National 5 (Spotlight Weekly)

Nervous Embrace

Business community and government both welcome the granting of full fledged membership of WTO to Nepal, but with a fair bit of trepidation

By SANJAYA DHAKAL

Garment workers : Uncertain days ahead

April 23, 2004 will go down in the history of Nepal as a major turning point. This was the day when Nepal was formally granted the full-fledged membership of the World Trade Organization (WTO).

Efforts of the last 12 years – since 1989 when Nepal first tried to get the membership of General Agreement on Trade and Tariff (GATT), which is the predecessor of WTO – has come into a full circle.

Nepal has not only become the 147th member of the global rule-based trading regime, but also the first Least Developed Country (LDC) to enter the WTO fold through negotiations.

In its fifth ministerial meeting held in Cancun, Mexico, Nepal and Cambodia – two LDCs – had been granted membership. As per the WTO provisions, Nepalese government had to ratify the membership within six months to get the full-fledged membership. The cabinet had ratified the membership a month ago and had communicated the same to the WTO Secretariat. As a result, Nepal now has been granted the full-fledged membership with all the responsibilities and rights of WTO member.

“The efforts of the last 12 years were the easier part. Now we have to work hard to extract benefit from the WTO membership,” said Prachanda Man Shrestha, joint secretary at the Ministry of Industry, Commerce and Supplies (MoICS). Shrestha has been key government official – head of the WTO cell at the Ministry – who has been involved in long and arduous process of negotiations to get the membership.

“The real Yatra begins now,” echoes Rajendra Kumar Khetan, a leading industrialist and convener of WTO Cell at the Confederation of Nepalese Industries (CNI). “Even we stakeholders are scared. We don’t know how we are going to compete in global arena in the days ahead,” he said addressing a workshop held jointly by the MoICS and CNI on April 23 to mark Nepal’s formal entry into the worldwide trade network.

His views are shared by Chandi Raj Dhakal, first vice president of Federation of Nepalese Chamber of Commerce and Industry (FNCCI). “The road ahead is tough. Our major challenge will be to maintain international standard of our products and services. We hope the government will also act bearing our interest in mind,” he said.

“The government has committed to open up service sector and tear down revenue barriers. But it has to do so in such a way that the impact on domestic industries will be minimal,” said Surendra Malakar, vice president of Nepal Chamber of Commerce (NCC).

Nepal now needs to amend around 24 laws and 14 regulations to conform with the WTO rules. “We realize our changed goal from now onwards. But it is a matter of satisfaction that Nepal negotiated in quite flexible terms and conditions to get the membership,” said Commerce Minister Hari Bahadur Basnet.

Although there is a palpable sense of nervousness among both officials and business community; they, however, agree that there was no way out of WTO net.

“A whopping 97 percent of total global trade is conducted among WTO members. So, it is also a matter of relief for Nepal that it is now a part of that network,” said Dinesh Chandra Pyakurel, Secretary at the MoICS.

“Surely, we cannot remain isolated at this age. The only viable option before us is to deal with this head on and emerge victorious and prosperous,” said Khetan.

Among many things that Nepal now needs to carry out include amending its legislations, building institutions, enhancing capabilities, identifying and promoting products/services in which the country enjoys competitive advantage, diversifying exports and so on. The sooner it is able to carry out these tasks, the better it will be. Otherwise, as a saying goes – Perform or Perish.