Kathmandu, October 18:

The European Union (EU) has launched a project named ‘Fair Trade in Nepal’ with a view to strengthen business links between Europe and Nepal, as well as to promote Nepali handicrafts in western markets.

Hridayesh Tripathi, minister for industry, commerce and supplies today officially unveiled the project under EU’s Asia Invest Programme-II jointly implemented by Formaper Agency of Milan Chamber of Commerce, Italy in partnership with the Consorzio Cooperazine Terzo Mondo, Italy, Fair Trade Original, Holland and Fair Trade Group Nepal (FTGN).

EU has provided a grant assistance of Euro 254,543 for the project, which is for a two year period.

The project is aimed at capacity building and support networking endeavours of FTGN with various European business organisations as well as to enable Nepali handicrafts sector to become more competitive for exports.

Tripathi said that the project would be helpful to promote Nepali exports, particularly at a time when major export commodities are experiencing a steep decline. “The volatility in export due to changing scenario in trade at the regional and global level has put the Nepali economy in a precarious situation,” he said.

He further stated that Nepal is seeking special and differential treatment under various trading arrangements to protect Nepali exports from further marginalisation due to openness of trade.

Stating Nepal’s unique position as being landlocked and ravaged economic condition, he urged for technical support and official development assistance.

He underlined the need for product and market diversification, as well as to take steps towards changing the composition of trade.

“Our focus should be on exporting commodities of comparative advantages, and also based on indigenous material and technologies,” Tripathi added.

“Still there remains a large array of unexplored Nepali products that needs identification, promotion and marketing for the benefit of people residing in the hinterland of the country,” said Tripathi, adding that the benefits of trade should be passed on to the poor people.

Eduardo Lechuga Jimenez, charge d affaires, Delegation of the European Commission to Nepal, said the project is a part of technical assistance under WTO obligations and was put on hold after the Royal takeover on February 1, 2005. However, the historic people’s movement in April this year has helped to reactivate it.

He informed that new projects and more funds would be made available to Nepal starting from next year as EC-Nepal bilateral cooperation under

the framework of Country Strategy Paper 2007-2013. Jimenez said that the project is an opportunity to strengthen EU-Nepal trade relationships.

Padmasana Shakya, chairperson, FTGN said that the main beneficiaries of the project would be more than 7,000 producers at the grassroots level under 16 member organisations all over the country. Of the total members of FTGN, majority are women from rural parts.