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Órgano de Examen de las Políticas Comerciales

13 y 15 de marzo de
2012

EXAMEN DE LAS POLÍTICAS COMERCIALES
NEPAL
Acta de la reunión
Addendum
Presidente: Excmo.
Nepal's efforts to mainstream trade into its national process, improve donor coordination, and implement the NTIS priorities are supported by the Enhanced Integrated Framework, in particular through a multiyear project for enhancing institutional capacity.
In addition, a Hydropower Development and Investment Company has been registered with a view to set up an effective mechanism for scaling up investment in energy sector by mobilizing domestic and external resources.
Response:

The National Food and Nutrition Security Plan of Action (FNSP) has been proposed with following objectives;

Food availability through production and international trade,
Access to foods through programs to fight hunger such as own productions, market mechanisms, social safety-nets,
Utilizations of foods for better nutritional outcomes, diversified and micronutrient rich diets, food quality, standards, safety,
Stability in food markets through price stabilizations, disaster managements,
Response:

In order to encourage foreign investment in hydro-electric sector in Nepal, the Government has made strong commitment to build environment conducive to reliable security measures, industrial peace, simple and preferential tax system, and repatriation of the investment.
In order to simplify the licensing procedures for hydropower generation projects and also to make them scientific, the Ministry of Energy has issued new Directives on the procedures for licensing of hydropower generation projects on 29 January 2012 by exercising the power conferred to it by Rule 94A of the Electricity Rules 1993.
The 'Green Revolution' package for the Terai Region and high value commodities for the Hill Region are the strategies for achieving catch-up growth, agribusiness development, poverty reduction and environmental improvement.
Meanwhile, the National Food and Nutrition Security Plan of Action (FNSP) has been proposed with following objectives;

Food availability through production and international trade,
Access to foods through programs to fight hunger such as own productions, market mechanisms, social safety-nets,
Utilizations of foods for better nutritional outcomes, diversified and micronutrient rich diets, food quality, standards, safety,
Stability in food markets through price stabilizations, disaster managements, coping mechanisms to changes in climates, etc
Cross-cutting aspects related to development of policies, legislations, institutions, human resources, information systems, etc.
Page 26, Para 68

In the 2010/11 OECD/WTO Aid for Trade Questionnaire, the Government of Nepal assesses that, so far, aid for trade has shown only limited contribution to its overall goal – increased economic growth and poverty reduction – and to its aim of increasing and diversifying exports.
The other main hurdles include lack of alignment of Aid for Trade with government priorities, gap between disbursement and commitment, more focus given to software than hardware and lack of appropriate apparatus to track Aid for Trade funding at the national level.
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The Secretariat report describes Nepal's export taxes applied on some products, including on wood: "/…/For example, levying export tax on wood tends to discourage the export of wood.
Response:

The Interim Constitution of Nepal, 2007 guarantees labour related rights by stipulating that every worker and employee shall have the right to appropriate labour exercise and that every worker and employee shall have the right to form and join trade unions and to engage in collective bargaining for the protection of their respective interests, as provided in law.
As the rules applied by the exporting countries may, therefore, be different, the same good undergoing the same manufacturing process in one exporting country will obtain the origin of that country, while maintaining its previous origin if exported from another country.
(2) Measures Directly Affecting Exports

WTO Secretariat's report, pages 38 – 41

What measures – if any – does Nepal take to ensure that goods destined for export are produced in full respect of the fundamental rights at work as embodied by the ILO's 2008 Declaration on Social Justice for a Fair Globalisation and the 8 core ILO Conventions (nos.
In cases where the provisions of national labour laws are inconsistent with the provisions of the ILO Conventions ratified by Nepal, the provisions of the ILO Conventions prevail over the provisions of national labour laws, pursuant to Section 9.
Second, it has formulated a draft accreditation bill, which after the approval of the Parliament will be implemented, thereby leading to the establishment of National Accreditation Board.
procurement process and methods have not been defined, a procurement reporting system has not been established, an e-procurement system does not exist, and IT application has not been introduced.
Similarly, according to Section 34 of the Copyright Act, 2002, in cases where any person suspects that any other person is importing copyrighted materials into Nepal in an unauthorized manner, such a person may make an application, accompanied by the evidence, to the Custom Officer to prevent the importation of such material; and in cases where, in conducting necessary investigation upon receipt of such an application, the demand of the applicant appears reasonable, the Customs Officer may prevent the materials to be imported for a maximum of twenty working days, ten working days at a time.
Response:

In order to mitigate the energy crisis in the country, the Government of Nepal has taken the following measures:

Hydropower projects, especially the implementation of the big reservoir based projects, have been given priority in order to minimize the imbalances of power generation and demand during rainy and drought season.
Response:

The identified priority areas for investment are the development of water resources, in particular hydropower generation and transmission; tourism; infrastructure development, such as roads, airports and railways; agriculture; education and health sectors; as well as the industries in which Nepal has comparative and competitive advantage.
TRADE AND INVESTMENT REGIMES
(5) Investment Framework

(Question 1: Page 18, para 29, 30)

Could Nepal elaborate on the measures planned to be taken by the newly established Board of Investment to attract foreign investment,
To do this, it plans to offer one-window service where, an investor who enters into its office should be able to get all his/her issues resolved from the same place, including registration, licensing, immigration issues, and bill clearance.
The 'Green Revolution' package for the Terai Region and high value commodities for the Hill Region are the strategies for achieving catch-up growth, agribusiness development, poverty reduction and environmental improvement.

In addition to these, the Government of Nepal has launches Karnali zone special Agriculture program, special Agriculture program and school feeding program for disadvantage people of remote districts and have prioritized road connectivity to all 75 districts headquarter within 3 years.
Similarly, under the Foreign Investment and Technology Transfer Act, 1992, if any dispute arises between a foreign investor and national investor or the concerned industry, the concerned parties are required to settle the dispute by mutual consultations in the presence of the Department of Industries.
which is being implemented through the Nepal Trade Integration Strategy (NTIS) 2010 adopted on 24 June 2010, recognizes the effective role of trade in achieving sustainable and inclusive economic growth, and in transforming a traditional agrarian economy into a modern economy.
Are the pattern and nature of such free trade agreements (bilateral agreements), whether already concluded or currently subject to ongoing negotiations, comprehensive; put another word, do they cover trade in goods, trade in services,
3, Nepal exempts tariffs for 15 products from the WTO Members; however, it exempts specific products only from certain countries, such as India.
A foreign investor or dependent family or authorized representative of such a foreign investor and dependent family of such authorized representative is, for the purpose of stay in Nepal, provided a business visa until such foreign investment is retained in Nepal.
Moreover, banks and financial institutions have to provide certain percentage of their total lending to the deprived sector, which includes the lending of up to 10 million Nepalese Rupees for micro-hydropower projects generating up to 500 Kilowatt of power.
The Government of Nepal has outlined several measures in Trade Policy 2009 to expand both exports basket and exports destination, which include:

Initiatives will be taken to enter into agreement on Free Trade Area with countries including United States of America and European Union that possess comparatively more trade prospects, and other regional trade organizations for expanding access to international markets for Nepal's exports.
UNITED STATES

WT/TPR/G/257

Page 12, Paragraph 19 and WT/TPR/S/257, Page 55, Paragraph 117: Paragraph 19 of the Government Report notes that Nepal has taken "some initiatives for framing a separate intellectual property policy in the future;" and, paragraph 117 of the Secretariat Report says that Nepal "intends to promote copyright protection through more campaigns.

It is expected that the proposed Intellectual Property Policy will include necessary legislative changes for an integrated intellectual property promotion and protection system and administrative reforms and streamlining, as well as will cover the following topics and area for Nepal:

Patents, trademarks, industrial designs, geographical indications, copyrights and related rights, integrated circuits, trade secrets etc.
Likewise, to strengthen the institutional capacity of the enforcement agencies, various training programmes have been carried out with the support of international organizations, such as the WIPO, and bilateral development partners, such as Japan Copyright Office.
For the full-fledged implementation of it, the Competition Promotion and Market Protection Rules have been framed and with the generous technical and financial support of our development partners, such as the USAID, the Government of Nepal is preparing comprehensive Guidelines for implementing all the provisions of the Act in practice.
Given that weakness in the energy sector is such a significant impediment to Nepal's economic progress, what is the Government doing to ensure that the sector is transparent and accountable, so that capable and qualified private companies can actively participate in the development of Nepal's energy sector?
Response:

Under the Foreign Investment and Technology Transfer Act, 1992, and the notification of the Government of Nepal referred to in the question, no restriction on foreign investment exists in the sectors identified in the question, except in rural tourism where no foreign investment is permitted.
Response:

Nepal has a bilateral trade agreement and local trade in place with India, which limits the documents required to support Customs clearance from India to Nepal for the locally purchased goods on importation.
There is a provision of providing refinance facility at a concessional interest rate but none of the export oriented firms has used this facility.
However, further reforms and liberalization largely depend upon the needs of the country taking into consideration the fact that the country has not yet been able to take maximum benefits from the existing liberalization of service sector.

EU's initial question 3: Can Nepal confirm that economic activity undertaken in relation to a new or existing investment must respect Nepal's national labour law, the fundamental rights at work as embodied by the ILO's 2008 Declaration on Social Justice for a Fair Globalisation and the 8 core ILO Conventions (nos.

EU's initial question 7: The Secretariat's report states that "Between 2002/03 and 2011/12, despite the overall reduction in the simple average MFN tariff rate, the applied MFN tariff rates increased on dairy products, coffee and tea, cotton, and other agricultural products n.