Nepal-China talk to address problems faced by Nepali traders

China has approached the Nepali government to hold bilateral trade talks as soon as possible in order to ease the tariff and transit related barriers on quarantine and customs, among others, that Nepali businesspeople are facing for a long time.

“The Chinese team has come to have a preliminary meeting in order to fix the third meeting of Nepal-Tibet Trade Facilitation Committee (NTTFC),” Naindra Prasad Upadhyay, joint secretary of the Ministry of Commerce and Supply (MoCS), told Republica on Sunday.

However, the two sides have not yet finalized the date for bilateral talk which will be held in China this time. The last meeting was held in Kathmandu in May 2011.

According to Upadhyay, the agendas for the meeting have not been finalized yet. “We will start working on agendas once we set the date for meeting,” he said. “There are chances that we would get invitation from China within this week with a date of the meeting.”

Nepal and China, in the second meeting of NTTFC, had agreed to ease the quarantine and transit issues.

However, Nepali traders have allegedly said that the government has failed to raise the issues that have reduced Nepal´s export to China. “Nothing substantial has been done to help improve Nepal´s export to China after the second meeting of NTTFC in 2011,” Rajesh Kaji Shrestha, president of Nepal-China Chamber of Commerce (NCCI) said. “There would be no progress this time as well. I am not hopeful.”

Upadhyay, who is also looking after the Nepal-China trade in the MoCS, said that he had discussed all the transit and quarantine related problems that Nepali business people are facing in the preliminary meeting last week. “I have raised the issues that are affecting our export growth to China,” Upadhya said.

A recent study on Nepal-China Trade conducted by a regional think-tank, South Asia Watch on Trade, Economics and Environment (SAWTEE), with the assistance of United State Agency for International Development (USAID), has said Nepal´s trade agreement with China has failed to uphold national interest. “The letter of exchange (LoE) signed between Nepal and China in May 2010 has turned out to be a barrier itself for the export growth of Nepal,” the report says.

Shrestha, complaining the government inefficiency to have a better negotiation, said that the Nepali business people were facing multiple problems in the border areas. “China definitely is a huge market but we can´t tap it until the transit and quarantine related issues are addressed,” he said.

According to Trade and Export Promotion Center (TEPC), trade deficit with China shot up to Rs 38.2 billion during fiscal year 2009/10 from Rs 11 billion recorded in 2005/06.

Nepal is ranked in 50 in the CRI

The Change Readiness Index (CRI) has ranked Nepal in 50th position out of total 60 countries. The ranking on three bases, economic, governance and social gives shows the readiness of Nepal's leadership, bureaucracy and political parties. The CRI prepared by KPMG International and the Overseas Development Institute (ODI) provides insight into which countries are better prepared to cope with change and take advantage of the resulting opportunities. The CRI captures government capability and the capability of a country as a whole - including the private sector and civil society - to manage and respond effectively to change. 

FNCCI, TiE sign MoU to bolster entrepreneurship

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) on Sunday signed a Memorandum of Understanding (MoU) with The Indus Entrepreneurs (TiE) to bolster entrepreneurship in the country by encouraging foreign entrepreneurs to start business here.
The MoU will pave the way for tapping ideas from global entrepreneurs and to use the network of TiE for entrepreneurial development in Nepal, FNCCI President Suraj Baidhya said.
Baidhya and Nikesh Sinha, charter member of TiE, signed the MoU on behalf of their respective organizations.
TiE is a group of successful entrepreneurs, corporate executives and senior professionals with roots in the Indus region. Started in 1992, it currently has 13,000 members, including 2,500 charter members across 14 countries.
"Nepal can benefit from the global connect program of TiE," Sinha said after signing the MoU. "The recent positive political developments and success of constitution writing process will create a favorable environment for investment in Nepal."
Larraine Hariton, special representative for commerce and business affairs of US Department of State, was also present in the MoU signing ceremony.
"This MoU can help identify promising entrepreneurs in Nepal and attract more international investors here," Hariton said, adding: "Time has come for the government of Nepal and private sector to work together in order to boost the country´s economy."

Developed countries agree to address LDCs woes multilaterally

The developed countries have pledged to work together with the least developed countries (LDCs) under the multilateral approach to advance and halve the number of LDCs by 2020.
The developed countries expressed such a commitment during the 13th United Nations Conference on Trade and Development (UNCTAD), which concluded in Doha, Qatar on Friday. They made such announcement after the conference strongly flayed their approach to deal with LDCs bilaterally, something which has weakened multilateral initiatives in recent years.
"The bilateral approach is a bias one," the Conference has concluded and urged the developed country to switch back to multilateral approach, referring that difference in size and capacity largely disables LDCs from enjoying fair say in bilateral deals. "Only multilateral approach can address the problems that the world is facing now," the 6-day long conference declared at the end of the meeting.
The conference adopted an outcome document termed as Doha Mandate, which was prepared after lengthy intergovernmental negotiation for months, to guide the global leaders for the coming four years to address the multitude of challenges facing the world. There are around 13 multilateral including the UN and more than 50 bilateral donor agencies working in Nepal.
Shanker D Bairagi, permanent representative of Nepal to the United Nations and Other International Organizations in Geneva, in his address as the coordinator of the LDCs highlighted the role the UN can play to address the global problems. Nepal is the chair of the all 48 LDCs and around 70 million people live under the extreme poverty in these countries.
“The conference helped to identify the structural constraints and vulnerabilities, and garner international support for addressing those constraints in the LDCs,” Bairagi said at the closing plenary of the conference.
Referring to the last minute agreements on a number contentious issues, Bairagi stated that the consensus in Doha was the manifestation of the collective commitment of the international community to work for a better future for all.
Bairagi expressed the hope that the conference´s outcome will contribute meaningfully in the process of implementation of the Istanbul Program of Action for the LDCs -2010, which envisions enabling half of the LDCs to reach the level of graduation from the LDC category by 2020.

WTO urges effective use of EIF

World Trade Organization (WTO), which initiated Enhanced Integrated Framework (EIF) to advance the trade of least developed countries by removing supply-side constraints, has warned that LDCs themselves were responsible to use the EIF to better address their weaknesses and utilize strengths.
Pascal Lamy, director general of the WTO, has asked LDCs to work themselves to fully utilize the EIF process.
“They have to use the EIF as a platform to solidify trade within their national development plans and priorities,” Lamy said in high level meeting in Doha, Qatar last week. He urged LDCs to leverage additional Aid for Trade (AfT) support to consolidate current efforts. Government of Nepal is also one of the recipients of the EIF facility.
The EIF is about placing trade as an engine of growth, poverty reduction and employment by creating a platform where demand and supply of trade-related assistance can be expressed and bridged. In Nepal, the Ministry of Commerce and Supply (MoCS) is implementing the EIF program. 30 out of the 46 EIF beneficiary countries have accessed for Tier 1 project funds for institutional capacity building to support National Implementation arrangements. Furthermore, four Tier 2 projects have been approved and an additional ten Tier 1 and 26 Tier 2 projects are in the pipeline.
Nepal is implementing the Tier 1 and is preparing to access for Tier 2 of EIF, which provides increased, predictable and additional funding on a multi-year basis. It helps build strategy for the national development -- Nepal Trade Integrated Strategy (NTIS) -2010, a blueprint to boost the export of the country was prepared under the EIF process.
The EIF will undertake its mid-term review later this year. “This independent process will provide an assessment of how the EIF has been delivering on its mandate,” Lamy said. “For the EIF to continue to deliver; it will need continued commitment from the LDCs and commitment from development partners as well on the sustainability of funding.” He further requested developed countries to invest in trade capacity.
Lamy also urged UN, World Bank, IMF, and the WTO to support these processes and LDCs. “LDCs are an integral part of the WTO and they stand to lose more than any other member if the current stalemate in the Doha Development Agenda is not resolved,” Lamy said, pushing for the earliest resolution of the stalemate.

Chinese red tape negating zero-tariff facility: Report

For long officials beleived zero-tariff facility pledged by China for 4,000 Nepali goods would boost the country´s export to the northern trading partner, but a latest study has reckoned that letter of exchange (LoE) that Nepal signed with China in 2010 itself has turned out to be a major barrier to export growth.
"Under the LoE, Nepali exporters are required to stringently comply with all relevant domestic procedures if they want to export their goods under duty-free facility. This has subjected Nepali traders to a vast bureaucratic maze, constraining our exports growth," reads the report.
The report based on a study conducted by South Asia Watch on Trade, Economics and Environment (SAWTEE) says that under the Chinese rules, only goods having local value addition of 40 percent in manufacturing country (Nepal in this case) can enjoy zero-tariff facility.
"The existing list of duty-free exportable items included in the bilateral agreement includes only one-third of Nepal´s exportable items to China. And unfortunately, even they are facing trouble in getting the facility," says the report. The report even notes that the Chinese government, despite all promises of favorable trading environment, has been imposing multiple tariff and non-tariff barriers.
The report lists out a number of hassles faced by the Nepali exports. Of them, major barriers to export are lack of information sharing, lengthy procedures, multiple paper works, and the lack of recognition of the Nepali quarantine certificates by Chinese authorities.
The report, which analyses Nepal-China trade keeping it in a bigger framework of the Nepal´s international trade, says that Nepal´s performance on trade with China is far worse than the country´s overall international trade.
For instance, Nepal´s export to import ratio in 2003/04 was 39.7 percent, while China´s was 22.2 percent. But by 2010/11, these fell to 16.3 percent and 2 percent respectively.
The report also sheds light on the flip side of bilateral trade with China and says that import from China was also not healthy for the economy, raising question over the quality of Chinese products.
The trade balance with China is not in favor of Nepal as the government has not been able to work efficiently even when it comes to following up on implementation of bilateral agreements.
"Even though existing bilateral agreement on Mutual Recognition asks the Chinese authorities to recognize food and other goods quality certification issued by Nepali labs, China has largely overlooked this provision," says the report.
Interestingly, the report also highlights poor road conditions and transport syndicates as another major hurdle to giving impetus to exports to China. It urges the government to take immediate steps to scrap transport syndicates.
The report also asks the government to work out a formal payment modality for bilateral trade and push China to include more items of Nepal´s export interest in the facility list, among others.
The report has identified 20 goods possessing high export potential in the Chinese market. They include vegetable, iron and steel, tea, juice and lentils. The report has suggested to the private sector to make serious efforts toward tapping potential of those products.
It has suggested to the private sector to brand products and urged the government to construct dry ports along the northern customs points to facilitate bilateral trade.

Intellectual Property Day marked

Concerned stakeholders have expressed worry over the government´s inability to implement laws related to protecting the intellectual property rights (IPR) in the country.
Representatives from different sectors shared their knowledge about the laws related to intellectual property and their practice in Nepal at an interaction program organized by Nepal Copyright Register´s Office (NCRO) in association with Society of Economic Journalists to mark the World Intellectual Property Rights Day.
The participants, who represented different sectors such as music, publication and production companies, expressed grave concern over the government´s inability to implement the existing laws on protecting the IPR.
“There is a massive misuse of IPR in Nepal though the laws of the country treat such activities as a criminal act,” Bisu Kumar KC, registrar of the NCRO said at the interaction. “IPR is not just an issue of morality and ethics, it is also a major instrument to establish the economic rights of innovators and producers.”
While there are no authentic statistics available in our country showing the benefit of protecting IPR, developed countries have seen significant gain in their gross domestic productions resulting from IPR protection.
The IPR day was first celebrated in 1970. Since then it is observed all over the world each year to respect the economic rights of innovators.