Green Hydrogen in Nepal: Unlocking a sustainable energy future

As the climate crisis intensifies, the global search for sustainable and clean energy solutions has become more urgent than ever. Marked by a steady rise in global average temperatures and increasingly erratic weather patterns, climate change has become the defining challenge of our time for all countries, including Nepal and the whole of South Asia.
A major cause of climate change is the global dependence on fossil fuels. Thus, to mitigate greenhouse gas emissions, it is imperative that countries transition to clean, renewable energy systems, earlier than later. In this regard, green hydrogen—produced via water electrolysis powered by renewable energy—has emerged as a potential critical enabler for countries worldwide to transition toward net-zero economies.
Nepal currently generates around 3,000 MW of hydropower, with plans to expand capacity to 28,500 MW within a decade through $ 46.5 billion in public and private investments. With hydroelectricity recognised as a priority sector by the government, there are credible grounds to foresee potential in leveraging surplus electricity towards making green hydrogen a transformative energy alternative. Additionally, specialised research institutions such as Green Hydrogen Lab at Kathmandu University has been working to develop necessary technologies to support this transition. This represents a major opportunity to engender clean industrialization domestically, diversify energy exports, and support a regional clean energy transition, according to South Asia Watch on Trade, Economics and Environment (SAWTEE).
Against this background, Senior Fellow at the Madhu Marasini and Economist at SAWTEE Prajol Joshi has prepared an issue note on “Green Hydrogen in Nepal: Unlocking a sustainable energy future”. To this, SAWTEE and the WTO Chairs Programme–Nepal at the Kathmandu University School of Management (KUSOM) jointly organized a stakeholder discussion programme to discuss the prospects of green hydrogen in Nepal, ongoing developments in the sector at global and regional levels, the challenges, and the way ahead.
In his trigger presentation Marasini, on the occasion, highlighted that energy today is more than just a resource; it has become a key tool in foreign policy and international trade. Energy diplomacy now plays a vital role in global political relations, highlighting the need for stronger coordination between nations.
Likewise, Team Leader of the Green Hydrogen Lab at KU Dr Biraj Singh Thapa emphasised that hydrogen continues to gain momentum globally, unlike in past energy transitions, Nepal is progressing in parallel with other countries, both developing and developed, in key areas such as research, human resource development, and other. "This presents a valuable opportunity for Nepal to build a hydrogen economy that reflects its specific needs and strengths."
Executive Director at the Alternative Energy Promotion Centre (AEPC) Nawaraj Dhakal remarked that green hydrogen is gaining attention in Nepal, with its inclusion in NDC 3.0 and the national budget. But awareness is still low. The government, academia, and private sector must work together to implement the policies to support adoption of green hydrogen with a clear roadmap.
Similarly, joint secretary at the Ministry of Forest and Environment Dr Maheshwar Dhakal said that green hydrogen has been included in Nepal’s NDC 3.0, signaling a shift toward sustainable energy and reduced reliance on imported fossil fuels. "Strengthening academic collaboration by Nepali Universities with Universities in China and India can support and accelerate progress through shared knowledge and research," he added.
Executive Member of the Independent Power Producers’ Association of Nepal (IPPAN) Suman Joshi, on the occasion, stated that government needs to subsidise backward and forward linkages and processes for the promotion of green hydrogen within Nepal. "That will greatly encourage private sectors to invest in green hydrogen as it can also be considered a value addition to hydropower generation," she added.
Joint secretary at the Water and Energy Commission Secretariat Sandip Kumar Dev said that to build public awareness and trust towards green hydrogen, we need to demonstrate real projects, at least through pilot projects. "The government must create supportive environment for encouraging the private sector to make investments in the sector," he said.
Likewise, vice chancellor of Kathmandu University (KU) Prof Dr Achyut Wagle stated that KU, as an academic institution, is ready to play its role in developing necessary human resources and technical innovations. "We aim to partner with utility companies, municipalities, and the private sector to drive component-based projects, despite technical challenges," he added.
Chair Emeritus of SAWTEE Dr Posh Raj Pandey concluded the programme by stating that there is a need to assess the supply and demand of green hydrogen to better understand its eco system. He further emphasised the need to be aware of hydrogen leakages while developing the ecosystem.
Participants included policymakers, academics, journalists, energy experts, industry stakeholders, and members of civil society.

Nepal marks 20 years in WTO: Experts highlight trade deficit and lack of competitive edge

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.

WTO members agree to extend TRIPS transition period for LDCs

 The global trade regime members agreed to extend until 2034, July 1 the deadline for least developed countries (LDCs) to protect intellectual property under the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The members reached consensus on the 13-year extension of the current transition period, which was set to expire on 2021, July 1, at a formal meeting of the TRIPS Council on June 29, acording to a press note issued by the WTO.

Since the inception of the TRIPS Agreement, LDCs have benefitted from an extended transition period to apply provisions of the TRIPS Agreement, in recognition of their special requirements, their economic, financial and administrative constraints, and their need for flexibility in order to create a viable technological base, it reads, adding that the transition period for LDC members under Article 66.1 of the TRIPS Agreement had been extended twice before (in 2005 and 2013). "The he decision adopted was the result of intensive consultations over several months."

The members were broadly in agreement on the principle of the extension but were unable to reach a decision due to their differences on the additional request that members graduating from LDC status should be accorded additional flexibilities under the TRIPS Agreement after their graduation.

LDCs favoured extending the transition period for as long as the member remains categorised as an LDC, and for an additional period of 12 years from the date of graduation of a member from the LDC category. A group of delegations expressed a preference for extending the period for a limited time, while others argued that a transition period for members that have graduated from LDC status went beyond the TRIPS Council's mandate under Article 66.1, the press note adds.

Given the lack of consensus on this latter issue, and the urgency to agree on the transition period extension, members agreed that the post-graduation element of the request would best be pursued under an LDC proposal already on the agenda of the General Council.

Under the agreed decision, LDC country members shall not be required to apply the provisions of the TRIPS Agreement, other than Articles 3, 4 and 5, until 2034, July 1 or until the date when they  cease to be a least developed country, whichever date is earlier.

"The important decision proves that finding consensus is still within reach for members of this organisation,” said the chair of the TRIPS Council ambassador Dagfinn Sørli of Norway. The chair commended all delegations involved in this effort “for their sense of responsibility in finding a timely solution, for their commitment in pursuing their respective objectives, and for the flexibility and pragmatism they showed when this was necessary to close the deal.

"It is thanks to the hard work and diplomatic acumen of these delegations that we have a draft decision before us, agreed by those most directly affected by this matter, that can once again extend the transition period for LDCs before the current period expires in just over 24 hours' time,” he added.

On behalf of the LDC Group, Chad noted this is a compromise solution they accept with the understanding that members have also expressed their readiness to continue discussions in good faith at the General Council on the post-graduation transition period for LDCs.

In expressing their support for the extension, developed members acknowledged the unique challenges facing LDCs, which in many cases have been exacerbated by the Covid-19 pandemic. They encouraged LDCs to use the transition period to build reasonable and balanced IP systems for themselves, including by availing themselves of technical assistance available from the WTO and other international organisations.

Several members expressed their satisfaction at the fact that members have demonstrated they can work together constructively to reach consensus and deliver important results. The work done by the delegations of Chad and Bangladesh, who led the LDC effort in bringing the discussion to a successful and multilateral outcome, was also commended by a large number of delegations.

Norway commits NOK 45 million to EIF to spur economic recovery in the LDCs

Norway's Ministry of Foreign Affairs is contributing NOK 45 million (CHF 4.8 million) to the Enhanced Integrated Framework (EIF) to support projects aimed at helping the world's poorest countries recover from the Covid-19 crisis. The new contribution was announced at the EIF's steering committee meeting today, attended by director-general Ngozi Okonjo-Iweala and Norway's WTO ambassador Dagfinn Sørli.

"Through its generous contribution to the EIF, Norway is supporting LDCs in playing a more active role in international trade and helping their people to benefit from the higher incomes and better jobs that trade can bring," said Dr Okonjo-Iweala.

The world's poorest countries have been particularly hard hit by the Covid-19 crisis due to the fragility of their economies and to disruptions in trade flows caused by a variety of trade-restrictive measures implemented by governments.

"Norway is pleased that its substantial contribution to the EIF’s important work will help least-developed countries use trade as a tool for sustainable economic growth and poverty reduction," Ambassador Sørli said, adding that it is vital to help these countries overcome the enormous challenges, which the pandemic has exacerbated.

Since the Covid-19 pandemic started, the EIF and its country partners have adapted their projects to address pressing  needs, from strengthening nascent tourism sectors to building the e-commerce capabilities of micro, small and medium-sized enterprises and women-owned businesses, the EIF's executive director Ratnakar Adhikari said, thanking Norway for helping LDCs forge ahead with developing their trade capabilities.

Norway has been an EIF donor for 12 years. The latest contribution brings Norway's total EIF funding to NOK 345 million since the programme started in 2009.

The EIF's biannual steering committee serves as a forum for information exchange and a platform for LDC representatives, donors and development partners to provide guidance to ensure that the EIF can effectively deliver on its goals.

Goods barometer confirms steep drop in trade but hints at nascent recovery

 World merchandise trade likely registered a historic fall in the second quarter of 2020, according to the latest reading of the World Trade Organisation (WTO’s) Goods Trade Barometer, a real-time gauge of trends in global trade.

Additional indicators point to partial upticks in world trade and output in the third quarter, but the strength of any such recovery remains highly uncertain: an L-shaped, rather than V-shaped, trajectory cannot be ruled out.

Released today, the current barometer reading of 84.5 is 15.5 points below the baseline value of 100 for the index and 18.6 points down from the same period last year. “This reading – the lowest on record in data going back to 2007, and on par with the nadir of the 2008-09 financial crisis – is broadly consistent with WTO statistics issued in June, which estimated an 18.5 per cent decline in merchandise trade in the second quarter of 2020 compared to the same period last year,” it states, adding that the exact extent of the fall in trade will only be confirmed later this year when official trade volume data for the period from April to June becomes available.

All of the barometer's component indices remain well below trend, with many registering historic lows, although some have begun to stabilise. Indices for automotive products (71.8) and air freight (76.5) are by far the worst on record since 2007. Container shipping (86.9) also remains deeply depressed. Likewise, export orders (88.4) show signs of recovery as this index has turned upward. Meanwhile, indices for electronic components (92.8) and agricultural raw materials (92.5) have held up relatively well, showing only modest declines.

The WTO's June statistics implied a 14 per cent drop in global merchandise trade volume between the first and second quarters of this year. This estimate, together with the new Goods Trade Barometer reading, suggest that world trade in 2020 is evolving in line with the less pessimistic of the two scenarios outlined in the WTO's April forecast, which projected that the volume of merchandise trade this year would contract by 13 per cent compared to 2019. However, as WTO economists warned in June, the heavy economic toll of the Covid-19 pandemic suggests that the projections for a strong, V-shaped trade rebound in 2021 may prove overly optimistic. As uncertainty remains elevated, in terms of economic and trade policy as well as how the medical crisis will evolve, an L-shaped recovery is a real prospect. This would leave global trade well below its pre-pandemic trajectory.

The Goods Trade Barometer is designed to gauge momentum and identify turning points in world trade growth. Readings of 100 indicate growth in line with medium-term trends; readings greater than 100 suggest above-trend growth, while those below 100 indicate below-trend growth.

In normal times, the Goods Trade Barometer anticipates changes in the trajectory of world trade by a few months. However, the sudden, unexpected nature of the Covid-19 crisis may have profoundly altered economic behaviour and patterns, reducing the predictive value of the standard set of indicators.

Covid-19 crisis may push up trade costs : WTO

 The global trade regime secretariat has published a new information note warning of possible increases to trade costs due to Covid-19 disruptions. The note examines the pandemic’s impact on key components of trade costs, particularly those relating to travel and transport, trade policy, uncertainty, and identifies areas where higher costs may persist even after the pandemic is contained.

The note estimates that travel and transport costs account for as much as a third of trade costs depending on the sector. Pandemic-related travel restrictions are therefore likely to affect trade costs for as long as they remain in place. For example, global air cargo capacity shrank by 24.6 per cent in March 2020, as passenger flights account for around half of air cargo volumes. The resulting increase in air freight prices is likely to subside only with a rebound in passenger transport, according to the report by the World Trade Organisation (WTO). While sea and land transport have not faced comparable shocks, maritime transport has seen a decrease in numbers of sailings, while international land transport has been affected by border closures, sanitary measures and detours. Moreover, business travel, which is important for maintaining trading relationships and managing global value chains, in addition to being a significant economic activity in its own right, is being disrupted. The quality of information and communications technology (ICT) infrastructure and digital preparedness will be important in determining how well economies can cope.

Trade policy barriers and regulatory differences are estimated to account for at least 10 per cent of trade costs in all sectors, the WTO report reads, adding that they include tariff and non-tariff measures, temporary trade barriers, regulatory differences and the costs of crossing borders, as well as other policies that impact trade, such as a lack of investment facilitation or of intellectual property protection.

The report also notes that while Covid-19 has motivated both trade-restricting and import-facilitating changes in tariffs and regulatory practices, these measures have so far affected only a small subset of products. A crisis-induced shift towards the digitalisation of customs and regulatory procedures to reduce physical contact could potentially lower the associated trade costs in the long-term.

The report also points to uncertainty as a factor that magnifies the impact of existing trade-related costs, weighing on trade finance flows and dampening the appetite of businesses to invest in researching new markets, acquiring language skills and prospective partners, and conforming with foreign standards. It notes that in the first quarter of 2020, a widely used measure for the global level of uncertainty registered levels 60 per cent higher than those triggered by the Iraq War and the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003. In mid-March, a separate index of financial market volatility came close to highs last seen in 2008 after the failure of Lehman Brothers.

Looking ahead, the report notes that many governments have implemented measures to mitigate pandemic-related disruptions to economic activity, for instance by exempting certain transport crew from travel restrictions, or by enhancing the quality of and the access to ICT. While many of the changes in trade costs can be expected to revert once the pandemic is brought under control, the report observes that some effects may persist. For example, aviation industry consolidation and shifts in passenger appetite for air travel could lead to higher air transport costs. In addition, government policy choices – which could either reduce or increase trade policy uncertainty – will be important in shaping uncertainty-related trade costs in the future.

Key points:

• Travel restrictions and border closures have been an important part of the initial policy response to the COVID-19 pandemic, and these measures have directly affected trade in goods and services. They have disrupted freight transport, business travel and the supply of services that rely on the presence of individuals abroad. Transport and travel costs constitute an important part of trade costs, and, depending on the sector, are estimated to account for 15 to 31 per cent. Travel restrictions are therefore likely to account for a substantial increase in trade costs for as long as they remain in place.

• Freight transport service performance is crucial to trade costs in manufacturing. Since the beginning of the COVID-19 crisis, maritime and land transport have remained largely functional, although they have registered sometimes considerable delays, but air freight transport has been severely disrupted, with global air cargo capacity shrinking by 24.6 per cent in March 2020. Many governments are trying to do as much as possible to keep trade flowing, but in some regions, travel restrictions have the potential to disrupt regional trade and livelihoods severely.

• Tradable services that rely on physical proximity between suppliers and consumers, such as tourism, passenger transport or maintenance and repair services, have been severely impacted by travel restrictions and social distancing and have seen a prohibitive increase in trade costs. The disruption in business travel, which plays important roles in establishing and maintaining trading relationships as well as in managing global value chains, is also likely to affect both business and professional services and manufacturing production, although this will depend on how possible it is to substitute e-interactions for face-to-face communication. The quality of information and communications technology (ICT) infrastructure and digital preparedness will thus be important factors in how well economies cope with the pandemic shock.

• Estimates suggest that trade policy barriers and regulatory differences account for at least 10 per cent of trade costs in all sectors. Products essential in the fight against the pandemic have seen the introduction of mostly temporary import-facilitating and export-restrictive measures. The former push down trade costs while the latter raise them. Nevertheless, both types of measures have covered a small share of global trade.

• High levels of uncertainty magnify the impact of trade costs on international trade. In the first quarter of 2020, for instance, a widely used measure for the global level of uncertainty was 60 per cent higher than the levels triggered by the Iraq War and the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003. Uncertainty reduces the appetite of firms to invest into new trading relationships, and the increase in uncertainty may also result in trade finance contraction that is likely to take a particularly heavy toll on emerging and developing economies.WTO< 

WTO report draws attention to impact of Covid-19 trade disruptions on women

Women make up a larger share of the workforce in the manufacturing sectors, such as textiles, apparel, footwear and telecommunication products that have seen the largest falls in export growth during the first months of the pandemic, according to a global trade body. In the services sector, women also outnumber men in industries that have been directly affected by travel restrictions, such as tourism and business travel services, the World Trade Organisation (WTO) paper reads.
The paper estimates the risk posed by trade disruptions on men and women using employment data from the World Bank (WB) Enterprise Surveys, monthly merchandise exports data and statistics on the mode by which a service is supplied.
The paper furthermore notes that women are disproportionately present in the informal sector in developing and least-developed countries and in activities that cannot be done remotely. It also highlights how the existing gender gap in terms of income, education, information technology skills, access to finance, and childcare responsibilities put women at a further disadvantage during the pandemic.
Maintaining open markets during the recovery period is key to building faster and more inclusive growth, the information note reads, adding that this should be complemented by appropriate labour and education policies as well as legal and social reforms to support women workers, consumers and traders. The paper also points to the recently launched WTO-World Bank report ‘Women and Trade: The role of trade in promoting gender equality’, which highlights ways to ensure women continue to benefit from trade during the economic recovery after the pandemic.
“Women are at risk of suffering more than men from the trade disruption generated by the Covid-19 pandemic,” it reads, adding that one of the reasons for this is that a larger share of women works in sectors and types of firms that have been particularly hard-hit by the pandemic. “Women make up a larger share of the workforce in the manufacturing sectors, such as textiles, apparel, footwear and telecommunication products that experienced some of the largest falls in export growth during the first months of the pandemic.” For example, female employees represent 80 per cent of the workforce in ready-made garment production in Bangladesh, in which industry orders declined by 45.8 per cent over the first quarter of 2020, and by 81 per cent in April alone, it adds.
A larger share of women than men works in services, such as tourism and business travel services, that have been directly affected by regional and international travel restrictions. Likewise, a large share of firms owned or managed by women are micro, small and medium-sized enterprises (MSMEs), and lower levels of financial resources and limited access to public funds are placing the survival of such businesses at greater risk. “The economic impact of the pandemic is expected to be particularly significant for women in least-developed and developing economies because fewer women than men are employed in these economies in occupations, which can be undertaken remotely, and a larger share of women is employed in sectors highly exposed to international travel restrictions.”
The joint World Bank (WB) and World Trade Organisation (WTO) report on trade and gender, ‘Women and Trade: the role of trade in promoting gender equality’, published in July 2020, highlights ways in which trade can continue to benefit women in the post-Covid-19 recovery period. “The effects of the pandemic are aggravating existing vulnerabilities,” it reads, adding that many channels through which Covid-19 is having a greater impact on women are those at the heart of gender inequalities, such as lower wages for women, fewer educational opportunities, limited access to finance, greater reliance on informal employment and social constraints. “Limited access to digital technologies and lower rates of information technology (IT) skills further reduce women's opportunities for teleworking and e-commerce, and thus for adapting to the current crisis.”
Many governments have adopted a broad range of support measures to help individuals and businesses. Some of these measures, mainly social protection initiatives adopted by some central or local governments, are specifically targeted at women. “Maintaining open trade during the economic recovery period is key to building faster and more inclusive growth,” according to the report.

WHO, WIPO, WTO launch updated study on access to medical technologies and innovation

The directors-general of the World Health Organisation (WHO), the World Intellectual Property Organisation (WIPO) and the World Trade Organisation (WTO) presented a new edition of the Trilateral Study on Access to Medical Technologies and Innovation.
Building on the first edition launched in 2013, the publication seeks to strengthen the understanding of the interplay between the distinct policy domains of health, trade and intellectual property (IP), and how they affect innovation and access to medical technologies, such as medicines, vaccines and medical devices. The second edition provides an improved, evidence-based foundation for policy debate and informed decision-making at a critical time for global health.
In a video message released on the day of the launch, WTO director general Roberto Azevêdo emphasised the need for policy coherence and collaboration. Recognizing the close link between the health, trade and IP dimensions, he noted that “coherent approaches to vital medical technologies that bring together the key determinants for innovation as well as access” were required and needed “to span the entire process, from research to development to manufacturing and delivery to those in need”.
“Close collaboration between our three specialized agencies has yielded important practical benefits,” DG Azevêdo said, adding that similar benefits could be replicated at the domestic level by mirroring this integrated approach. He expressed the hope “that the revised material will support policy debate and help build governments’ capacity to deal with health challenges”. DG Azevêdo recalled that “it is only through joint efforts at the global level that we can achieve our shared public health goals” and that “cooperation is also necessary to prepare for future health crises”, a goal to which the study contributes.
Likewise, WIPO director general Francis Gurry said – in a video message – that the new edition of the trilateral study is an important example of the three international organisations bringing their separate expertise together to address core issues at the intersection of health, trade and innovation. He observed that the original study, published in 2013, was well received precisely because it provided a factual account of the landscape on access to medical technologies and innovation, and of the multiplicity of actors involved.
“Our first duty,” DG Gurry said, “always is to survey what the situation actually is” before determining the best way to improve it. He noted that while the new edition coincides with the current global health crisis, it was completed prior to the advent of the Covid-19 pandemic. The study nonetheless includes a separate section on this hugely challenging and complex subject matter. DG Gurry also underscored the importance of interdisciplinary approaches and of cooperation amongst international organisations as “the Covid-19 pandemic is showing the need for health, trade and innovation policy to come together to provide the answers that we need to confront this huge challenge for humanity”.
“Barriers to access must be removed, including unaffordable prices, intellectual property barriers, unjustified tariffs and challenges in ensuring effective and efficient regulatory review,” WHO director-general Dr Tedros Adhanom Ghebreyesus, said – in his video message – adding, “We have seen over the past months how countries have mobilized unprecedented investments in collaborative, not-for-profit research and development.”
The Covid-19 pandemic is showing what we can do when we come together to face a shared global health threat, he said, adding that that’s the kind of collaboration that can save lives and transform the health of billions of people globally.
The study discusses key factors determining access to medical technologies and innovation, including regarding medicines, vaccines and other medical technologies, such as medical devices and diagnostics. The second edition draws practical lessons from experiences regarding the intersections between public health, IP and trade within the broader perspectives established by the human rights dimension of health and the Sustainable Development Goals (SDGs).
The study also records numerous significant developments since 2013 when the first edition was launched. Among the new topics covered are antimicrobial resistance and cutting-edge health technologies. The revised edition provides updated data on health, innovation trends in the pharmaceutical sector, and trade and tariffs regarding medical products. It also includes an updated overview of access to medical technologies globally and key provisions in regional trade agreements. In addition, it takes account of developments in IP legislation and jurisprudence.
A Covid-19 section at the start of the publication provides a factual overview of the developments and measures taken to address this extraordinary public health crisis, which began after the work on the second edition of the study had been completed. The section guides the reader to parts of the study that are of direct relevance to the issues that have been raised during the pandemic.
The study is designed to serve as a reference tool for policy-makers in the widest sense – lawmakers, government officials, delegates to international organizations, non-governmental organizations (NGOs), researchers, and all others who seek a compendium of the issues at the intersection of global health, innovation and intellectual property and trade. It is also designed to serve as a factual resource for the three organisations’ technical cooperation activities.

Covid-19 is exacerbating the global trade finance gap

The Covid-19 pandemic is a tragic health crisis causing irreversible damage to the global economic and financial system. It is also worsening trade restrictions and reducing trade volumes globally. Coupled with the scarcity of financing in general, and trade financing in specific, coronavirus is causing serious damage to developing economies, according to the global trade body.
The least developed countries (LDCs) are among the hardest hit. Their already fragile economies are facing further challenges, as the value of their exports plummet and their borders are closed to trade and tourism, like most countries worldwide. “Local and foreign investments are drying up,” the World Trade Organisation (WTO) said, adding that small business revenues and orders have been reduced drastically. “The cost of financial transactions is increasing, as working with financial institutions in LDCs is perceived to be riskier than before.”
The issuance of letters of credit and other trade finance instruments is becoming difficult, if available at all, and the appetite of correspondent banking is decreasing each day as the crisis unfolds. Because of this, LDCs are seeing a rapid depletion of their foreign reserves, and their financial institutions are facing a shortage of liquidity. The persistence of this situation could lead LDCs to drift further away from global value chains and to be left out of the international trade system, it added.
Access to trade finance was already an issue prior to the pandemic. The global trade finance gap is estimated at $1.5 trillion and it is mostly impacting small and medium-sized enterprises in developing countries. Over 50 per cent of requests for financial support to trade are rejected.
The actions that were being taken to reduce the global trade finance gap – including policy advancement, technical assistance, capacity building, regulatory reform and increased financing – are more important now than ever before, to ensure that the world’s most vulnerable countries are not further entrenched in economic inequality because of the pandemic.
Multilateral development banks (MDBs) have launched immediate responses and financial support amounting to more than $200 billion for emerging and low-income countries. For instance, the Islamic Development Bank Group has launched an initial 3Rs, as in ‘Respond, Restore, Restart’, for a total $2.3 billion to support Organisation of Islamic Conference (OIC) countries at different stages of the recovery trajectory. More specifically, trade finance is a pivotal component of support to the private sector as acknowledged by the G20 Ministers of Finance and Central Bank Governors at their April 2020 meeting.
In addition the WTO and MDBs committed to support trade finance The International Islamic Trade Finance Cooperation (ITFC) has pledged an initial $300 million response package to support strategic health, food and energy trade flows and further grant elements to build the capacity of medical personnel and laboratories in OIC countries.
In addition to finance itself, technical assistance programmes are enabling LDCs to build their capacity to provide trade finance. For example, a successfully piloted international trade e-learning programme developed by ITFC and the International Chamber of Commerce is now being provided digitally to financial institutions in LDCs, with the support of the Enhanced Integrated Framework (EIF) and several multilateral development banks and major commercial banks. MDBs are also working together to overcome trade finance barriers, including compliance challenges.

Global trade falls steeply in first half of 2020

The global trade fell sharply in the first half of the year, as the Covid-19 pandemic upended the world economy. However, rapid government responses helped temper the contraction, and World Trade Organisation (WTO) economists now believe that while trade volumes will register a steep decline in 2020, they are unlikely to reach the worst-case scenario projected in April.
The volume of merchandise trade shrank by 3 per cent year-on-year in the first quarter according to WTO statistics. Initial estimates for the second quarter, when the virus and associated lockdown measures affected a large share of the global population, indicate a year-on-year drop of around 18.5 per cent. These declines are historically large, but could have been much worse. The WTO's April 20 annual trade forecast, in light of the large degree of uncertainty around the pandemic’s severity and economic impact, set out two plausible paths: a relatively optimistic scenario in which the volume of world merchandise trade in 2020 would contract by 13 per cent, and a pessimistic scenario in which trade would fall by 32 per cent. As things currently stand, trade would only need to grow by 2.5 per cent per quarter for the remainder of the year to meet the optimistic projection. However, looking ahead to 2021, adverse developments, including a second wave of Covid-19 outbreaks, weaker than expected economic growth, or widespread recourse to trade restrictions, could see trade expansion fall short of earlier projections.
"The fall in trade we are now seeing is historically large, in fact, it would be the steepest on record,” said director-general Roberto Azevêdo. “But there is an important silver lining here: it could have been much worse,” he said, adding that it is genuinely positive news but we cannot afford to be complacent. “Policy decisions have been critical in softening the ongoing blow to output and trade, and they will continue to play an important role in determining the pace of economic recovery.”
“For output and trade to rebound strongly in 2021, fiscal, monetary, and trade policies will all need to keep pulling in the same direction,” he added.
In light of available trade data for the second quarter, the April forecast’s pessimistic scenario, which assumed even greater health and economic costs than what had transpired, appears less likely, since it implied sharper declines in the first and second quarters.
The Covid-19 pandemic and associated containment efforts intensified in the second half of March. Strict social distancing measures and restrictions on travel and transport were fully in effect in most countries throughout April and May, and are now increasingly being relaxed. These developments are reflected in a variety of economic indicators which, taken together, suggest trade may have possibly bottomed out in the second quarter of 2020. Global commercial flights, which carry a substantial amount of international air cargo, were down nearly three quarters (-74 per cent) between January 5 and April 18, and have since risen 58 per cent through mid-June. Container port throughput also appears to have staged a partial recovery in June compared to May. Meanwhile, indices of new export orders from purchasing managers' indices also started to recover in May after record drops in April. It is useful to keep in mind that these rebounds follow historic or near-historic declines, and will need to be monitored carefully before drawing any definitive conclusions about the recovery.
Looking ahead to next year, a slower-than-expected pace of economic recovery would weigh on trade growth, which will see trade growth for 2021 come in at closer to 5 per cent, which would leave it well below the pre-pandemic trajectory. On the other hand, a quick return to its pre-pandemic trajectory would imply trade growth in 2021 of around 20 per cent, in line with the April forecast’s optimistic scenario.
The World Bank, OECD and IMF have all released forecasts showing significant slowdowns in global trade and GDP; all are broadly consistent with the WTO's forecast for the current year. The World Bank's recent forecast would see global output decline by 5.2 per cent in 2020, falling between the WTO's optimistic and pessimistic range. Other international organizations' GDP forecasts for 2020 are also increasingly negative, even as their trade projections stay roughly in line with the WTO's optimistic scenario. These estimates imply a less negative trade response to declining GDP growth than was observed during the global financial crisis of 2008-09.
The responsiveness of trade to changes in income can be measured by the ratio of the growth of merchandise trade volumes to real GDP growth at market exchange rates, also referred to as the income elasticity of trade. The implied elasticity under the WTO's optimistic forecast for 2020 was 5.3 – in line with that seen during the financial crisis. However, if world GDP instead contracts by the World Bank's estimated 5.2 per cent with a trade decline of 13.4 per cent.

WTO report looks at trade developments in poorest countries in wake of Covid-19

A new information note published by the global trade regime secretariat looks at how the Covid-19 pandemic has affected the participation of least-developed countries (LDCs) in global trade.
The note stresses that LDCs have seen a significant decline in export earnings due to decreasing demand in key markets, falling commodity prices and a decline in remittances and are likely to be the hardest hit by the crisis due to their limited resources to stimulate growth.
Most LDCs have experienced a significant decline in export earnings since the outbreak of Covid-19. The World Trade Organisation (WTO) report anticipates that the downturn in world trade in 2020 will continue to be particularly severe for LDCs.
LDC exports of textiles and clothing have been badly affected by declining global demand and supply chain disruptions. In addition, LDCs that depend on tourism revenues are being hard hit by the slump in this sector. There are currently 47 LDCs, 36 – including Nepal – of which have become WTO members. The note underscores that the pandemic is undermining the development gains of countries such as Angola, Bangladesh and Vanuatu that are expected to graduate from LDC status in the near future. 
The note also collates the measures that LDCs have taken to combat the pandemic, ranging from strengthening health care systems to providing stimulus packages to export-oriented sectors and liquidity support for small and medium-sized enterprises.
In early May, the LDCs group called on other WTO members to refrain from imposing export prohibitions or restrictions on medical goods and food. They urged governments to facilitate trade in these goods, including by implementing the provisions in the WTO’s Trade Facilitation Agreement.
The report also notes that the international community is seeking to support LDCs’ participation in world trade by providing debt relief and strengthening social sectors.
Among the Covid-19 pandemic’s far-reaching consequences for the global economy, the LDCs face the most daunting challenges. A lack of resources to support an economic rebound is compounded by LDCs’ dependence on a limited range of products exported to a few markets, some of which have been those worst affected by the Covid-19 outbreak. The pandemic threatens to derail hard-won development gains in LDCs, it reads.
The year 2020 started against the backdrop of a subdued trade performance in 2019. The value of LDC exports of goods and services declined by 1.6 per cent in 2019, a greater decline than that of world exports (1.2 per cent). Consequently, the share of LDCs in world exports also registered a marginal decline, falling to 0.91 per cent in 2019. The expected downturn in trade in 2020 is likely to be even more severe for LDCs than at the global level.
The pandemic has accentuated the slump in oil prices seen in 2019. Declining demand, as well as supply disruptions, have weighed significantly on LDC exports, especially exports of textiles and clothing products. LDCs dependent on tourism revenues have seen the sector come to a virtual standstill. As migrant workers from LDCs return from host countries affected by the pandemic, flows of remittances – a critical source of foreign exchange for many countries – have dramatically dried up. All of these factors are predicted to worsen further in the coming months.
The ongoing pandemic may affect the near-term prospects for some countries to graduate from LDC status. Angola and Vanuatu, which are scheduled to graduate soon, and LDCs such as Bangladesh, which are on the path to graduation in the next few years, have been experiencing unavoidable declines in economic growth and export earnings.
The LDCs have called for countries to refrain from export prohibitions and restrictions on medical goods and food, of which many are net importers. Several LDCs have lowered duties on medical goods to ensure their availability at more affordable prices to their citizens.
Since the start of the pandemic, at least two-thirds of LDCs have put in place a variety of lockdown measures. Some LDCs have announced stimulus packages, which have covered export-oriented sectors. They have also strengthened healthcare systems and ensured social relief packages and liquidity support to small and medium-sized enterprises (SMEs).
The international community has announced support measures ranging from debt relief to strengthening social sectors and providing social safety nets for the most vulnerable. Maintaining this momentum, while redoubling coordination efforts, remains vital as the world moves towards economic recovery, the note reads.

WTO issues report on trade impacts for WTO members graduating from LDC status

A new report issued by the World Trade Organisation (WTO) today seeks to help least developed countries (LDCs) better understand the trade-related implications of graduation from LDC status. The product of a joint effort between the WTO and the Enhanced Integrated Framework (EIF), ‘Trade Impacts of LDC Graduation’ looks at how graduation may affect LDCs’ participation in world trade, including their access to export markets, and implications for their WTO commitments.
The report responds to a specific request from the LDC Group in the WTO for an analysis of how graduation will impact countries’ trade relations. LDCs are accorded special treatment in the WTO, in particular with regard to enhanced market access opportunities and the implementation of WTO rules and disciplines.
While graduation represents an important milestone in their development path, phasing out of the special treatment provisions associated with LDC status could present challenges to graduating LDCs. As a result, graduation-related concerns are increasingly becoming an integral part of LDC proposals in the WTO.
The report was completed before the outbreak of the Covid-19 pandemic and the issuance of the WTO’s recent trade forecast, which foresees a sharp downturn in global trade this year. Nevertheless, the study remains pertinent as it examines the trade impacts resulting from graduation, not the factors that could constrain prospects for graduation due to the pandemic.
“The WTO remains committed to helping LDCs use trade to raise incomes and reduce vulnerabilities, and thereby to graduate from LDC status,” WTO director-general Roberto Azevêdo said, adding that a quarter of LDCs today are on track to graduate – or at least were, prior to the economic dislocation arising from the Covid-19 pandemic. “They need to be supported.”
It is very positive that the international community is continuing to explore measures to facilitate a smooth and sustainable graduation process for LDCs, he added.
A WTO member ‘graduates’ from LDC status when it meets certain socio-economic thresholds set by the United Nations (UN). The decision regarding graduation is taken by UN members at the recommendation of the Committee for Development Policy, an advisory body of the United Nations Economic and Social Council (ECOSOC).
There are currently 47 LDCs, of which 12 are at different stages of the graduation process. Of these LDCs, seven are WTO members including Nepal, Angola, Bangladesh, Lao PDR, Myanmar, Solomon Islands and Vanuatu, while three are in the process of negotiating their WTO accession including Bhutan, Sao Tome and Principe, and Timor-Leste. The other two LDCs on the graduation path are Kiribati and Tuvalu.
The report notes that while graduating LDCs have diverse economic and trade profiles, for most of them the impact of graduation appears limited, with only marginal increases in tariffs due to the loss of preferences. The biggest impact is likely to be confined to a handful of export items including clothing, fish products, footwear destined for a few developed country markets including Canada, the European Union (EU) and Japan. With a considerable share of graduating LDC exports going to markets covered by regional trade agreements, the impact of graduation is likely to be limited for this trade.
Graduating governments may need to take certain steps to adhere to their new non-LDC obligations, particularly with regards to increased notification requirements, the report notes.
The report explores options for graduating LDCs, including through forging appropriate trade arrangements with their trading partners and seeking recourse to instruments and procedures available under WTO rules that allow them to engage with WTO members should they face difficulties in meeting their commitments. It also identifies potential support measures that graduating LDCs can build on by working hand-in-hand with their development partners to ensure sustainable graduation.
The WTO Secretariat intends to undertake a Covid-19 impact analysis for graduating LDCs under the aegis of this project.
“Trade Impacts of LDC Graduation” is the outcome of a joint project between the WTO and the EIF that aims to help graduating LDCs to address graduation-related challenges and support their integration into global trade,” he added.

WTO report finds growing number of export restrictions in response to Covid-19 crisis

Eighty countries and customs territories so far have introduced export prohibitions or restrictions as a result of the Covid-19 pandemic, according to a new report by the WTO Secretariat.
The report, which is based on information from official sources and news outlets, draws attention to the current lack of transparency at the multilateral level and long-term risks that export restrictions pose to global supply chains and public welfare. The new export prohibitions and restrictions mostly cover medical supplies such as face masks, pharmaceuticals, ventilators and other medical equipment, the report finds. Some of the measures have extended the controls to other products such as food and toilet paper, it reads.
However, only 13 WTO members – or 39, if EU member states are counted individually – have submitted information on these new measures in line with WTO rules for quantitative restrictions. Three of them have notified export restrictions on foodstuffs pursuant to the WTO Agriculture Agreement. The report also notes the harms and delays that insufficient information inflicts on countries seeking to procure materials to fight against the Covid-19 pandemic and provides guidance on how WTO members can notify their measures. “Only a handful of notifications were submitted in March 2020 and these have since increased in April,” it adds.
While the report acknowledges exceptions in WTO rules for export prohibitions or restrictions, it also highlights costs that both importing and exporting economies will face in the long run, particularly in terms of lower supply and higher prices for much-needed products.
The Covid-19 pandemic presents the world with an unprecedented public health challenge, it reads, adding that measures to curb the spread of the disease have shut down large swathes of the world economy. “Worldwide demand for medical products to fight the pandemic is unprecedented.”
All countries depend on international trade and global value chains to source these products. This is challenging in light of ongoing disruptions to international transport, particularly air cargo, which often goes together with passenger travel. “Likewise, an additional complicating factor is the growing number of export prohibitions and restrictions, which some WTO members have introduced to mitigate critical shortages at the national level.”
Responding to Covid-19 urgently requires sharp increases in global production of essential medical supplies. Well-functioning value chains can help quickly ramp up production while containing cost increases, the report reads, adding that as new production becomes available, trade will be essential to move supplies from where they are abundant to where they are lacking, especially as the disease peaks at different times in different locations. “However, a lack of international cooperation risks hampering the urgently required supply response.”
The information available thus far suggests that 80 countries and separate customs territories have introduced export prohibitions or restrictions as a result of the COVID 19 pandemic, including 46 WTO members – 72, if EU member states are counted individually – and eight non-WTO members. “Most of these have been described as temporary measures,” the report reads, adding that at least two members have already removed some of those restrictions. “The products covered by these new export prohibitions and restrictions vary considerably; most have focused on medical supplies – for example facemasks and shields – pharmaceuticals and medical equipment – for example ventilators – but others have extended the controls to additional products, such as foodstuffs and toilet paper.”
While Article XI of the General Agreement on Tariffs and Trade (GATT) 1994 broadly prohibits export bans and restrictions, it allows members to apply them temporarily to prevent or relieve critical shortages of foodstuffs or other essential products. “If members move to restrict exports of foodstuffs temporarily, the Agreement on Agriculture requires them to give due consideration to the food security needs of others,” according to the WTO. The WTO rules also contain more general exceptions, which could be used to justify restrictions provided that they do not constitute a means of arbitrary or unjustifiable discrimination between countries, or a disguised restriction on international trade. “Export prohibitions and restrictions applied by large exporters may in the short run lower domestic prices for the goods in question and increase domestic availability. But the strategy is not costless: the measures reduce the world's supply of the products concerned and importing countries without the capacity to manufacture these products suffer. And exporters also risk losing out in the long run. On the one hand, lower domestic prices will reduce the incentive to produce the good domestically, and the higher foreign price creates an incentive to smuggle it out of the country, both of which may reduce domestic availability of the product. On the other hand, restrictions initiated by one country may end-up triggering a domino effect. If trade does not provide secure, predictable access to essential goods, countries may feel they have to close themselves from imports and pursue domestic production instead, even at much higher prices. Such a scenario would likely result in lower supply and higher prices for much-needed merchandise. The long-term effects could be significant.
The report has also suggested possible actions to improve transparency in this area include, ensuring that the new measures are adequately published at the national level and, when possible, making them available in the website(s) of the relevant national authorities. “Notifying as soon as possible any new export restriction to the WTO pursuant to the QR Decision; in case these restrictions affect foodstuffs, notifying them to the Committee on Agriculture as well,” it suggests, adding that updating as necessary the information under the ‘transparency notification’ of Article 1.4 of the Agreement on Trade Facilitation, including the relevant enquiry points. “Endeavouring to provide additional information to other members beyond that required by the notifications, whenever possible.”

Government drafting Intellectual Property Rights Bill

As foreign investors have been asking Nepal to strongly enforce the intellectual property laws, the Ministry of Industry, Commerce and Supplies has started drafting Intellectual Property (IP) Rights Bill.
Though, Nepal has Patent, Design and Trade Mark Act 1965 and the Copyright Act 2002, the latest development in the market – especially to attract foreign investment – Nepal is under the pressure of framing new IP law.
The ministry is also pushing the legal framework also due to World Trade Organisation’s (WTO) recommendation. During the second Trade Policy Review of Nepal held in December 2018, the WTO had pointed out slow progress toward safeguarding the intellectual property rights in Nepal. “Nepal should have a more effective enforcement of competition policy and protection of intellectual property rights,” reads global trade regime in its concluding remark of the review meeting.
Since the cases on violation of intellectual property right are governed by the age-old laws, the country enforced its first National IP Policy in March 2017. Thus, the government is framing Intellectual Property Act, to incorporate all the issues related to intellectual property under a single legal framework.
The ministry felt the need for a separate law after realising that old laws cannot address emerging cases related to intellectual property. As the government wants to attract more foreign direct investment (FDI) to fill the resource gap, the foreign investors want their design be protected by the law. The ministry aims at finalising the draft in the one-and-a-half months.
The government has – before the Investment Summit – brought Public Private Partnership and Investment Act, and the Foreign Investment and Transfer of Technology Act (FITTA) to attract the foreign investment. But due to lack of intellectual property law, the foreign investors are not convinced.
According to the Department of Industry (DoI), the cases related to intellectual property rights have been growing with each passing year.
There has been lots of incidents of intellectual property rights violation – from various industries including products to music – in the country. Two years ago, a local company Kansai Nerolac Paints Nepal Pvt Ltd moved the court claiming a reputed Japanese company Kansai Paint’s brand in its name. The trademark dispute – which has frightened the international well known brands to enter Nepal – has still been under the court’s preview. In 2018, Nepali movie 'Kri' was accused of copyright violation for using music of an old movie in an unauthorised manner. The dispute was reportedly settled out of court for Rs 1.1 million.
According to some legal experts, there are some ‘professionals’, who have been registering the international well known brands and bargaining with them. The trend has distracted them from entering Nepal. Likewise, the imitatation of foreign brands in the domestic market is also on the rise.

WTO members continue efforts to facilitate LDCs’ exports

The WTO Secretariat presented to the Sub-Committee the annual review of developments in preferential rules of origin conducted in the Committee on Rules of Origin (CRO) in October 2019. It said that the CRO's work is enhancing transparency, with most preference-granting members notifying to the WTO their respective rules of origin requirements based on a template agreed by members. The CRO also hosts discussions on substantive aspects of members' practices related to origin requirements and utilisation rates of their preferential schemes by the LDCs.
The chairperson, ambassador Van Daalen of the Netherlands, commended preference-granting members for the "continuous progress being made", particularly in terms of "enhanced transparency regarding notifications of rules of origin, as well as preferential tariff and import data". She added, "This allows in-depth discussions on rules of origin requirements and preference utilisation." Both the 2015 Nairobi and 2013 Bali WTO Ministerial Conferences adopted decisions to help LDCs benefit from preferential market access opportunities.
The Secretariat also introduced a new database recently launched in partnership with the World Customs Organisation and the International Trade Centre to help firms comply with rules of origin requirements. The LDC Group welcomed the progress made in the notifications of rules of origin requirements and members' collaboration in the analytical work carried out in the CRO.
The Sub-Committee also discussed trends in LDC trade and market access conditions based on the 2019 note by the WTO Secretariat. The share of LDCs in world exports of goods and commercial services stood at 0.94 per cent in 2018, slightly higher than in 2017 (0.92 Per cent). LDC exports continue to be influenced by world energy prices as their exports tend to be concentrated in fuel and mining products. Statistics have shown that the extent of utilisation of preferences by LDCs varies according to their destination markets. The LDC Group expressed concern with the growing trade deficit, which stood at $98 billion in 2018.
Moreover, members also reviewed the state of play in LDCs' WTO accession processes. The flexibilities granted to LDCs during their accession processes include transitional periods to put their laws and practices in conformity with WTO rules. The LDC Group urged members to follow the LDC accession guidelines adopted in 2002 and intensify efforts to conclude the ongoing LDC accessions. 
Currently, six LDCs in Africa and two in the Asia Pacific region – Bhutan, Comoros, Ethiopia, Sao Tome and Principe, Somalia, South Sudan, Sudan and Timor-Leste – are negotiating their WTO accession.. Since 2004, nine LDCs including Afghanistan, Cambodia, Cabo Verde, Liberia, Nepal, Lao PDR, Samoa, Vanuatu and Yemen have completed negotiations to accede to the WTO.

WTO members review preferences granted to LDCs’ service suppliers

A dedicated session of the WTO Services Council – held yesterday and today – reviewed how World Trade Organisation (WTO) members are making use of the services waiver that allows them to grant more favourable treatment to service suppliers from least-developed countries (LDCs). Members also discussed transparency issues and cybersecurity measures in a regular meeting of the Services Council today.
The dedicated session on the WTO Services Waiver consisted of a workshop and a formal meeting of the Council for Trade in Services. The workshop provided an opportunity to ‘focus our attention on the task of better integrating LDCs into international services trade’ and of ‘making the trading system more inclusive’, director-general Roberto Azevêdo said in his opening remarks yesterday.
A total of 36 WTO members are classified as LDCs.
The workshop reviewed ways of increasing LDCs' services exports, including through maximising the use of the preferences available, and the challenges lying ahead. The participants noted that LDCs account for 1 per cent of world services and only 0.3 per cent of world services exports. LDCs' exports are expanding rapidly – 11 per cent per year on average – but from a low base. Bangladesh is the leading LDC services exporter, followed by Cambodia and Myanmar, and tourism is the LDCs' most traded services sector. To date, 51 WTO members – both developed and developing countries – have notified preferences under the Services Waiver. “These members together account for 86 per cent of global GDP and 86 per cent of global trade,” a press note from the WTO reads.
A review of the waiver was mandated by the 2015 Nairobi Decision. A services waiver was first established in 2011 allowing WTO members to grant more favourable treatment to LDC service suppliers. The Nairobi Decision extended the waiver until December 31, 2030. The purpose of the waiver is to enhance the participation of the world's poorest countries in world trade.
One theme emerging from the dedicated session of the Services Council was the need for more detailed trade data and for reporting of bilateral trade flows. The European Union (EU) was cited as one of the few members to report on the evolution of its imports of LDC services. It was noted that Bangladesh was one of the few LDCs to publish data about its services exports. The EU was reported as being the top destination for Bangladesh's services exports.
The LDCs also drew attention to the potentially restrictive effect regulations can have on market access for LDC service suppliers, including raising the costs of trade. They called on preference-granting members to tailor their preferences to the collective request tabled by the LDCs in 2014, which calls for, among other things, to end requirements for the recognition of qualifications and market access restrictions, including residence obligation for professionals from LDCs. Strategies on strengthening national capacities for service supply should be tailor-made to respond to the specific capacity constraints LDCs are facing, the group said.
In addition, an overview of the recent improvements to the services-related statistics databases was presented, including the TiVA database – developed by the Organisation for Economic Cooperation and Development (OECD) and the WTO – that measures trade in value added (TiVA) terms, and the Trade in Services database by mode of supply, which measures services trade by sector.
The dedicated session highlighted the need for efforts from national agencies in charge of statistics for financial resources to collect and compile data and to promote multi-level cooperation. The need for specific technical assistance for LDCs was also emphasized. Improving data collection at the national, regional and international levels will be essential to better capture the progress made on implementing the Services Waiver.
Another issue highlighted, on the occasion, was the regional disparity among LDCs. For example, tourism services are concentrated mainly in Asian countries, and while the share of LDCs' services exports is growing in Asia, it has been declining in Africa since 2005.
The preference-granting members shared recent initiatives and practices to translate the waiver into concrete market share for LDCs. These include easing the granting of visas for service suppliers seeking to access foreign markets, assisting LDCs in building a robust and sustainable tourism sector by helping to build roads and hotels and enhancing presence on the Internet, organising traineeships and organising targeted technical assistance activities. It was also stressed that the waiver should complement other efforts.
Several LDC service suppliers presented their success stories, the challenges they face and made suggestions on how to facilitate their further integration into the global trading system. It was said that certification remains a key challenge for service suppliers from LDCs, especially given its close link with consumer confidence.
LDCs called on members to grant additional preferences and to reduce regulatory barriers.
Improving transparency
In a meeting of the Council for Trade in Services today, WTO members discussed transparency and notification requirements for services-related measures following a communication sponsored by several developing countries. All members that intervened said that they shared the proponents' objective to improve transparency, although many noted the capacity constraints faced by developing countries and LDCs in complying with notification requirements, including internal coordination challenges. Several indicated that they were ready to engage in a conversation on how the transparency of services trade measures could be improved.

TAAN expects increase in flow of Chinese tourists after Xi’s visit

Trekking Agencies’ Association of Nepal (TAAN) expects that the recent state visit of the Chinese president will play a significant role in increasing the flow of Chinese tourists into the country.
Issuing a press note today, TAAN welcomed the bilateral agreements signed between Nepal and China on various development projects and economic cooperation, including Belt and Road Initiative (BRI) and tourism cooperation. “TAAN appreciates the remark made by President Xi Jinping about supporting Nepal in promoting Visit Nepal Year 2020 Campaign,” the press note reads, adding that the commitment of the Chinese government will positively impact the development of country’s tourism sector. “The visit is expected to increase the number of Chinese tourists as well as those from other parts of the world coming to Nepal.”
During the two-day state visit of Nepal, the Chinese President Xi Jinping committed to support Nepal to participate in the travel marts held in China. “China is willing to facilitate Nepal’s promotional activities in China.”
“Nepal is the first South Asian country to be designated an approved destination for Chinese tourists,” Xi wrote in an article published in Nepali papers.
The Chinese government has also committed to organise the ‘Ninth China Festival’ and the ‘Fourth Kathmandu Cultural Forum’ in Nepal.
As China is second largest tourism market for Nepal, the recent visit of President Xi will encourage more Chinese tourists to travel to Nepal, the TAAN press note further reads, adding that almost 70 per cent of Chinese tourists visit Nepal for trekking, hiking and other adventurous activities. “Since most of them come for trekking, the average length of stay of Chinese tourists is also comparatively longer than tourists coming from other countries.”
According to the Department of Immigration, a total of 153,602 Chinese tourists visited Nepal in 2018, while the country has received 106,050 visitors – of the total 782,600 tourists – from China in the first eight months of this year. “This is rise by 9.8 per cent compared to the same period last year.”
According to Nepal Association of Tour and Travel Agencies (NATTA) chair CN Pandey, the visit by the head of the state of China, the major source market of Nepal’s tourism, will have a positive impact to the tourism sector. Likewise, Nepal was given the Approved Destination Status (ADS) by the northern neighbour in 2002 and in June of the same year, Chinese citizens began visiting Nepal officially for the first time as tourists. Nepal was the 18th nation to receive the status and first in South Asia.
The joint statement issued by Nepal and China on October 13 said that the Chinese side would support Nepal’s Visit 2020 campaign and welcomed the Nepali side to participate in the travel marts being held in China.
Nepal aims to attract 2 million foreign tourists in 2020, including 350,000 Chinese visitors.
The United Nations (UN) World Tourism Organisation (WTO) reported that China was the world’s largest outbound tourism market in terms of spending in 2018. Tourism spending rose by 8 per cent year-on-year to $277 billion.

World Trade Report sees increasing role for services trade, need for global cooperation

The 2019 edition of the WTO’s World Trade Report highlights that services have become the most dynamic component of international trade and that its role will continue to expand in the coming decades. It stresses the need to enhance cooperation in the international community to support this expansion. The report was launched during the WTO Public Forum today by director-general Roberto Azevêdo.
“From logistics, to finance, to informatics, services have become the indispensable backbone of our economies,” said DG Azevêdo in his opening remarks. “Services generate more than two-thirds of economic output,” he said, adding that they account for more than two thirds of jobs in developing countries, and four-fifths of employment in developed ones. “But services also play an increasingly important role in international trade. Global value chains for merchandise could not function without logistics and communications services. And thanks to digitalisation, services that once had to be delivered face-to-face, like education, can now be delivered remotely.Yet services are often overlooked in discussions on global trade, and the extent of their contributions to global trade is not always fully appreciated. This report attempts to remedy this oversight.”
The report underlines that trade in services – ranging from distribution to financial services – can help countries boost economic growth, enhance domestic firms' competitiveness and promote inclusiveness. It illustrates how the share of services in international trade has continued to grow, and how technology, climate change, rising incomes and demographic changes will have an impact on services trade in the future. It also suggests ways to maximize the potential of services trade globally in the years to come.
On average, services account for about half of GDP worldwide. For developed economies, they account for around three-quarters of GDP and their proportion is increasing rapidly in developing economies.
According to the report, services trade has grown 5.4 per cent per year since 2005, while trade in goods has grown at 4.6 per cent on average. Trade in computer services and research and development have recorded the most rapid annual growth over the past decade.
According to the WTO Global Trade Model, a new quantitative trade model used by the WTO to make projections about global trade, the share of services in global trade could increase by 50 per cent by 2040. This is thanks to lower trade costs and the reduced need for face-to-face interaction due to digitalization. It is also dependent on policy barriers to services trade being lowered. 
Many developing economies are becoming increasingly services-based and their share of world services trade has grown by over 10 percentage points since 2005. However, services trade is concentrated in five developing economies – China; Hong-Kong China; India; the Republic of Korea and Singapore – accounting for over 50 per cent of developing economies’ services trade in 2017.
The report reads that services trade may help women and micro, small and medium-sized enterprises (MSMEs) play a more active role in world trade, particularly in developing economies, helping to reduce economic inequality. When MSMEs in developing countries start exporting services, they are on average two years younger than manufacturing firms. However, they export less than 5 per cent of total sales. Services are the main source of employment for women. However, the service sectors that account for most women employment have been so far among the least traded.
Despite their decline by 9 per cent between 2000 and 2017, barriers to trade in services remain much higher than in goods trade. This is largely due to the limited possibilities to supply certain services across the border and the regulatory intensity of many service sectors.
Technologies are key drivers of services trade, enabling cross-border trade of services that have traditionally needed face-to-face interaction. Digital technologies are also reducing the cost of trading services. The report finds that if developing countries are able to adopt digital technologies, their share in world services trade could increase by about 15 per cent by 2040.
The report notes that policy barriers to services trade – mainly regulatory measures – are much more complex than in goods trade. The authors of the report note that for services trade to be a powerful engine of economic growth, development and poverty reduction international cooperation will need to be intensified and new pathways will need to be found to advance global trade cooperation and make services a central element of trade policy.

UN forum spotlights digital trade facilitation measures to boost sustainable progress in Asia-Pacific

The 9th Asia-Pacific Trade Facilitation Forum (APTFF) closed in New Delhi, India today with a strong focus on how digital and sustainable trade facilitation measures and practices can bring prosperity for the region.
Organised by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and the Asian Development Bank (ADB), in collaboration with the Ministry of Commerce, India and Confederation of Indian Industry, the Forum discussed results of a new Global Survey on the progress made by countries in implementing trade facilitation measures and how to address remaining challenges in this area.
Developed economies aside, the 2019 UN Survey results confirm leadership of several Asian developing countries in digital trade facilitation implementation, notably Republic of Korea and China in East Asia; Singapore, Malaysia and Thailand in South East Asia; Azerbaijan and the Russian Federation in North and Central Asia; and India in South Asia. All 46 Asia-Pacific countries in the Survey made significant progress in making trade easier and more transparent over the past two years, with countries in North and Central Asia, in particular Kazakhstan, making most progress. Cambodia was the best performing among the least developed country (LDC) included in the Survey. Pacific Small Island Developing States are lagging behind as they face particularly difficult implementation constraints.
Over 270 participants from more than 30 countries at the biennial Forum shared experiences and perspectives on different aspects of trade facilitation for sustainable development, including trade finance, cross-border ecommerce, paperless trade and innovative applications of emerging technologies.
“Amidst global trade tensions, regional cooperation to cut red tape and automate trade procedures is more important than ever,” said UN under-secretary general and executive secretary of ESCAP Armida Salsiah Alisjahbana in her opening remarks. “Making trade easier and faster at lower costs by expanding cross-border trade digitalization and the simplification of international trade procedures, will help all firms in the Asia-Pacific region, particularly Small and Medium Enterprises (SMEs),” she added.
At the opening, India’s Minister of Commerce and Industry and Railways Piyush Goyal highlighted that India is working proactively to introduce a plethora of reforms including digitisation of trade procedures as well as ensuring improvements in the trading environment with reduced turnaround time and transaction costs.
The joint Asia-Pacific Trade Facilitation Report 2019 launched by ESCAP and ADB at the Forum noted that aiming for full digital implementation of the WTO Trade Facilitation Agreement (TFA) and enabling seamless electronic exchange of trade data across-border could cut transaction costs for the region by nearly 17 per cent. To accelerate progress in this area, all countries were encouraged to complete their accession to the Framework Agreement on Facilitation of Cross-border Paperless Trade in Asia and the Pacific.
The ESCAP-ADB report also highlighted the need to strengthen linkages between trade facilitation and trade finance, with financial technologies such as blockchain and artificial intelligence to be used to enhance the efficiency and availability of trade finance, especially for SMEs in the region.
“There is an enormous untapped potential in the rapidly evolving digital technologies,” ADB vice-president for Knowledge Management and Sustainable Development Bambang Susantono said, adding that emerging new technologies can help address long-standing issues of high transaction and processing costs, while mitigating the huge trade finance gap.
Going forward, the Forum noted the importance of better addressing the needs of SMEs and other more vulnerable groups such as women and those working in the agricultural sector, noting that only very few countries in the region have customized trade facilitation measures to support these groups so far.
Three initiatives were awarded APTFF Trade Facilitation Innovation Awards this year. The International Plant Protection Convention was awarded for its work on the Generic ePhyto National System (GeNS), PSA International Ltd and Global eTrade Services (GeTS) for enhancing digital connectivity for China-ASEAN trade, and Tuticorin CFS Association for its CoDEx: Container Digital Exchange.
ESCAP and IBM also signed an MoU on the sidelines of the Forum to conduct studies on how frontier technologies can be harnessed to make trade more sustainable and inclusive. This includes collaboration on TINA, a new online decision-support tool for trade negotiators from developing countries.

New WTO indicator finds services trade weakening

World trade in commercial services lost momentum through the second quarter of 2019 according to the WTO’s new Services Trade Barometer, launched today. The index’s reading of 98.4 is below the baseline value of 100, suggesting that services trade continued to face strong headwinds leading into the second half of the year.
The barometer is part of the WTO's efforts to develop new insights into services trade. Its June reading indicates a further weakening after services trade growth slowed during the first quarter of 2019. For comparison, during a recent peak in July 2018, the barometer registered 103.1.
Declines in most of the Services Trade Barometer's component indices drove the second quarter softening, as they signalled a broad loss of momentum across various services sectors. The passenger air travel index (95.6), construction index (97), and global services Purchasing Managers' Index (97.2) all fell further below trend in June. The financial services index (99.7) also dipped, finishing slightly below trend. The index for information and communication technology services (100.3), meanwhile, fell from well above trend in mid-2018 to on-trend in June. In contrast, the container shipping index (100.8) was slightly above trend and rising in June, following a multi-month slowdown.
Despite the overall loss of momentum since the start of 2019, services trade has generally held up better than goods trade since the latter is more directly affected by recent trade tensions. The importance of services trade to the global economy will be explored in greater depth in the forthcoming World Trade Report, slated for release on October 9.
The Services Trade Barometer – which will be released two times per year – highlights turning points and changing patterns in world services trade. Unlike its counterpart for goods, the fluctuations registered by the services indicator coincide with movements in actual trade flows, rather than anticipating them. Readings of 100 indicate growth in line with medium-term trends. Readings greater than 100 suggest above-trend growth while those below 100 indicate the opposite.