Confusion due to lapses in procedure: Minister

Reiterating the ministry’s commitment to global trade regime’s rules and regulations and that the misalignments was a result of lapses in procedure but not of intent, industry minister Matrika Yadav today said that it has, though, created an avalanche of awareness.
Addressing an interaction programme organised Ministry of Industry, Commerce and Supplies (MoICS) and South Asia Watch on Trade and Economics and Environment (SAWTEE) to discuss Sanitary and Phytosanitary (SPS)-related international laws and practices which could impact agriculture trade, Yadav pointed out that despite the initial turmoil created by recent policy change by the government and its retraction, it has also created an avalanche of awareness. He also stressed the need to create awareness amongst the stakeholders regarding the issues related to World Trade Organisation (WTO) and other regional and bilateral agreements.
Considering the recent decision by the government to make pesticides residue mandatory for the fruits and vegetables imports and eventual withdrawal of the decision within 18 days and ensuing public reaction, the programme aimed at unknotting the issue. The main objective of the programme was to create awareness on SPS issues in agriculture trade and discuss measures that Nepal should undertake in moving forward.
On the occasion, industry secretary Kedar Bahadur Adhikari stressed the need to build legal, institutional and other mechanisms to regulate import as well export. He said that human resource is not a problem with the government but managing them properly is an issue. “We have reached a stage where all the basic framework have been set up and hence are in a state to leap frog and make rapid progress,” he said.
Likewise, chairman of SAWTEE Dr Posh Raj Pandey, on the occasion, stressed the need to build related institutions and coordination amongst the relevant government institutions. He said that being a party to international agreements we have to be mindful of both the rights and duties and, hence, this programme is to discuss the optimal way to protect plant, animal and human life while honouring the international, regional and bilateral agreements. He further added that we need to make an attempt to discuss this issue with relevant stakeholders to build consensus for the way forward.
Presenting a paper on ‘SPS measures in Nepal’s agricultural trade’, research director of SAWTEE Dr Paras Kharel highlighted the high degree of import dependency on India for agricultural and food products, indicating that any disruptions at the borders will have severe implications.
Calling attention to the ‘letter’ – allegedly sent by Indian Embassy in Kathmandu in response to Nepal’s policy change with regard to fruits and vegetables imports – he pointed out that it only talked about phytosanitary certificate, which, in reality, does not concern pesticides residue tests. His paper further delineated current sanitary and phytosanitary constraints such as lack of legislations, institutional inadequacies, human resources constraints, and most importantly, extremely poor state of testing facilities. Adoption of international standards for commodities that currently do not have standards, upgradation of laboratories, accreditation over the most important parameters and, ultimately, the mutual recognition agreements with the major trading partners, were pointed out as the likely way forward.
Emphasising the need to protect the consumers from pesticides residue risks, chief at the Plant Quarantine and Pest Management Centre (PQPMC) Dr Dilli Ram Sharma pointed out the lapses made by government while implementing the policy, particularly, the failure to notify the policy change in advance, six months being the legally binding international norms. He also mentioned that pesticides test on each consignment of perishable items is not infeasible but also unprecedented globally and, hence, procedures like screening, certifications, risk-based sampling must be adopted to ensure that trade continues as usual and consumer health is not compromised. He also informed that agriculture ministry and its other bodies is rapidly moving ahead with necessary changes and the upcoming meeting between National Plant Protection Organisations of India and Nepal will be taking crucial decisions on August 16 in addressing these issues bilaterally. 
Likewise, chairman of Forum for Consumer Protection Jyoti Baniya pointed out the lack of proper legislative framework as a key constraint, for example, Nepal has not promulgated new laws to replace the outdated Food Act and Import Export Act. Nepal is yet to come up with the much-needed Accreditation Act.
Joint secretary at the ministry Madhu Kumar Marasini pointed out the need to undertake more such consultations for strengthening out sanitary and phytosanitary regime so that consumer health interest are preserved and trade disruptions are avoided.
Similarly managing director at the Agriculture Enterprise Centre (AEC) under Federation of Nepalese Chambers of Commerce and Industries (FNCCI) Dinesh Parajuli pointed out the need to enhance awareness among farmers regarding use of pesticides, as well as, improving capacity of Nepali laboratories and human resource.
Other participants of the programme included officials from concerned department under MoALD, representatives from farmers’ associations, consumer and human rights activists, representatives from media, among others. They pointed out the need for equipped laboratories, internationally-recognised accreditation of laboratories, paving the way for mutual recognition agreements, and effective coordination between government agencies and other stakeholders.

Vegetable export potential largely unexploited

Nepal’s potential for vegetable exports remain largely unexploited, also due to proper coordination and harmonisation of standards between the Nepali and Indian SPS and technical standards, according to findings of field survey and wider consultations held with various stakeholders.
Presenting the findings, former commerce secretary and a senior consultant at South Asia Watch on Trade, Economics and Environment (SAWTEE) – that conducted the research – Purushottam Ojha pointed out the problems faced by Nepali traders at border crossings with India, including the produce not being able to meet the Sanitary and Phytosanitary (SPS) standards set by India.
“There isn’t proper coordination and harmonisation of standards between the Nepali and Indian SPS and technical standards," he said, at an event held during the launch of the finds held today. "Lack of integrated laboratories for quality certifications and the absence of mutual recognition of accreditation between Nepal and India have left the fate of Nepal’s fresh produce exports at the mercy of Indian customs offices," Ojha added.
He further added that non-tariff measures which discourage trade through the customs points have given rise to high incidence of informal trade. The research found that a huge amount of fresh vegetables were transported informally through the custom points.
Ojha also insisted on the importance of having proper measures related to Pest Risk Analysis (PRA) to make Nepali vegetables suitable for export not only to India but to third countries as well.
The study suggested measures needed to develop a concerted-action agenda that would need to be followed in order to address the problems related to exporting vegetables and establishing an effective linkage with export markets.
On the occasion, the experts discussed the export potential of fresh vegetables to India and other countries and the barriers to trade. The discussion was based on a research study carried out by SAWTEE with support from SAMARTH-NMDP at custom points in Bhairahawa, Birgunj, Biratnagar, Jhapa, Dhangadi, Mahendranagar and Nepalgunj.
Vegetable export was analyzed from the perspective of supply, demand and issues related to the market.
Similarly, program coordinator at SAWTEE Neelu Thapa, on the occasion, said off-season vegetables like bitter gourd, pointed gourd, sponge gourd, and mustard leaf, among others were preferred by Indian consumers for their better quality and could be sold at higher price in India. She further added that Bangladesh could emerge as a lucrative market for Nepali fresh vegetables but a high tariff rate of 25 per cent was a discouraging factor. At the same time, potential for exporting vegetables to countries in the Middle East was also encouraging, provided that Nepali suppliers were able to meet their strict sanitary and technical standards, she added.
Commerce Secretary Naindra Prasad Upadhyay, on the occasion, said that Nepal’s inability to meet technical and food quality standard hampered its fresh produce export potential. "Investment should be made to increase the productive capacity of vegetable producers and to improve infrastructure in terms of storage facilities and collection centers," he added.
SAWTEE chairman Posh Raj Pandey urged stakeholders to develop mechanisms so that Nepali products could comply with the technical standards set by importers.
Likewise, agriculture portfolio manager at SAMARTH-NMDP Srijana Rana highlighted the importance of vegetables in effective poverty minimization efforts in Nepal.
Federation of Nepalese Chambers of Commerce and Industry’s Agro Enterprise Centre chief executive officer Pradip Maharjan, Ministry of Commerce joint secretary Rabi Sainju, Post-harvest Management Directorate of the Department of Agriculture Programme director Shabnam Shivakoti and agriculture expert and various experts brainstormed on the occasion to improve the access of Nepali vegetables to cross border trade.

National sector export strategies and NTM survey on cards

Ministry of Commerce(MoC) and International Trade Centre (ITC), Geneva are working jointly to develop Sector Export Strategy(SES) of 4 products and conduct a large-scale survey on exporters’ experiences with Non-Tariff Measures (NTMs) in Nepal and destination markets. These products have been selected from the Trade Policy 2016 and Nepal Trade Integration Strategy NTIS 2016.
The ITC team accompanied with the focal point Mina Aryal from the ministry and the two navigators Dr Pradyumna Pandey from Ministry of Agriculture Development and Bimal Nepal from Trade and Export Promotion Centre (TEPC) presented the preliminary results of the sector consultations and NTM Business Survey today.
While chairing the programme, officiating secretary of the Ministry of Commerce Toya Narayan Gyawali said that development of Sector Export Strategy and survey on Non-Tariff Measures are in line the trade policy 2016 and these initiatives are instrumental to enhance Nepal trade capacity building and competitive strength which have positive impact in socio-economic prospects of Nepal.
To develop export strategy in a participatory way, 4 stakeholders consultations were already conducted as part of the first phase of the SES design process between June 20 and June 30 in different regions including Jhapa for large cardamom, Ilam for tea, Pokhara for coffee and Kathmandu for handmade paper and paper products. The stakeholder consultations in the districts were managed by the Trade Export Promotion Centre in close coordination with the Ministry of Agriculture Development. Some 120 representatives from various government agencies, private sector and development partners took part in the different consultations.
The consultation meetings presented the stakeholders with an overview of the strategy design process, analysis of the sector specifics, including production, international market dynamics, and markets requirements. It also initiated discussions on the major issues to be addressed as well as define core teams to work for the second phase of the strategy design process. The results of the in-depth participative diagnostic will serve to develop the national export strategies documents and to design detailed plan of actions for the next five years.
The consultation identified some key critical export constraints concerning supplies capacities and the business environment. They also discussed on market entry issues like non-tariff and para-tariff measures' barriers.
The discussions have helped build consensus around the opportunities and challenges of the private sector, as well as the public sector support services. "We have discussed at length our respective constraints to export large cardamom and identify new opportunities to develop our sector," said Nirmal Bhattarai from Large Cardamoms Entrepreneurs Association of Nepal during consultation in Birtamod. "We are looking forward the core team meeting to develop the plan of action with ITC assistance," he added.
Similarly, president of Nepal Handmade Paper Association Mohan Khrishna Manandhar, on the occasion, said the consultation had helped build momentum for concerted action. "The interactions between the various actors of the public and private sectors helped build agreement on common challenges and need for a national sector strategy to develop the handmade paper sector," he added.
The second initiative, the NTM Business Survey has interviewed over 350 Nepali exporters on the difficulties they face with regulatory and procedural obstacles to trade. Initial findings of the survey show that SPS/TBT requirements of destination markets and the related conformity assessment requirements like testing and certification are the main concerns of companies – especially those exporting agricultural products. Lack of adequate testing and certification facilities in Nepal has made exporting difficult for companies due to higher cost and additional time required for testing abroad, the participants noted. The NTM business survey will continue until August with a target of covering 600 companies. The survey results will feed into the SES development process.
The SES document will be a common principle document for public and private sector. Product specific market constraints related to export to India expressed during the consultations were been transmitted to the MoC to incorporate in the agenda of the recent bilateral meetings between Nepal and India at the secretary level," according to focal person and under-secretary at the Ministry of Commerce Mina Aryal.
The SES design process will produce a set of four endorsed, coherent and comprehensive documents that will serve as action-oriented blueprints for enhancing trade performance in each sector.
The ITC is the joint agency of the World Trade Organisation (WTO) and the United Nations (UN). The ITC assists small and medium-sized enterprises (SMEs) in developing and transition economies to become more competitive in global markets, thereby contributing to sustainable economic development within the frameworks of the Aid-for-Trade (AfT) agenda and the Sustainable Development Goals (SDGs).