ADB_book_18 April.qxp - Himalayan Document Centre - icimod

Future Implications for NepalIncreasing trade under stringentenvironmental conditionsThere is little doubt about the increasing value oftrade, both internally and externally, but trade cannotbe a panacea for all problems of underdevelopmentand how trade impacts different development goalsneeds to be studied continuously over time. Onlythen can appropriate policies be targeted to dealwith specific problems. The Nepalese economy hasbenefited immensely from growing internaleconomic integration permitting specialization andtrade between regions. It has also benefited fromincreasing external trade, which has made rapidstrides in recent times. However, Nepal’s trade islopsided from the point of view of limited exports,few markets, and a rapidly widening trade gap. Inaddition, due to increasingly stringent environmentalstandards by developed countries, Nepal’s exportsface serious market access problems. There is alsotough competition in some of the exports from otherSouth Asian countries that have many advantagesover Nepal.Improving quality of tradeWhile international trade is important and for manycommodities domestic markets may not providecomparable scales of demand, the poor quality ofdomestic trade is often reflected in internationaltrade as well. Not much importance has been givento the quality of domestic trade. In fact many of thesanitary and phyto-sanitary conditions can be evenmore appalling in domestic markets. Increasinginternal and international trade means greaterquality control at home also.Better understanding and awareness ofWTO requirementsNepal is a member of WTO and there is little point indebating this issue; now better understanding aboutwhat is expected from the traders in Nepal is needed.There are many ongoing discussion areas about this,some of them contentious. Nepal must do itshomework and prepare for each discussion well inadvance to negotiate in the country’s best interests.Improving technical standards andquality assurancesShrestha and Shakya (2002) and Sharma and Karkee(2004) both emphasize this point. The technicalrequirements for quality assurance have nowreached a level where many exporters not only lackthe skills, expertise, and the infrastructure to meetthem but do not really know what is required andwho to turn to for help. Cost considerations areanother set of critical issues. Experience inBangladesh and India, particularly in the fishingindustry, has revealed that compliance with qualitystandards not only requires substantial capitalinvestment but can also entail very high annualoperating expenses (Chaturvedi and Nagpal 2003).The Nepal Bureau of Standards and Metrology isthe national body for the development of Nepalesestandards, adoption of international standards,providing quality assurance, certification, inspection,testing, accreditation, and harmonization procedureswith the standards in Nepal’s exporting regions.Nepal has some 600 standards, but only five relatedto safety and public health in export trade aremandatory—the remainder are voluntary (Shresthaand Shakya 2002). Standards acceptability abroadand their enforcement domestically will be a majorchallenge for export efforts in Nepal as all the majorexporting countries are imposing increasinglystringent standards. The establishment of a SouthAsian Regional Standards Organization is a verypositive step, and Nepal should work with others tomake this organization well recognized andaccepted internationally.Compliance with MultilateralEnvironmental AgreementsNepal has signed and ratified many differentMultilateral Environmental Agreements. Some likeCITES and the Convention on Biodiversity have welldefinedfocal points, but others need stronger actionand monitoring. While multilateral environmentalagreements related international organizations willnot have the same effect as the WTO, environmentalstandards are expected to get much stiffer in thedeveloped countries (Chaturvedi 2003), forcingcountries like Nepal to take stronger action on thedomestic front as well. Developing the institutionalcapacity and resources to move ahead on thedifferent multilateral environmental agreementsneeds stronger attention.Trade-related Intellectual PropertyRightsThe five-year period allowed for countries like Nepalto introduce legislation and other measures to meetthe provisions of Trade-related Intellectual PropertyRights (TRIPS) is already at hand. Nepal has onlyrecently announced new laws regarding patents,copyrights, and similar. However, the broaderimplications of this agreement are still hotly debatedboth nationally and internationally (Boyer 2001,190 Environment Assessment of Nepal : Emerging Issues and Challenges