- By Rajan Sharma

It became difficult for Nepal to compete with other markets and meet destination market preferences and certifications

Nepal faced challenges in aligning its laws and regulations with WTO requirements due to issues within its legislative mechanisms. Additionally, there was a lack of coordination between various ministries and departments to address these challenges. Weak governance, corruption and inadequate infrastructure further hindered Nepal's ability to benefit from WTO membership. It became difficult for Nepal to compete with other markets and meet destination market preferences and certifications. 

Importing countries often impose rigorous technical standards and regulations, including quality, safety and labelling requirements which can be difficult for developing countries like Nepal to meet. These standards call for sophisticated testing and certification processes which Nepal has been failing to implement due to a lack of financial resources and technical expertise. Nepal has a limited capacity for effective negotiation in the WTO, resulting in less influence compared to developed nations. Additionally, the government lacks the appropriate mindset to support and protect the private sector in its endeavours which further hinder the country's ability to navigate and benefit from international trade regulations. 

Also, there is no commodity diversification in Nepal as both the government and the private sector are focused on a limited range of commodities. Although 34 items have been included in the NTIS 2023, no effective strategic mechanism has been developed to enhance their productivity or quality. The protection of patents and intellectual property, as well as the sanitary and phytosanitary measures required by developed countries, are lacking in Nepal. Underdeveloped countries like Nepal often lack the technical expertise and infrastructure needed to comply with these product and environmental standards, limiting their ability to export to lucrative markets. 

Furthermore, the lack of harmonisation in standards across different importing countries means that developing countries must often comply with multiple, and sometimes conflicting standards, which complicates their export efforts. Private standards often exceed national regulatory requirements and can vary widely between different markets and buyers. Meeting these requirements is a lengthy and costly process, as it often has to be done abroad. The cost of compliance with international standards is relatively high for producers and exporters in developing countries. This includes expenses related to upgrading facilities, obtaining certifications and maintaining ongoing compliance with changing standards. International support for addressing these problems has not been well channelled towards capacity building and domestic policy reforms. 

(Sharma is trade and transport logistic expert )