapexbodytoundertakekeyroleinNepalfortheimplementation
oftrade-related projects atthelocallevel. Forthisthedepartment hasfourfield-level offices andthrough
these offices theprojects areimplemented.
MinistryofFinanceisanotherinstitutionwhichisresponsibleforformalizingtechnicalassistance
totheprojects.
(g) What arethemain lawsandregulations dealing withtrade policy onexports andimports?
Please provide ashort description ofeach.
(i) Export andImport Control Act-1957 (Consolidated)
(ii) Income TaxAct-1974 (Consolidated)
(iii) Customs (sixth amendment) Act-1996
(iv) Foreign Exchange (Regulation) Act-1962
(v) Customs Regulations -1969
(vi) Export andImport Rules -1977
(vii) Foreign Exchange (Regularization) Rules -1963
(viii) Trade Policy -1992
(ix) Industrial Policy -1992
(x) Industrial Enterprises Act-1992
(xi) Foreign Investment andTechnology Transfer Act-1992
(xii) Black Marketing andOther Social Crimes Punishment Act-1975
(h) What arethemain instruments oftrade policy onexports andimports? Please elaborate
(e.g.onimport restrictions, thequestions might be:onwhat products arethere anyimport bans;
onwhat products arethere quantitative import restrictions; licensing requirements, etc;whatWT/LDC/HL/12/Add.8
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isthehighest tariff ratecurrently inuse;arethere anyexcise taxes, other "domestic" taxes that
areapplied differentially toimported goods, ortogoods ofatypethatareprincipally imported)?
1. Types ofduty
Customs duties areimposed onimported goods inaccordance withtherates mentioned in
column 4ofthecommodity classification inChapters 1to97under Sections 1to21ofNepal 'sCustoms
Tariff. Asageneral ruleadvalorem duties (calculated aspercentage ofvalue) areapplied. However,
averylimited number ofproducts aresubject tospecific duties aswell.
However usedvehicles alsoaresubject toanadditional dutyranging from10to25percent.
Excise taxes, according tocurrent legislation, apply onlytodomestically produced goods.
Theimport ofthose goods which aresubject toexcise taxinNepal aresubjected toacountervailing
dutyequal totheexcise taxthatisapplied tothedomestic goods. Theobjective ofthismeasure is
toprovide thesame treatment tonational andimported goods. There areonlyfiveexcisable products
inNepal -cigarettes andbidi,alcohol including liquor, beerandmolasses, televisions andvideo-decks.
Excise taxes range from 5to110percent.
2. General description oftheCustom Tariff Structure
Theprevailing basic customs tariff rates are5,10,20,30and80percent, andthere isa
significant number oftariff linesfree. However mostoftheimport items fallinthecustoms dutyslab
of10-20 percent. Theunweighted average customs dutyratesforimports was15.4percentin1981/82.
Itdeclined to8.8percentin1992/93 andfurther to8.2percentin1994/95.
3. Tariff quotas, tariff exemptions
There arenotariff quotas ineffect inNepal.
Currentlegislationprovidesforcertaintariffexemptionsandtariffreductions,whicharespecified
intheCustoms Tariff. Some oftheseexemptions andtariffreductions aregranted uponrecommendation
oftheconcerned body ofGovernment likeMinistries ofHealth, Education, Transport, Agriculture,
Water Resources, Tourism andsoon.Thefollowing exemptions areineffect:
(a) Duty isexempted ontheimports ofbooks.
(b) Customs dutyisexempted ontheimports ofequipment andvehicles forTrolley
Transport Development Project.
(c) Government runhealth projects aregiven afulltariff exemption ontheimport of
medical equipment.
(d) Import ofcoldstorage equipment forthepreservation ofagricultural products including
fishandfruit.
(e) Import ofalternative power development equipment.
(f) Highquality printed materials imported forthepromotion andpublicity oftheTourism
industry.WT/LDC/HL/12/Add.8
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(g) Duty isexempted ontheimport ofthrashing machine andhusk-machine (Pankhi).
(h) Duty isexempted ontheimport ofrawjute.
(i) Fullexemption ofcustoms duties isgranted ontheimport ofcrate forkeeping eggs
under Chapter 48.
4. Other duties andcharges specifying anycharges forservices rendered
Currently therearenootherduties andcharges imposed onimports. Nevertheless, theCustoms
Actof1962 andcustoms regulations provides theauthority totheCustoms Office tocharge forthe
services rendered.
5. Quantitative import restriction including prohibitions andlicensing system
Alltheitems except afewunder banned andquantitative restrictions arefreeforimport and
there isnoquota andlicensing system inthearticles asotherwise specified inbilateral trade treaty.
6. Licensing procedure
Importlicenceisrequiredfortheimportsofquantitativelyrestrictedproductsandforthepersonal
baggage exceeding allowance. Such licence isissued bytheDepartment ofCommerce.
7. Other border measures e.g.anyother schemes thathaveborder effects similar tothose ofthe
measures listed under (c)above
There arenoother border measures ineffect similar toquantitative restrictions.
8. Application ofinternal taxes onimports
Products imported intoNepal aresubject tothesalestaxandalocaltax.Bothdomestically
produced goods andimported goods aresubjected tothesame taxes.
Thepriorsalestaxratesof10and20percentwereunified ata10percentrateinthe1997/98
budget. HMG Nepal hasdecided toadopt theVAT policy from16November 1997. Thegroups of
goods andservices thatwillbeexempted from thesalestaxunder VAT areasfollows:
(a) Basic agricultural products
(b) Commodities ofbasic needs
(c) Liveanimals andtheirby-products
(d) Agri-inputs andequipment
(e) Medicines andhealth-related services
(f) Education
(g) Books, newspapers, other printed materials andpublicationWT/LDC/HL/12/Add.8
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(h) Cultural, artistic andcraftsmanship services
(i) Passenger vehicles andtransportation services
(j) Professional orcommercial services
(k) Other goods andservices
(l) Land andbuildings
(m) Bet,casino andlottery.
Municipalities inNepal currently levyalocaltransit taxcalled Octroi ,towhich mostproducts
aresubjected tothistaxirrespective ofwhether theyaredomestically produced orimported, witha
rateofonepercentofvalue. TheGovernment isconsidering theelimination ofthistaxaftermeasures
areadopted toreplace theconsequent lossofrevenue.
TheNepalese Government isconsidering theprompt implementation ofaValue Added Tax
thatwillreplace salestax,aswellasalltheexisting taxes onservices, including entertainment, hotel
andcontract taxes.
(i) IncaseyouareWTO Member orintheprocess ofacceding, howisyourcountry preparing
itself tocomply withtheWTO Agreements?
After aseries ofinternal discussions atvarious levels withconcerned people frompublic and
private sector institutions HMG/Nepal hastaken decision foraccession totheWTO.
HMG/N isaware ofthefactthatafterentry intotheWTO itisnecessary tomake required
changes oramendments intheexisting trade-related ActsandRules. Forthatpurpose necessary
cooperation fromWTO, UNDP andotheragencies isbeing sought fortechnical assistance. HMG/Nepal
hasestablished aspecial WTO Division intheMinistry ofCommerce andhassubmitted aproposal
tothelocal UNDP office foritsstrengthening. ThisDivision hasvarious consultative committees
which haverepresentatives from theprivate sector organizations aswellasconcerned ministries.
(j) What isthestate offamiliarity withtheWTO framework: -among government and
government-related agencies? -intheprivate sector?
Thefamiliarity withtheWTO framework isnotadequate inboththegovernment aswellas
private sector.
(k) What areyour technical assistance requirements withregard toyour compliance with
theWTO Agreements?
Thetechnical assistance requirements withregard toourcompliance withtheWTO Agreements
are:
(i) Expertise services onsubstantial andprocedural aspects related toWTO.
(ii) Training toenhance thehuman andinstitutional capacities inbothgovernment and
private sectors.WT/LDC/HL/12/Add.8
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(iii) National capacity build up.
(l) Inwhich specific areas oftheWTO Agreements doyouhave technical assistance needs
(e.g.market access, agriculture, rules (anti-dumping, subsidies, import licensing, rules oforigin,
safeguards, etc),TBT andSPS, services, TRIPs)?
Agriculture, Rules, TRIPs, TRIMs, Dispute Settlement, Textiles, Services, Multilateral Trade
Negotiations, Bilateral Trade Negotiations (insome cases), TBT, SPS, Competition policy.
(m) What isyourassessment ofyour existing trade analysis andnegotiating capacities, both
multilateralandbilateral,inareasalreadycoveredbytheWTOAgreementsandothertrade-related
areas, e.g.competition policy andtrade environment?
Somecapacityexists,however,orientationprogrammeshavetobelaunchedtomakethecapacity
further strong, andperfect from theWTO Agreements perspective.
B. Obstacles toTrade Expansion
Supply constraints, including institutional bottlenecks.
(a) What arethemain bottlenecks inhibiting thedevelopment ofsustained export capacity
ofgoods andservices (e.e.customs facilitation, freight charges, quality management, elimination
ofcumbersomelegalandadministrativeprocedures,paucityofhumanskills,accessatinternational
prices toimported inputs, orinadequate telecommunication, portandtransport facilities etc)?
(i) High freight charges -Asmajority oftheproducts thatNepal exports areofhighvolume low
value nature, theair-freighting proves tobeveryexpensive. Similarly, duetoherland-locked
nature, Nepal hastobearextra transport costforoutgoing orincoming consignment toand
from Calcutta portinIndia.
(ii) Lack ofquality management andcontrol system intrade. There islackoforganized quality
control andinspection system intradeinNepal. Asaresult ofthisthere exists widevariation
eveninthequality oftheproducts ofthesame line.
(iii) Inadequacy ofskills.
(iv) Inadequate portandtransport facilities -Duetothese problems thetraded goods cannotbe
delivered intimeandtendtobeexpensive comparatively.
(v) Land-lockedness -Theland-locked situation ofNepal often creates problems ofspecial nature
specifically intheareas oftransit andtransport which directly affects onthesmooth flowand
competitiveness ofthetrade ofthenation.
(b) Arethere anyinstitutional bottlenecks, which mayimpede theefficient conduct ofyour
country 'strade policies? Provide details. Forexample, what aretheproblems perceived bythe
different actors, e.g.exporters, producers, service providers (banks, insurance companies, qualityWT/LDC/HL/12/Add.8
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control,transporters,etc),professionalassociationsandMinistries?Areproblemsmainlyperceived
intheareaof:(i)human resources; (ii)management oftheinstitution; (iii)financial and
material resources; (iv)communication.
(i) Exporters 'problem
1. Shortage offinancial andmaterial resources likeconcessional preshipment financing.
2. Inadequate export incentives.
3. High transit andtransport costs.
(ii) Producers 'problem
1. Unorganized markets andmarketing system.
2. Shortage offinancial andmaterial resources.
3. Shortage ofhuman resources.
(iii) Service providers 'problem
1. Shortage offinancial andmaterial resources.
2. Inadequacy ofsecured policy.
(iv) Professional associations 'problem
1. Shortage offinancial andmaterial resources.
2. Inadequate coordination.
3. Shortage ofskilled human resources.
(v) Ministries 'problem
1. Shortage ofhuman resources.
2. Shortage offinancial andmaterial resources.
3. Lack ofmodern communication facilities likeE-mail, Internet.
(c) What arethemain bottlenecks toexport diversification ?
(i) Inadequate market information.
(ii) Shortage ofquality products.
(iii) Narrow production base.
(iv) Insufficient export incentives.
(d) Ifinvestment intheproduction ofgoods andservices isinadequate, what arethemain
reasons? Please elaborate them (e.g. structural constraints, difficulties inattracting foreign
investment, limited enterprise development, financing, lackofappropriate technology, etc)
(i) Absence oflongtermpolicy -Intheabsence oflongtermpolicy thepotential investors are
reluctant toinvest ontheassumption thatthequick change inthepolicy mayaffect theirinvestment
planadversely.WT/LDC/HL/12/Add.8
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(ii) Shortage offinancing -Duetothehighrateofinterest inthefinancing institutions thepotential
investor isdiscouraged toborrow money rather chooses tocancel orshorten theinvestment plan.
(iii) Inadequate infrastructure development -There aredifficulties inattracting foreign investors
duetoinadequatephysicalfacilitiesdevelopmentlikerailway,communication,road,electricity,banking,
insurance, airways andsoon.
(iv) Lackofappropriate technology -Improved technology directly helps intheincrease ofquality
production andservices. Since, thereislackofappropriate production technology, quality improvement
andservices inNepal. Theinvestment intheproduction ofgoods andservices hasnotbeensatisfactory.
(v) Absence oforganized system ofproduction andmarketing, insufficient quality control and
lackofpackaging technology.
(e) Isthere anational policy toencourage export-related investment opportunities? Please
elaborate. What arrangements areinplace forreviewing, drafting andnegotiating contractual
arrangements withforeign investors?
Yes,Industrial Policy of1992. According tothispolicy, exportable products fallunder the
national priority industry andenjoy many concessions inrespect ofincome tax,double taxation and
thecustom duty, excise dutyandthesalestaxexemption ofprocurement orimport ofallmaterials
required forproduction ofexportable products.
Foreign investment ispermitted under theIndustrial Policy aswellasForeign Investment and
oneWindow Policy andtheIndustrial Enterprises Act,1992. Foreign investment ispermitted upto
100percentownership inlarge andmedium scale industries.
Department ofIndustry withthecoordination ofIndustrial Promotion Board constituted under
thechairmanship oftheMinister forIndustry, isresponsible forreviewing, drafting andnegotiating
contractual arrangements withforeign investors.
(f) What arethemain obstacles tothetransfer, development andacquisition oftechnology?
Isthere anynational policy/strategy inthisarea? Please elaborate.
Obstacles -Thetechnology absorption capacity ofNepal islimited dueto:
(i) inadequate physical infrastructure;
(ii) shortage ofskilled manpower inmanagement;
(iii) limited domestic market;
(iv) limited natural resources.
Asregard totransfer oftechnology, there isForeign Investment andTechnology Transfer
Act,1992. According tothisAct,Foreign Investment isaccepted ininvestment share, equity,
reinvestment oftheearnings derived fromtheinvestment, investment intheformofloanorloanfacilities
andsoon.
Technology covers awiderange ofactivities suchastechnological right, specialization, formula
process, patent oftechnical know-how offoreign origin anduseoftrademarks offoreign origin.WT/LDC/HL/12/Add.8
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(g) What areyour technical assistance orother assistance needs with respect tosupply
constraints?
Technical assistance isneeded inthefollowing areas:
(i) Improvedtechnologyforproductionincreaseanddiversificationandqualitydevelopment.
(ii) Improved communication facilities andsystem (Information Technology).
(iii) Alternative transportation mode androute.
Trade promotion andtrade support services
(h) Doyourenterprises,especiallysmallmediumenterprises,experiencedifficultiesinexpanding
their exports? What arethese problems inthemajor export sector?
(i) Inadequate market information.
(ii) High transportation charges.
(iii) Lowquality ofproducts.
(iv) Shortage ofconcessional financing.
(v) Lack ofexposure totheimproved production methods andexport markets.
(i) Whataretheproblemsforyourenterprisesinobtainingreliableandup-to-dateinformation
onexport/import business opportunities?
TheTrade Information Service ofTrade Promotion Centre isnotadequately equipped with
themodern communication facilities likeE-mail/Internet, support services andtrained manpower to
execute itsfunctions andprovide service effectively.
(j) Canyour enterprises offer product ofinternationally acceptable design, quality and
packaging toforeign buyers? Ifnot,what aretheproblems?
Yes,insome industrial products, wecanofferproducts asperinternational demand. Whereas
inthecaseoftheotherindustrial products, thereisaneedforimproved technology andskilled manpower
tomeettherequirements.
(k) What problems other thaninterms oftrade policy, doyouanticipate indeveloping the
export ofservices (e.g.computer software, tourism)?
(i) Shortage ofadvanced technology.
(ii) Shortage ofskilled manpower.
(iii) Lack ofinfrastructure development.
(iv) Shortage offinancing.WT/LDC/HL/12/Add.8
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(l) What arethetechnical/professional problems encountered bytrade support institutions
(e.g.trade promotion council, chamber ofcommerce, exporters association, etc.)inyourcountry
inproviding their services toexport/import enterprises?
(i) Inadequate modern support services.
(ii) Shortage oftrained manpower.
(iii) Inadequate modern communication facilities.
(m) What problems anddeficiencies areexperienced byenterprises intheir international
purchasing andinventory management?
(i) Delay incommunication ofdecision.
(ii) Lengthy import orexport procedures.
(iii) Frequent change oftheconcerned staff.
(n) What arethepresent availability andarrangements fortrade finance facilities (e.g.export
credit guarantees, etc)? Arethere anyperceived deficiencies inthisarea?
Many financing companies andprivate banks areestablished. Themajor problem isthehigh
interest ratecoupled withthelackofspecific trade financing facilities.
There isnospecific provision forexport credit guarantee except forageneral guarantee system
granted bytheCredit Guarantee Corporation tobanks.
(o) What arethemain problems inthewayofimproving export/import management skills
ofyour business enterprises? Doyouhave training programmes inthecountry? What arethe
deficiencies?
(i) Inadequacy oftraining institution inthecountry.
(ii) High costinvolved intraining abroad.
(p) Does your trade representation service actively promote your trade? What arethe
weaknesses?
Yes,tosome extent, butwithmany weaknesses like:
(i) Poorly equipped Trade Information Service;
(ii) Inadequate dataprocessing facilities;
(iii) Shortage oftrained manpower;
(iv) Shortage ofmodern facilities forcommunication anddissemination.WT/LDC/HL/12/Add.8
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(q) Briefly describe your technical assistance needs intheareaofpromotion andsupport
services.
(i) Training ofhuman resources inareas suchasexport promotion, trade information, product
designing, export marketing, quality standards, price, export incentives andsoon.
(ii) Information technology facilities.
(iii) Regular supply ofup-to-date information.
(iv) Measures toreduce transportation cost.
(v) Quality improvement.
(vi) Market promotion.
Market Access
(r) What areyour main market access problems?
(i) Land-lockedness.
(ii) Inadequate market information.
(iii) Shortage offinancing. Please refertoreply under (s).
(s) What specific problems orbarriers, andinwhich countries, aremost troublesome for
your exporters?
(i) NoGSPtreatment given toNepalese woollen carpets inUSA.
(ii) Quota imposed oncertain ready-made garment categories intheUSmarket.
(iii) Non-receival ofGSPfacility inEurope forNepalese ready-made garments duetoproblem
related torules oforigin. According totheEUrules oforigin, animported product tobe
eligible forthepreferential treatment under GSP, musthavegoneminimum oftwostages of
processing. IncaseofNepal thefabric isimported from outside andstitched intogarments
i.e.onlyonestageofprocessing, therefore, isconsidered noteligible forpreference. However,
HMG Nepal hasapplied totheconcerned authority inEUforderogation.
(t) Regional andsub-regional trading arrangements (RTAs): please listRTAs towhich your
country belongs. Areyousatisfied with theperformance withthese RTAs? Please state the
problems ofeach. Doyouhave suggestions onhowtosolve these?
Nepal isoneofthemembers ofSouth Asian Association forRegional Cooperation (SAARC).
Thelaunching ofSAARC Preferential Trading Arrangement bySAARC in1995 andconverting it
toSouth Asian FreeTrade Area(SAFTA) bynotlaterthan2001, isabigventure bySAARC forthe
development ofintra-regional trade anduplifting theeconomy ofthemember countries. Sofarthe
performance ofSAPTA hasbeensatisfactory andlooking forward toseetangible results.WT/LDC/HL/12/Add.8
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(u) Arethere anyproblems inutilizing theexisting market access preferences, suchasGSP,
GSTP? Please state thenature ofproblems relating toeachofthese.
(i) Refer totheanswers toquestion (s).
(ii) With thedeepening oftariff cutsinthepostWTO, themargin oftariff preference available
under GSPhascome down affecting thepricecompetitiveness ofNepalese exportable products.
(iii) Nepal isnotamember ofGSTP.
(v) What areyour technical assistance needs withrespect tomarket access?
Inrespect ofmarket access Nepal needs technical assistance inthefollowing areas:
(i) Rules oforigin
(ii) Technical barriers totrade (TBT)
(iii) Sanitary andphyto-sanitary standard (SPS)
(iv) Generalized system ofpreference (GSP)
(v) Anti-dumping
(vi) Subsidies
(vii) Safeguard
C. Technical Assistance
(a) Totheextent thiskindofinformation iseasily available, could youplease briefly describe
what trade-related assistance youhave received over thepastfiveyears from bilateral and
multilateral sources andwhatproject/programmes arepresently under consideration inthisarea?
Nepal hasreceived andisplanned toreceive considerable number oftrade-related technical
assistance from different international sources. Theprominent projects areasfollows:WT/LDC/HL/12/Add.8
Page16
Agency Project Date
ITC 1.OnUruguay Round Agreement. Oct1996-Oct 1997
2.Quality management forexport. Oct-Dec 1998
ITC/UNDP/UNCTAD 1.Preparatory assistance forSAARC June1997
ITC/UNDP 1.Expand exports bySMEs 1994-1997
UNDP/UNOPS 1.Establishing partnership forquality
tourism1994-1995
1996-1998
UNDP/ESCAP 1.Mechanism forExchange of
Technology Information (METI)1994-1996
2.Programme forEconomic Reforms
through Enhanced Transport and
Communication Services1993-1995
ADB/UNDP 1.ASYCUDA 1996-1998
UNDP/UNCTAD
UNDP/ICAO
UNDP/ILO
UNDP/IMO
UNDP/ITU
UNDP/World Bank1.TCDC toexpand andstrengthen the
roleofFDIbySMEs indeveloping
countries ofAsia1996/97
UNDP/WIPO 1.Modernization ofIntellectual Property
Systems.1993-1996
UNDP/UNIDO 1.Women 'sProduction andMarketing
Cooperation.1992-1995
UNDP/ASEAN 1.Liberalization ofTrade Development 1994-1997
UNDP/IFC 1.Promoting andimplementing FDIinthe
AsiaandPacific.1997-1999
EU 1.STABEX Project. 1989-1994
WTO 1.National seminar. 1997
(b) Please summarize your technical assistance needs aswellasother needs asreflected in
thischeck-list. Please rank them interms ofpriority.
(i) Improved technology toincrease production anddevelop quality ofexportable agriculture
products, carpets, textiles andexport-oriented industries.
(ii) Training forhuman resource andinstitutional development.
(iii) Improved communication facilities andsystem (Information Technology).WT/LDC/HL/12/Add.8
Page17
(iv) Expertise services onsubstance andprocedural aspects related toWTO (refer toanswer to
thequestion A-1).
(v) Market research andstudies fortheexportable products.
(vi) Improved technology andmanagement system onservices sector.
(vii) Management information system.
(viii) Identify alternative transport mode androute.
(c) Inthelight oftheinformation youhave been abletoprovide sofarinresponse tothe
questions inthischeck-list, what types ofinformation are,inyour view, stillmissing orcould
beimproved upon? Inorder toassist youinproviding information would youneed technical
assistance?
No.
(d) Does your country have thetechnological capacity andhuman resources tomake useof
thenewinformation /communication technology toolssuchasCD-Rom, theInternet etc.? What
assistance would youneedtoenable yourcountry tousethese toolsinthecontext oftraining and,
more generally, inthecontext oftrade development?
Yes,butinaverylimited number andwithin verylimited institutions only.
Theassistance isneeded onthefollowing areas:
(i) Training forskilled manpower development through seminars, workshops, exposures
andsoon.
(ii) Establishment ofmodern information technology.
(iii) Infrastructure development.WT/LDC/HL/12/Add.8
Page18
Integrated Response
Technical assistance needs identified
inthequestionnaireOrganization Response
Inreply toquestion A(k):
Technical assistance requirements as
regards compliance withWTO
Agreements
Expertise services onsubstantial
andprocedural aspects related to
WTOUNDP UNDP iscurrently assisting HMG of
Nepal toinitiate thepreparatory work
(review ofpolicy andlegal
framework) fortheaccession toWTO.
WTO Assistance willbeprovided toNepal
inthecourse ofitsaccession process
totheWTO.
Training toenhance thehuman and
institutional capacities inboth
government andprivate sectorsIMF Inaddition toneeds identified,
assistance willbeneeded toimprove
balance ofpayments statistics. AFund
expert willsoonbegin asixmonth
assignment inKatmandu toassist the
authorities inimproving thequality
andcoverage ofbalance ofpayments
statistics, including trade account
items.
UNCTAD UNCTAD toprovide technical
assistance toNepal inthefollowing
areas:
(i)preparation ofbackground and
assessment studies
(ii)consultancy andadvisory missions
onspecific issues
(iii)capacity-building fornational
trade experts andtrade officials inthe
form ofindividual orgroup training
activities.*
*Funds arerequestedWT/LDC/HL/12/Add.8
Page19
Technical assistance needs identified
inthequestionnaireOrganization Response
UNDP UNDP hasjustformulated aproject
designed to:1)develop institutional
andhuman resource capacity inthe
areaoftrade policy formulation, and
2)improve technical capacities of
HMG ofNepal toconduct multilateral
trade negotiations andparticipate
effectively intheWTO membership.
Question A(k)(cont.) :
WTO -Athree-week trade policy course for
English-speaking Least-developed
countries willbeheld(1998 and
1999).
-National seminars ontheWTO
system willbeorganized (1998) in
selected Least-Developed countries
including Nepal.
-Seminars and/or workshops on
WTO provisions willbeorganized
(1998 and1999) forAsiaand
Pacific region.
National capacity build up WTO Please refertoWTO response above
*Funds arerequestedWT/LDC/HL/12/Add.8
Page20
Technical assistance needs identified
inthequestionnaireOrganization Response
Inreply toquestion A(l):
Technical assistance needs as
regards specific WTO Agreements
Agriculture WTO Please refertoWTO response toA(k)
above
Rules WTO Please refertoWTO response toA(k)
above
TRIPs WTO Please refertoWTO response toA(k)
above
TRIMs WTO Please refertoWTO response toA(k)
above
Dispute settlement WTO Please refertoWTO response toA(k)
above
Textiles ITC Please refertoITCresponse toB(g)
below
WTO Please refertoWTO response toA(k)
above
Services UNCTAD UNCTAD toprovide assistance to
develop endogenous national policy-
making capacity inareas ofdomestic
service sector policy andmultilateral
negotiations onservices.*
WTO Please refertoWTO response toA(k)
above
Multilateral trade negotiations UNCTAD Please refertosection A(k)above
WTO Please refertoWTO response toA(k)
above
Bilateral trade negotiations
TBT ITC Please refertoITCresponse toB(g)
below.
WTO Please refertoWTO response toA(k)
above
SPS ITC Please refertoITCresponse toB(g)
below.
*Funds arerequestedWT/LDC/HL/12/Add.8
Page21
Technical assistance needs identified
inthequestionnaireOrganization Response
Question A(l)(cont.) :
WTO Please refertoWTO response toA(k)
above
Competition policy WTO Information anddocumentation willbe
provided relating tothework being
undertaken inaccordance withthe
Singapore Ministerial Decision.
*Funds arerequestedWT/LDC/HL/12/Add.8
Page22
Technical assistance needs identified
inthequestionnaireOrganization Response
Inreply toquestion A(m):
Assessment oftheexisting trade
analysis andnegotiating capacities
Some capacity exists, however,
orientation programmes havetobe
launched tomake thecapacity
stronger, andperfect from theWTO
Agreements perspective.ITC Nepal willbenefit from theSAARC
regional project where alsoissues
pertinent tothenewmultilateral
trading systems willbedealtwith.
UNCTAD Please refertosection A(k)above.
UNDP UNDP alsointends toassist Nepalese
officials inelaborating optimal
approaches intheWTO accession
process, particularly inmaking an
inventory ofrelevant problems tobe
solved bothofinternal andexternal
nature. Inaddition, UNDP will
strengthen knowledge ofNepalese
official ofmultilateral trade
negotiations ’techniques andtactics in
order toimprove theirnegotiating
capacity, provide advice intrade
policy formulation, particularly
relating totheWTO accession, and
support theNepalese negotiating team.
WTO Please refertoWTO response toA(k)
above
*Funds arerequestedWT/LDC/HL/12/Add.8
Page23
Technical assistance needs identified
inthequestionnaireOrganization Response
Inreply toquestion B(g):
Technical assistance needs as
regards supply constraints
Improved technology forproduction
increase anddiversification and
quality developmentITC ITCprogramme design andadvisory
mission requested byGovernment of
Nepal andplanned forearly 1998.
Areas ofintervention already identified
include product adaptation and
development andstrengthening of
trade promotion bodies.
World Bank Agricultural sector:
Current activities support increased
production andproductivity in
agriculture through thefollowing:
(a)Irrigation project
(b)Road maintenance and
rehabilitation project
(c)Agricultural research andextension
project (d)Rural infrastructure project
Improved communication facilities
andsystem (information technology)ITC Nepal willbenefit from aregional
trade development project, where trade
information willalsobeincorporated.
Additionally ITCinitiated anetwork of
TPOs intheSAARC member
countries, which will,interalia,
include exchanging trade information.
World Bank Acurrent Telecommunications project
willprovide telephone service across
thecountry including rural areas; also
support totheregulatory agency.
Alternative transportation mode and
routeUNCTAD UNCTAD toassist inreviewing this
particular problem (taking intoaccount
theWorld Bank project).*
*Funds arerequestedWT/LDC/HL/12/Add.8
Page24
Technical assistance needs identified
inthequestionnaireOrganization Response
World Bank Multimodal transit andTrade
Facilitation Project: (initiated May
1997)
(a)build atBirgunj aninland freight
terminal facility forrailandroad
transport
(b)build atBiratnagar andatBhairawa
ITFforroadtransport
(c)procure essential equipment forthe
ITF,including acontain tracking and
information system
(d)technical assistance fortherelevant
ministries
*Funds arerequestedWT/LDC/HL/12/Add.8
Page25
Technical assistance needs identified
inthequestionnaireOrganization Response
Inreply toquestion B(q):
Technical assistance needs inthe
areaoftrade promotion andsupport
servicesWorld Bank Please refertoWorld Bank response
toB(g)
Training ofhuman resources in
areas suchasexport promotion,
trade information, product
designing, export marketing, quality
standards, price, export incentives,
andsoonITC Please refertoB(g).
Inaddition, anadvisory mission and
training event onquality management
forexport willbeheldearly 1998.
World Bank Please refertoWorld Bank response
toB(g)
Information technology facilities
Regular supply ofup-to-date
information
UNCTAD UNCTAD DataBaseonTrade Control
Measures andthedissemination of
information through CD-ROM
(TRAINS) willcontinue tobe
provided.
Measures toreduce transportation
costUNCTAD UNCTAD toassist inreviewing this
particular problem (taking intoaccount
theWorld Bank project).*
World Bank Please refertoWorld Bank response
toB(g)
Quality improvement ITC Please refertoITCresponse toB(g)
andabove
Market promotion ITC Please refertoITCresponse toB(g)
*Funds arerequestedWT/LDC/HL/12/Add.8
Page26
Technical assistance needs identified
inthequestionnaireOrganization Response
Inreply toquestion B(v):
Technical assistance asregards
market access
Rules oforigin WTO Please refertoWTO answer toA(l)
Technical Barriers toTrade (TBT) ITC Please refertoITCresponse toB(g)
WTO Please refertoWTO answer toA(l)
Sanitary andPhyto-sanitary
Standard (SPS)ITC Please refertoITCresponse toB(g)
WTO Please refertoWTO answer toA(l)
Generalized System ofPreference
(GSP)UNCTAD UNCTAD technical assistance
activities onGSPtobeextended to
Nepal.*
Anti-Dumping WTO Please refertoWTO answer toA(l)
Subsidies WTO Please refertoWTO answer toA(l)
Safeguards WTO Please refertoWTO answer toA(l)
*Funds arerequestedWT/LDC/HL/12/Add.8
Page27
Technical assistance needs identified
inthequestionnaireOrganization Response
Inreply toquestion C(b):
Summary oftechnical assistance
needs according topriorityIMF Please refertoIMFresponse toA(k)
Improved technology toincrease
production anddevelop quality
exportable agriculture products,
carpets, textiles, andexport-oriented
industriesITC Please refertoITCresponse toB(g)
Nepal willalsobenefit from aSAARC
sub-regional programme ontrade
development, which willinclude
detailed studies onagricultural
products andtextiles.
Training forhuman resource and
institutional developmentITC Please refertoITCresponse toB(g)
UNCTAD Please refertoUNCTAD response to
A(k)
WTO -Athree-week trade policy course for
English-speaking Least-developed
countries willbeheld(1998 and
1999).
-National seminars ontheWTO
system willbeorganized (1998) in
selected Least-Developed countries
including Nepal.
-Seminars and/or workshops onWTO
provisions willbeorganized (1998
and1999) forAsiaandPacific region.
Improved communication facilities
andsystems (Information
Technology)ITC Please refertoITCresponse toB(g)
World Bank Please refertoWorld Bank response
toB(g)
Expertise services onsubstance and
procedural aspects related toWTOUNCTAD UNCTAD toprovide assistance to
develop endogenous national policy-
making capacity inareas ofdomestic
service sector policy andmultilateral
negotiations onservices.*
WTO Please refertoWTO response toA(k)
andA(l)
*Funds arerequestedWT/LDC/HL/12/Add.8
Page28
Technical assistance needs identified
inthequestionnaireOrganization Response
Question C(b)(cont.) :
Market research andstudies forthe
exportable productsITC Please refertoITCresponse under
B(g)andB(q)
Improved technology and
management system inservices
sector
Management information system UNCTAD Please refertoUNCTAD response to
B(q)
Identify alternative transport mode
androuteUNCTAD Please refertoUNCTAD response to
B(g)
World Bank Please refertoWorld Bank response
toB(g)
*Funds arerequestedWT/LDC/HL/12/Add.8
Page29
Technical assistance needs identified
inthequestionnaireOrganization Response
Inreply toquestion C(d):
Technical assistance needs inthe
areaofinformation technology
including training ofhuman
resources
Training forskilled manpower
development through seminars,
workshops, exposures andsoonITC SeeITCresponse toB(g)
Establishment ofmodern
information technologyITC SeeITCresponse toB(g)
WTO Training willbemade onaccess and
useofinternet resource. CD-Roms
willalsobeprovided. Onecomputer
andaprinter willbeprovided bythe
WTO totheMinistry ofTrade and
Industry. Thisincludes alinkto
Internet. (1998)
Other agencies indicated awillingness
tocooperate withtheGovernment to
identify specific needs inoperational
terms andestablish priorities. Further
consultations withtheGovernment will
benecessary todevelop specific
projects andprogrammes andto
explore funding.
Infrastructure development Agencies indicated awillingness to
cooperate withtheGovernment to
identify specific needs inoperational
terms andestablish priorities. Further
consultations withtheGovernment will
benecessary todevelop specific
projects andprogrammes andto
explore funding.
*Funds arerequested