Experts today said that Nepal has not been able to reap the expected benefits after becoming a member of the World Trade Organisation (WTO).
Registrar of Kathmandu University Prof Dr Achyut Wagle, on the occasion, highlighted the increasing trade deficit every year and Nepal's inability to compete in trade as the main problems. He emphasised that such issues should be discussed continuously and that every policy and rule should be based on research and data.
Likewise, former vice chair of the National Planning Commission (NPC) and economist Prof Dr Biswo Poudel, speaking at a discussion '20 Years of Nepal's Accession to WTO' organised jointly by Kathmandu University School of Management (KUSOM) and the WTO Chairs Programme (WCP) today, echoed the sentiments, stating that world trade has not yielded the desired benefits for Nepal.
"Despite adopting open market policies, these have not contributed positively to Nepal's trade," he said, adding that the agriculture and energy sectors have particularly suffered from huge trade deficits.
Poudel also noted the significant role of India and China in Nepal's international trade and suggested that bilateral trade should gradually evolve into regional trade. Stressing the need to prioritise the industrial sector, as the service sector's share is increasing while both agriculture and industry sectors' contributions are decreasing, he said, that currently, agriculture and petroleum products account for 40 per cent of Nepal's total trade deficit.
Member Secretary of the NPC Dr Toya Narayan Gyawali, on the occasion, acknowledged some benefits from WTO membership but pointed out Nepal's failure to produce competitive goods, resulting in a high trade deficit.
He recounted Nepal's 34-year journey to WTO membership, which was achieved in 2004 as the 147th country. Despite being a least developed country, Nepal has struggled to leverage some benefits of WTO membership.
Gyawali mentioned that while trade policies were previously unpredictable and non-transparent, there has been progress with technical support and expanded market access. He also referred to a report prepared by the commission on the impact of Nepal's upgradation from a least developed country (LDC) and strategies for smooth transition.
Purbanchal University vice-chancellor Prof Dr Biju Kumar Thapaliya emphasised the importance of the supply chain in foreign trade. Highlighting Nepal's significant role in reaching the international market through auction market management and identifying buyers, Thapaliya noted that auction market management is a common issue for landlocked countries. He also suggested that Nepal needs to address it through geo-political discussions.
Executive Director of South Asia Watch on Trade and Environment (SAWTEE) Dr Paras Kharel, discussed the work done for trade facilitation since Nepal became a WTO member. He noted that both imports and exports have been encouraged due to trade liberalisation.
However, Nepal could not impose import duties due to various agreements, including bilateral treaties that exempted 50 per cent customs duty on rice. Kharel stressed that Nepal's exports cannot be competitive unless the domestic market improves, attributing the problem to a lack of production capacity.
Agriculture expert Dr Yamuna Ghale, on the occasion, stated that government agencies have not sufficiently discussed the pros and cons of WTO membership in international forums. Pointing out that poor institutional memory capacity has hampered negotiations and that Nepal's food security is weakening due to lack of production capacity, Ghale warned of potential crises if Nepal's food production remains under external control and highlighted the need for competitive export industries.
Immediate Past President (IPP) of the Confederation of Nepalese Industries (CNI) Vishnu Kumar Agrawal also noted that Nepal now has easier access to a large global market. However, he criticised the government for not fulfilling promises on export promotion and facilitation.
According to Agrawal, production and productivity have been adversely affected as export promotion programs are frequently included in the budget but fail to deliver results.
Under Secretary at the Ministry of Industry, Commerce and Supplies Liladhar Adhikari, stated that Nepal has failed to effectively promote Nepali products. He emphasised that being a WTO member implies consistent customs levels and suggested that priority should be given to domestic industry to expand trade by ensuring no higher tariffs are levied.
Adhikari concluded that Nepali products need to become competitive in the domestic market to succeed globally.
Kathmandu University School of Management (KUSOM) organises such discussions as part of its media and outreach programs under the WTO Chairs Programme (WCP).
Prof Dr Bijay KC, Dean of KUSOM, extended his heartfelt thanks to the organising committee, panel members, and participants, pledging to continue these discussions in the future.
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