Advancing Nepal’s Trade Agenda T hrough Effective Implementation of NTIS 2010 Chandra Ghimire Joint Secretary, Ministry of Commerce & Supplies Presented to A GoN-Development Partners Consultation Meeting Kathmandu, Nepal, 07 February 2011

Outline of the Presentation Objectives of today's Meeting Why Trade is a Must? And What approach serve the best? Current Status of NTIS Implementation – Briefing on NTIS 2010 – Problems/obstacles for implementation – Approach and strategies followed by GoN to overcome problems for successful implementation of NTIS 2010 – National Implementation Arrangement What do we expect from our DPs? Conclusion

Objectives of Today’s Meeting To brief on implementation status of NTIS 2010 Hearing from DPs- on possible way out for coordinated efforts in advancing Nepal’s trade agenda Obtaining DPs’ commitments for specific NTIS activities

Why TRADE is a must ? "Inclusive Growth" is a pre-requisite for alleviating poverty, Trade is an engine of "Inclusive Growth", Export is a triggering factor for Trade, since: – Nepal has comparative & competitive advantages in certain goods & services, – Nepal's own internal market small but huge markets available in its two giant neighbors with miracle growth – Value addition seems in certain goods to be very high – Market access available through multilateral, regional and bilateral arrangements – Being a LDC special privilege i.e. DF (zero-tariff in EC, Australia, Canada, HK, India, China, Japan, USA etc.)

What Approach the Best Serving? By increasing supply side capacity of the country By promoting the goods & services with high value addition By focusing on 'inclusive growth', i.e. employment & income, supporting marginalized areas & groups NTIS 2010 in effect to serve these approaches

National trade strategy to enhance 'supply side capacity' for Nepal's space in global market; Prioritized strategy launched by PM himself on 24 June 2010 An outcome of analysis & consultation with:  National stakeholders i.e. Government agencies, business organizations FNCCI, CNI, CoC, product associations, national  International experts, DPs  But steered by GoN What is NTIS 2010?

19 goods & services identified as priority items; Plus 5 other goods/services suggested; 10 most potential destination markets identified; Engaging of multiple agencies, i.e., GoN's 17 ministries/agencies as well as business organizations; An Action Matrix under four strategic objectives suggested; Product specific actions for priority export sectors suggested; 3-5 years period for implementation; Salient Features of NTIS 2010

Having 4 strategies: Strengthening trade negotiation Strengthening NTB related domestic capacity Strengthening supply capacity of "inclusive exports” Strengthening capacity for managing AfT & TRTAs Having 87 cross cutting actions and 171 product/service specific & total 268 actions to be implemented. Salient Features of NTIS 2010….

Poor capacity to capitalize the opportunity of WTO accession and various RTAs/FTAs; Poor mainstreaming of trade; Steadily growing trade deficit over last FYs; Poor implementation of DTIS 2004 and needs of updating it as per changed contexts; Challenge of 'Inclusive Growth‘ as TYP for poverty alleviation & peace dividend; Economic agenda in shadow in the current transition; Problems of Nepal’s Trade Sector (Obstacles for NTIS Implementation)

Strategies and Approaches to overcome Mainstreaming trade into the national development agenda Allocated matching fund from the GoN for NTIS 2010 Intensified dialogues with the stakeholders, including our development partners Deeper inter-agency consultations at all possible levels (GoN agencies, private sector and DPs) on the NTIS implementation Strengthening national capacity both at institutional and HR Scrutinizing possibility of an effective aid mobilization mechanism on trade (Trust Fund, Trade SWAp etc..) Increased voice at international level ( Representing board member in EIF, Geneva)

EIF/NTIS Implementation Arrangement in Nepal NSC Focal PointTechnical Committees (TCs) Technical Committees (TC) 1.Agriculture, agro-industry, NTFP, and SPS 2.Private Sector Development (Manufacturing, SMEs, SEZ/EPZ and TBT) 3.Legislation and Intellectual Property Rights (IPRs) 4.Services and taxation 5.Cross-Cutting Issues and Trade-related Infrastructure Development Technical Sub-Committees (TSC) To be constituted by TC as required. NIU Donor Facilitator TSCs NECTRADE DPs

Illustration of National Arrangements - How it works ? NSC: as the APEX BODY for overall guidance & inter agency coordination Focal Point: as LEADING the initiatives of MoCS NIU at MoCS: as NTIS EXECUTING, RESOURCE MOBILIZING & FACILITATING 5 Extended NIUs (TWGs): as FORMULATING & IMPLEMENTING projects Sectoral ministries/agencies: As IMPLEMENTING PARTNERS Business associations: as STAKEHOLDERS involved in the NSC & various implementation activities M&E mechanism: – Via existing national M&E system – Objective based M&E indicators yet to develop

Recent Updates on NTIS Implementation GoN allocated around US$ 1 million – Budgetary commitment reflected – GoN’s budget likely to grow in the yrs ahead Concept of having a ‘Trade Trust Fund’ underway – one ‘Task Force’ formed Reoriented sectoral ministries so as to gain complementary attribution Government of Germany selected as the New DF National implementation mechanism for trade mainstreaming operationalized

Recent Updates on NTIS Implementation EIF Tier 1 NECTRADE is in place, – Capacity issue of MoCS and relevant ministries/agencies, including trainings of officials and private sector – Coordination for NTIS implementation – Develop and support implementation mechanism Continuous dialogue with the PRIVATE SECTOR to engage them in implementation process Developing project proposals in close cooperation with the line ministries and private sector for Tier 2 funding (EIF and local DPs)

What do we expect from our DPs? 1. What we need? – TRTAs – Effective operationalisation of AfT – Sharing of ideas & experiences – Coordinated delivery of the inputs from DPs 2. Why do we need that supports? – DCs are committed in global forums to provide LDCs with AfT & TRTAs – Nepal per se in its big transformation

What do we expect from our DPs? 3.DPs support to meet resource gap, since: a)Nepal already mainstreamed trade into its national development agenda b)The NTIS is in place and GoN highly committed priority- wise and resource-wise to implement it c)But resource-wise Nepal alone is unable to afford to implement it 4.DPs urged to focus on –cross-cutting activities (institutional, policy) –Swathe of activities from any value chain, if 'VC' to pick up

We are Enthusiastic to See Our DPs... Becoming a part of our national trade agenda Joining aggressively the issue of trade by 'mainstreaming trade' into their country level development/cooperation strategies Immediately picking-up activities from NTIS (as per their areas of expertise and interest) for implementation Helping GoN to make NTIS 2010 a great success. – Those who already involved: Urged strong & continued support for implementation – Those who not yet: Urged to include trade in their Nepal Assistance Strategy and support NTIS implementation

'Baby steps' & 'How a baby grows?'

Who Says Nepal can’t set an example? Thanks for Your Kind Attention!