Both developed and developing members are, therefore, expected to do their homework and prepare themselves to come up with positions that effectively address their concerns, and at the same time, enable them to move forward with confidence that the WTO is about bringing developmental benefits through multilateral cooperation on trade issues. In this respect, in view of the less attention given to the concerns of the least-developed members, for example, the need to effectively ensure meaningful market access to developed- and advanced developing-country markets, and the impacts they are facing due to ongoing global crises, it is important that all members address their concerns. The least-developed countries (LDCs), as a group, have already developed their common positions on a range of multilateral trade issues, which they have also articulated in the 84-point declaration adopted by LDC Trade Ministers’ Meeting in Tanzania held from Oct 14–16. As an LDC member, Nepal’s interest lies in strategizing to negotiate in cooperation with other LDCs as most of the positions of the LDC group are of its interests. However, it is also crucial for Nepal to assess the LDCs’ positions in the light of its national context and set its national priorities for trade negotiations. Against the backdrop, the following issues should be Nepal’s priorities for the Seventh WTO Ministerial and the negotiations thereafter.
It is high time that we discuss our external and internal constraints, as well as the achievements and failures of the WTO system, making the consultation process as wide and participatory as possible.
First, Nepal should support the call for an early conclusion of the Doha Round of trade negotiations, which was launched in 2001 with promises to deliver developmental benefits for all members, including the LDCs. However, trade negotiators of the country need to demand that the early conclusion of the negotiations be in the interests of the LDCs like Nepal.
Second, Nepal should demand the removal of high tariffs on agricultural exports from Nepal since most of the products in which it has comparative advantage are these products. Though it might not be particularly of Nepal’s interest at present, if need arises it can also join the call for the elimination of trade distorting subsidies in agriculture that developed countries are giving. In the short run, subsidies keep prices low and are beneficial for a net importing country like Nepal. But we should not forget that this trend might harm us in the long run and we need to find a way out of it. Many countries in times of crisis have stopped exporting food items to other countries. We can take the recent example of India banning rice exports to other countries. Dar Es Salam Declaration calls for a restriction on food export ban and this should be reiterated at the forthcoming WTO ministerial.
Third, on the issue of Services, Nepal needs to join the call for the liberalization of this sector and demand the removal of restrictions on the movement of natural persons by implementing Mode 4 of General Agreement on Trade in Services (GATS). This is important for a country, which is heavily reliant on remittances. Similarly, it should demand for more liberal immigration regulations especially in the case of unskilled workers.
Fourth, Aid for Trade, mentioned in paragraph 57 of Hong Kong Ministerial declaration and which was expected to contribute to enable developing countries, especially least developed countries, to develop their capacities to expand trade has not been effectively implemented. Nepal can seek for the effective ‘operationalization’ of Aid for Trade. But, at the same time, we have to carry out needs assessment to claim for it.
Fifth, on the Intellectual Property Rights front, Nepal has a high stake. Being a country rich in biological diversity, we need to demand that ‘disclosure requirement’ be made an integral part of Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).This will not only help us prevent ‘biopiracy’ but also ensure benefit sharing arising out of the use of genetic resources and traditional knowledge to the real owners.
Sixth, the issue of preference erosion is gaining much importance now. Many LDCs get exemptions, partial or full, from a particular developed country’s tariff rates to help them incorporate themselves in the global trade regime. But once the DDA comes into force, these preferences will erode. Therefore, Nepal should join the call asking for other concessions including trade and non-trade measures to compensate for the losses from preference erosion.
Seventh, being a landlocked country, Nepal should demand for the effective implementation of Article V of the General Agreement on Tariff and Trade (GATT) on transit rights. It should also demand for speedy implementation of trade facilitation measures and commitment on funding to address its supply side constraints.
Finally, Special and Differential Treatment(S&DT), which was included in the DDA, has not been given much importance by the developed countries. LDC countries like Nepal should ask for Duty Free Quota Free (DFQF) market access for its products, which was committed by the developed countries at the Sixth WTO Ministerial in Hong Kong. This demand has also been included in the 84-point Dar Es Salaam declaration. In fact, the declaration goes beyond, asking for a duty free quota free access to 100 percent of LDC exports instead of 97 percent.
Apart from these issues, which need to be dealt with externally at the multilateral forum, we have a Herculean task of placing our house in order. Political turmoil, lack of proper investment climate and lack of our exporting capacities are hampering the utilization of market access opportunities that the WTO offers. The huge trade deficit implies that we have concentrated on imports rather than exports, which will definitely give a relief to customers in terms of price but cannot be a long-term solution. We need to build our export potential be it in the sector of goods or services. We also have not put the legislations in place nor created the institutional framework as per our commitments made in the WTO at the time of accession.
Whatever it is, one is bound to notice that whether it was Road to Cancun, Road to Hong Kong or Road to Geneva, it has always been a rocky and difficult one for a country like Nepal and other countries alike. It has already been a good five-and-a-half years of Nepal’s WTO membership but it is unfortunate that we have not been able to achieve much. Though the membership was obtained to ensure Nepal’s full and meaningful participation in the world trade regime through, among others, enhanced and predictable market access opportunities, the country still lacks the capacity to negotiate as per its interests with other members, and fully capitalize on measures and flexibilities available at the multilateral level, for instance, technical assistance and aid for trade. It is thus high time that we discuss our external and internal constraints, as well as the achievements and failures of the WTO system, making the consultation process as wide and participatory as possible.
(Writer is Program Coordinator, South Asia Watch on Trade, Economics & Environment.)
neelu.thapa@sawtee.org
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