March 25, 2005

The book discusses challenges and opportunities of joining the World Trade Organization

By A CORRESPONDENT

Joining the international trade body like World Trade Organization (WTO) for Nepal has many opportunities as well as challenges. Despite many years of preparation and planning, Nepal is yet to identify the areas for opportunity.

Nearly a year has already passed since Nepal secured the membership of World Trade Organization (WTO) but it is yet to make laws and develop system as demanded by the WTO. Some efforts have already been made to amend the laws but they are not enough to meet the requirements.

WTO Membership : Opportunities and Challenges For SSMEs in Nepal Edited by : Navin Dahal and Bhaskar Sharma Published by : SAWTTE and FNCCI Pprice : Undisclosed Page 103

In the period since Nepal's entry into the WTO, two governments have already changed and the new government is yet to announce its policies and programs to show how much it is committed to the WTO regime. Unlike many other developed countries, Nepalese economy is based on Small and Medium Enterprises (SMEs). If there will be any impact, these SMEs will have to face them.

"Though Nepal's membership to the WTO is likely to bring opportunities in many areas, there may appear new forms of challenges as well. This clearly necessitates that the Nepalese SMEs are given high priority, and adequately provided with proper safety nets so that they survive within the multilateral trading order. At the same time, high priority should also be given to make timely reforms in policies and working strategies in order to improve the competitiveness of SME sector," writes Binod Bahadur Shrestha, president of Federation Nepalese Chamber, Commerce and Industries (FNCCI).

Like all other developing countries, the medium and small scale enterprises holds key role in sustaining the economic growth generating employment by using locally available raw materials and resources. The markets of such industries, however, often are export oriented. In Nepal's case, Nepal's export relies on the production and quality of SMEs.

Following the end of quota for Nepalese garments in United States, many SMEs that operated to produce garments to export to the America markets have already closed down rendering tens of thousands of people unemployed.

"We at FNSt highly welcome Nepal's move to become member of the World Trade Organization (WTO) as it come with the obligation to implement necessary reforms, which will pave the way for development of market economy and rule-based trading system. Nepal's WTO membership will bring opportunities as well as threat," writes Hubertus von Wlok, regional director South Asian Region FNSt. "A new vision would be required to counter the challenges confronted by the Nepalese SME sector."

Based on the paper presentations in a seminar, the book discusses various issues regarding the challenges and opportunities available to the SMEs following Nepal's joining to the WTO.

Altogether seven papers were included in the book including the discussion at the meeting. "Cumulative statistics of registration show that the number of micro and cottage units between fiscal year 1992 and fiscal year 2000 reached 50,000 while that of small industrial units during the same period crossed over 90,000. However, the total cumulative and updated information about the number of units in existence and in operation is not available," writes Govinda Pandey in his paper titled Problems and Prospects of SMEs in Nepal.

In his paper Standards Related to WTO Agreements: Opportunities and Challenges for SMEs, Dr. Posh Raj Pandey discusses various concepts regarding the WTO trade regime and Nepal's requirement to fulfill certain obligations.

Ratnakar Adhikari, executive director of SWATEE, discuses the Trade Remedy Measures as a mean to protect and promote SMEs. " Nepal's accession to the World Trade Organization (WTO) is the manifestation of its desire to lock the trade liberalization thereby ensuring a transparent and predictable business environment," writes Adhikari.

WTO Membership: Opportunities and Challenges
For SMEs in Nepal
Edited by: Navin Dahal and Bhaskar Sharma
Published by: SAWTEE and FNCCI
Price: Undisclosed
Pages:103