Nepal gears up for final talks on WTO

By Bhaskar Sharma

KATHMANDU, Aug 7 : Nepal is to take part in another round of bilateral negotiations and Working Party meet for its accession to the World Trade Organisation (WTO) in Geneva next week. The upcoming talks are likely to be the final.

Government sources talking to The Kathmandu Post asserted, "We are confident that the upcoming round of talks will be final." The talks are slated to begin on August 12. An informal meet of the Working Party will convene on the first day, followed by two days of bilateral negotiations.

"On the 15th of August, a formal Working Party meet will be held. The last day’s meet will wrap up Nepal’s accession process by endorsing all understandings reached between Nepal and other negotiating countries," the source said.

While the upcoming round of bilateral negotiations is the sixth held so far, the Working Party meet is the third. Nepal has been negotiating for WTO accession with India, United States, European Union, New Zealand, Australia, Canada, and Japan, among others.

Nepal has successfully concluded its negotiations with most countries, barring the US and Canada. A few outstanding issues relating to market access and systemic track, which encompass the rules under the global trade regime, remain unresolved.

However, officials asserted that the outstanding issues are trivial in nature, and added that they would surely be sorted out during the upcoming round of accession talks. "The market access issue is related to a few agriculture tariff lines, which the systemic issues deal with the language with the earlier Working Party report"

Successful conclusion of the talks could pave the way for Nepal’s entry into the WTO during the upcoming fifth ministerial meet of the global trade regime that is to be held in the Mexican resort city of Cancun from September 10-14.

Likelihood of Nepal’s, including Cambodia’s, WTO entry during the upcoming ministerial conference heightens due to the fact that none of the least developed countries have acceded the WTO since the global trade regime came into being in 1995.

Since the WTO members have failed to make much progress on the Doha Development Agenda, set during the fourth ministerial conference held in Doha, Qatar, in November 2001, the two countries are likely to be taken in as member in gesture of goodwill.

The WTO also failed to take address the issues of concern raised by the developing and least developed countries during the Doha meet. All deadlines relating to the formulation of modalities for negotiations on agreements relating to intellectual property rights and agriculture, which the weaker economies had been demanding, have been missed.

Nepal had made substantial progress on bilateral negotiations and an informal Working Party meet last month. A number of important decisions were made then. Negotiating countries had agreed to provide Nepal with a transition period to comply with various WTO agreements, including trade related aspects of intellectual property rights, sanitary and phyto-sanitary measures, technical barriers to trade, and customs administration, among others.

Negotiations with New Zealand, Australia, European Union and Japan were concluded during the same negotiations last month. Nepal had even signed formal agreements with New Zealand and Australia. Negotiations with India had been completed much earlier.

Nepal had first applied for membership of General Agreement in Trade and Tariffs (GATT) in 1989 following a trade embargo by India that had virtually crippled Nepal. Nepal then was given an observer’s status, which continued after GATT was succeeded by the WTO in 1995. So far, Nepal has taken part in five rounds of bilateral negotiations and two rounds of formal Working Party meets.

Inter-Govt committee meet to begin on Aug 19

Post Report

KATHMANDU, Aug 7 : Nepal-India Inter-Governmental Committee (IGC), a committee headed by commerce Joint Secretaries of respective countries, meeting is going to be held in Kathmandu from August 19 to 20, said a government source.

The ritualistic meeting, which is held twice a year to review the bilateral trade and constraints, would be dominated by issues like Indian embargo on Nepali vegetable ghee and other tariff and non-tariff barriers to Nepali products, among others.

"Of major agendas, Nepal would seriously raise the latest notification of Indian revenue department not to refund excise duty (despite the Duty Refund Procedures) in case it is below Rs 500," the source said.

This notification is feared to siphon off millions of rupees in revenue from Nepali government, as equivalent discount to the product is pledged here hoping to make up the loss through the refund of the duty.

Nepali officials would also raise the issue of Bilateral Railways Agreement, particularly asking India to revoke its stand to effect Indian Railways Act on the cargo train operation from Kolkata to Birgunj-based dry port till Nepali Act comes into effect. This provision of the Act had drawn flak from the political front, whereby the cabinet rejected the proposed draft agreement.

Referring to the stalemate in ghee export, the source said, "The issue will be discussed thoroughly as India has still not allowed the entry of vegetable ghee to India despite promising to resolve the problem soon."

The export of the largest Nepali export to India has been stalled since last four months after the Indian ghee manufacturers filed case against Central Warehousing Corporation (CWC) seeking changes in the existing import procedures in India.

And the State Trading Corporation (STC), a new agency that the Indian government constituted to oversee ghee import to India two months back, is yet to work out the import modality.

Recently, the STC authorised two companies, namely Rasoi Limited of Kolkata and Ruchi Soya of Delhi for procuring vegetable ghee from Nepal for Indian consumption. However, both companies themselves are producers and not traders and Nepali exporters have raised a serious concern over the arrangement.

"The direct consumption of Nepali ghee by the Indian manufacturers is feared to threat the identity of Nepali products in the market," said Manish Agrawal of Shree Krishna Refinery, a local vegetable ghee producer. Also, the procurement price floated by these companies was far too less for local ghee producers to accept, he added.

Besides the issue of vegetable ghee, the imposition of 75 per cent Additional Customs Duty on Nepali beer exports would also feature the IGC meet.

SAFTA likely to come into effect next year

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KATHMANDU, Aug 7 : The much-awaited SAFTA (South Asia Free Trade Area) draft-treaty would be finalised this year and might formally come into effect from next year, said QAMA Rahim, Secretary General of South Asian Association for Regional Cooperation (SAARC) today.

"The fourth round of meeting of the committee of experts will finalise the draft and it will pave the way for better economic cooperation in the South Asian region," he said.

Rahim said this while speaking at an interaction on regional cooperation organised jointly by Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and SAARC Chambers of Commerce and Industry (SCCI).

He further said that the member nations should develop promotional, protective as well as pro-investment programmes to derive benefits from the free trade area.

Ratnakar Adhikari, Executive Director of South Asia Watch on Trade, Economy and Environment (SAWTEE), meanwhile, stated that countries like India and Sri Lanka, which are associated with multiple regional blocs, are not very committed to economic cooperation in the SAARC.

He further said that regional economic cooperation should be viewed in the context of diverse opinion that experts express on regional blocs.

"Various blocs have, in fact, widened the income disparity among members than closing the gap and have failed in their objectives. Facts like these should not be overlooked," he said.

Highlighting the higher degree of socio-economic disparity among SAARC member countries, Professor Dr Madan Kumar Dahal shed light on the benefits that countries having poor socio-economic indicators could reap from the regional economic cooperation. He even proposed the establishment of SAARC Capital Fund and University.

Binod Bahadur Shrestha, President of the FNCCI said that the federation would soon publicise its concept paper on economic cooperation in the region.

"In the current global village, no country can afford to remain aloof and SAARC chambers was constituted recognising this fact," said Padma Jyoti, President of SCCI.

Sabin Joshi of Kathmandu College of Management, Ishwor Bhatta of Central Department of Economics and Kiran Pundit of People’s College had presented separate papers on regional economic cooperation at the programme.

Garment exports up 51 pc

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KATHMANDU, Aug 7 : The readymade garment exports during the first seven months of 2003 saw a robust growth of 51.48 percent, as the major consumer markets started witnessing better economic scenario.

Nepal exported garments totaling to US $92.12 million as of July in 2003, states statistics released by Garments Association Nepal (GAN). Export of the largest foreign currency earner of the country during the corresponding period last year was US $60.81 million.

Garment exports to the United States alone soared by over 58.28 percent during the period to stand at US $ 83.03 million against the export of US $52.47 million of the like period of previous year. The US alone absorbs almost 85 per cent of the total garments exported abroad from Nepal.

Its exports to EU, as per the GAN recommendation for certificate of origin, recorded an increment of 4.51 percent to US $8.56 million up from US$ 8.19 million of the corresponding period of last year.

Likewise, exports to Canada soared to US $0.54 million. Garment exports to Canada during the first seven months last year was worth US $ 0.15 million.

The month-wise growth breakdown reveals that garment exports to the US went up by 43 percent in July this year, while during the same month last year it had slid by 44 per cent.

However, when garment exports is compared on a consecutive month-to-month basis, July’s export volume is down for the fifth straight month. July’s export volume is almost 53 percent less than the export recorded in February this year when garment worth US$ 1.69 million was exported.

The garment exports to the US market had declined continuously for 13 months before recovery set in during August last year. Its exports had begun declining after the US Congress allowed duty and quota free market access to garments manufactured in Caribbean and sub-Saharan African countries in 2000.

The latest series of growth seen in garment exports comes to the relief of entrepreneurs and government alike. Entrepreneurs hope that the growth figures would improve and sustain in the long run.

The upturns come at a time when Nepal is requesting the US Senator to forward the revoked draft-bill back to the US Congress and allow preferential entry to Nepali garments in the US markets.

The bill can pave way for a revocation of 18 percent duty subjected on Nepali garment exports.

Nepali garments, at their highest level, accounted for only 0.1 percent of total garments and textile imports into the US, generating a mere US$ 29.5 million in revenue for the US government.

Green tea leaves export increases

POST REPORT

ILAM, Aug 7 : The export of the green tea leaves from the district witnessed a significant increase in the last fiscal year.

The total export of the tealeaves through Pashupatinagar customs during the last fiscal year was 208,140 kilogram as compared to 94,551 kilogram of the previous year.

The export surged in the previous year as the agents of India based tea factories offered handsome price.

"The quality of tea produced in Darjeeling, India has been continuously degrading as the tea plants are growing older.

So the Darjeeling based tea factories have been importing green tea leaves in a larger quantity from Nepal and selling them in the international market with affixing logo of Darjeeling Tea," said Chandra Bhushan Subba, a tea expert.

Earlier, tea farmers had protested against the tea factories demanding to increase the price of green tea leaves, but could not succeed. Now, the local tea factories have been purchasing the tealeaves from the farmers at Rs 16 to 20 per kilogram while the Indian buyers pay Rs 27.50 a kilogram to the farmers.

Meanwhile, the export of the tealeaves came to a standstill last week after the Customs Department sent a letter to the local customs office asking to carefully check the export documents, including the certificate of the origin while exporting the tea leaves.

Nepse enlists NIBL, HBL bonus shares

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KATHMANDU, Aug 7 : Nepal Stock Exchange (Nepse) today enlisted 686,470 units of bonus shares issued by the Nepal Investment Bank Limited (NIBL) , states a press release issued by the Nepse here today.

The bank’s sixteenth annual general meeting had approved the bonus shares that were enlisted today. Likewise, another 390,000 units of bonus shares of Himalayan Bank Limited (HBL) was also enlisted today by the Nepse.

The enlisted bonus shares of HBL were approved by the bank’s tenth annual general meeting. The Nepse’s statement further reads that the enlisted shares will be opened for trading only from tomorrow. While the NIBL’s bonus shares were issued at a ratio of 10:3, the HBL’s shares were issued at a ratio of 10:1.