ADB_book_18 April.qxp - Himalayan Document Centre - icimod

effects. Kathmandu Valley has a specialenvironmental problem of temperature inversion,due to which air pollutants do not disperse veryeasily (Tuladhar 2003). Unleaded petrol wasintroduced in the country only recently, and there isconcern about adulteration in the fuels available. Ifimproving the quality of fossil fuel to minimize thepresence of harmful substances is one aspect, thereis also a need for the carriers to be environmentallyfriendly. Many of the vehicles are in a very poor state,and these are responsible for a lot of the pollution.Another major problem is related to imports ofpesticides and toxic and harmful substances. Theirproper handling, use, storage, and transport arerelatively unknown at present. Some studies on theuse of pesticides have shown that few precautionshave been taken, and that pesticides could becomea public health hazard at any time (Pokharel 2003).While developed countries are introducing stringentregulations on many harmful and toxic chemicals,there is little monitoring of what is happening inNepal. Nepal’s weak monitoring and policingcapacity could make it an attractive candidate fordumping harmful and chemical substances, whosetoxicity may only become known after they are in thecountry. This is an important area and needs to begiven serious attention in light of the long and highlyporous open border with India.What about environmentally sensitive exports?So far Nepal has been fortunate because no majorexport consignment has been rejected onenvironmental grounds. Environmental standards inthe European Union (EU) and the US have becomehighly stringent and some aspects of this arediscussed in the next section. Discussions withdifferent experts 1 , have identified several current andlikely problems regarding exports to the EU:(i) Exports of woolen carpets to Germany wererequired (voluntarily) to have ecolabels.(ii) India imposed quarantine restrictions onginger exports from Nepal, and exports werefrequently stranded at the border because ofthe delay by India on pest risk analysis. Nepalcould not provide the necessary data to Indiain time for the analysis. Now the quarantineproblem on ginger has been solved.(iii) Italy recently returned a shipment ofChywanprash because of the presence oftoxic substances.(iv) Some concerns have been expressed aboutpesticides and other prohibited residues intea samples from Nepal.(v) Nepal honey is not in the open list of the EUbecause of an insufficient residuemonitoring plan and lack of legislation inNepal to control the quality of honey. Further,the considerable production by indigenoushoneybees is not recognized as “honey”under EU directives.There may be other cases, but very little of thisknowledge is in the public domain. Although the listis small so far, the lists of prohibited items in the USand the EU are very large, and care must be taken toensure that farmers and producers from Nepal arewell aware of these requirements. So far Nepal’sexports have been limited and therefore theproblems are also small. Some positivedevelopments in this respect have been the award ofOeko-Tex 100 ecolabel certificates to five Nepaliexporters to EU countries. There have also beenefforts to promote cleaner production measures inindustrial units, some of which are exporters(Adhikari 2004). Similarly the practice of organicfarming and integrated pest management is alsobeing encouraged. While these are positive signs,boosting Nepal’s future exports will require majorefforts to ensure that these are safe for theenvironment and humans, and meet the emergingstandards in different parts of the world.Trade and Environment-relatedExperience of Other CountriesKirchbach (ITN 2001) highlights a number ofinteresting points regarding trade-relatedenvironmental barriers. He points out that of 4,917products examined in world trade, only 24% did notface some kind of environment-related trade barrierin 2001. While the number of products is large, theirvalue as a percentage of total trade is only 13%. Eitherexporters are focusing their attention on restriction offree markets or these are mostly low-value productsof agricultural, forest, or mineral origin. About 90% ofthe barriers are concentrated in 44 products. Themost common ones are food items, plants, bulbs andcut flowers, boneless bovine cuts, large automobiles,trucks, smaller automobiles, motor vehicle parts,coniferous timber, natural gas, footwear, medicine,telephones, and wildlife products. Apart from straightbans on imports, these barriers can take manyforms—surcharges, internal taxes, advance paymentrequirements, transfer delays, quality control, priorauthorization, quotas, obligations to return usedproducts, and so on. Exports from less developedcountries have been subjected most frequently toenvironment-related trade barriers.What are the reasons for these barriers? Basedon a review of the provisions in the WTO rules, as1Dr. Krishna P. Pant, Senior Economist, Ministry of Agriculture and Cooperatives; Dr. Deb B. Shakya, Agro Enterprise Center, Federation of Nepalese Chambers ofCommerce and Industry (FNCCI); Mr. Ratnakar Adhikari, Executive Director, South Asia Watch on Trade, Economics and Environment (SAWTEE)Chapter 12: Environment and Trade187