'Nairobi Package' to help exports of LDCs

Kathmandu, December 22

The World Trade Organisation (WTO)'s Ministerial Declaration at the recently concluded meet in Nairobi of Kenya is expected to benefit least developed countries (LDCs) like Nepal. The 'Nairobi Package' that was unveiled provides an opportunity to LDCs to enhance their export performance by exporting goods to developed and developing nations with 25 per cent value addition.

Even the South Asian Free Trade Area (SAFTA) — an agreement among SAARC countries — has a provision for value addition of at least 30 per cent to export goods within SAARC countries.

“Developed and developing countries have shown flexibility in supporting LDCs for their graduation to developing status,” said Naindra Prasad Upadhyay, secretary at Ministry of Commerce and Supplies. “We have to enhance our export performance by capitalising on this incentive.”

The provision has already come into effect along with the final Ministerial Declaration. The 10th Ministerial WTO was held in Kenya from December 15 to 19.

Secretary Upadhyay also informed that the affirmation of developed counties to eliminate subsidies on export of agricultural products (except a handful of products) by 2018 will also be supportive in expanding the export of agricultural products. Due to subsidies on export of agriculture products extended by developed countries, there is little room for LDCs to enhance agricultural exports. Abolition of export subsidy by the developed members will provide an opportunity to LDCs to increase export of agricultural products.

Similarly, the Declaration has also extended the right to increase tariff temporarily if there is an import surge that affects local industries. This situation could lead to increase in revenue and support industrialisation in countries like Nepal, which has been suffering from the problem of deindustrialisation after joining the global trade regime.

Besides, the Agreement on Information Technology (altogether 53 countries are signatories to this agreement) has given duty-free market access among its members. This could reduce the market price of IT products which could be beneficial to Nepal to import cheap IT products and utilise it for the development of society and export such products through value addition at competitive rates in the global market.