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Press/356
11 September 2003
ACCESSIONS

WTO Ministerial Conference approves Nepal’s membership

The WTO’s Ministerial Conference approved today (11 September 2003) by consensus the text of the Protocol for Nepal’s entry into the WTO. Nepal will be the second least-developed country (LDC) to joint the WTO, after Cambodia, through the full working party process.

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Nepal’s accesion
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Nepal still has to ratify the agreed terms and inform the WTO. Thirty days after that it will become a member. When these steps are complete, Nepal and Cambodia will bring the WTO’s membership to 148. Nepal applied to join the WTO in May 1989. The working party to negotiate the terms of accession was established in June and after three formal meetings completed its mandate on 15 August 2003.

“The completion of Nepal’s accession negotiations is most welcome. Not only does it expand the number of total WTO members, it also increases the diversity and depth of the WTO community of members”, said WTO’s Director-General, Supachai Panitchpakdi, commenting on the approval of Nepal’s accession.

“All accessions, whether big or small, are about creating equal opportunities for growth and prosperity. Accession and membership of the WTO are, fundamentally, about commitment to improvement of the standards of living of the citizens, both economically and physically. Indeed that is the theme of this Ministerial Conference and the Doha Development Agenda”, said Dr Supachai.

After the approval of Nepal’s accession, the head of the Nepalese delegation, Hari Bahadur Basnet, Minister of Industry, Commerce and Supplies, said: “It is our conviction that joining this organisation would not only enhance our effectiveness and efficiency in trading capacity but would also result in the expansion of trade, leading to a higher level of growth and enhancement of quality of life of our people.”

Under the chairmanship of Ambassador Pierre-Louis Girard of Switzerland, the WTO Accession Working Party concluded, on 15 August 2003, 14 years of negotiations with Nepal and agreed to forward several hundred pages of legal texts for formal acceptance by the 146 member governments of the WTO. The documents adopted today by the Ministerial Conference are the report of the Working Party for the Accession of Nepal, the protocol of accession, which includes the terms of membership, and the schedules of Nepal’s commitments on market access for goods and services.

Nepal has a population of 23 million and a per capita income of US$240. Agriculture is the main source of income and employment, and accounts for 41% of GDP and more than 80% of employment. Tourism is one of the most import services sectors and contributes about 12% of the total foreign exchange and 3.8% of GDP. Nepal has been increasingly developing hydroelectric energy resources. India is the most important trading partner of Nepal.

According to the latest WTO data, Nepal's merchandise exports were US$645 million in 2002, and its imports were US$1.4 billion. From 1990 to 2000 Nepal experienced an annual percentage export growth of 15 percent, but there was a 13 percent decrease in 2002. Imports grew at an annual percentage rate of 9 percent between 1990 and 2000 and decreased 5 percent in 2002.

  
The importance of membership

During the negotiations, Nepal said that notwithstanding a difficult economic and political environment Nepal had sought to systematically reform and open its economy. The Government had liberalized the economy unilaterally over the years because of the conviction that economic reform and trade liberalization would attract investments, promote development and, contribute to generate productive employment and alleviate poverty, in a general framework of equity, participation and market-based efficiency.

Members of the WTO expressed the view that WTO membership would be important for Nepal’s development and integration into the world trading system and would also constitute a major step forward in the WTO evolution to achieving the goal of universality and representation of the interests of all trading nations.

Some of the commitments

By joining the WTO, Nepal can now fully enjoy the rights that all members have under the WTO agreements, such as non-discrimination by other WTO members and the ability to use the WTO’s dispute settlement procedure.

In return for those rights, like all WTO members, Nepal has accepted some obligations under the WTO agreements. Details of how Nepal is to apply or phase-in these obligations are spelt out in the membership agreement which consists of a report from the working party that negotiated the deal, and schedules or lists of commitments on import duties for goods and market access for service providers.

These are some highlights of the working party report, which was adopted on 15 August:

Services

As a result of the negotiation, Nepal agreed broad commitments in 11 services sectors, revealing its clear belief in the benefits of liberalisation as an engine for future growth and prosperity.

Tariffs

Nepal accepted an average tariff binding of 42% in agricultural products and around 24% in industrial goods. The majority of the import items fall in the customs duty range of 10–20%. The maximum tariff rate of 130% applied to cars and jeeps will be reduced as specified in the goods schedule. A minimum tariff rate up to 5% applied for daily consumption items.

  
LEGISLATIVE PLAN OF ACTION

Customs

Legislation on the valuation of imports for customs and taxation purposes conforming to the requirements of the Agreement on Customs Valuation would be enacted by 1 July 2004. Nepal would progressively implement the Agreement on Customs Valuation in accordance with the action plan and full implementation will start from 1 January 2007.

Sanitary and Phytosanitary Measures

Nepal will implement fully the provisions of the Agreement on Sanitary and Phytosanitary Measures by 1 January 2007 following an action plan in different stages which started with the adoption of the Food Act and the implementation of Codex Alimentarius, and will continue with the establishment and operation of a single enquiry point.

Technical Barriers to Trade

Nepal will progressively implement the Agreement on Technical Barriers to Trade in accordance with the Action Plan submitted during the negotiations and would implement fully the provisions of the Agreement on Technical Barriers to Trade by 1 January 2007.

Trade-Related Intellectual Property Rights

As a least-developed country, Nepal is preparing the new Industrial Property (Protection) Act, which would incorporate all the substantive provisions of the TRIPS Agreement. It would cover all categories of industrial property and would incorporate the basis for an adequate enforcement and be promulgated no later than 1 January 2006.

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H.E. Mr. Hari Bahadur Basnet, Minister of Industry, Commerce and Supplies of Nepal and WTO Director-General Supachai Panitchpakdi at the signing ceremony for the protocol of accession of Nepal to the WTO
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