Advancing Nepal’s Trade Agenda T hrough Effective Implementation of NTIS 2010

1. Advancing Nepal’s Trade Agenda Through Effective Implementation of NTIS 2010 Chandra Ghimire Joint Secretary, Ministry of Commerce & Supplies chandrakg64@yahoo.com Presented to A GoN-Development Partners Consultation Meeting Kathmandu, Nepal, 07 February 2011

2. 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

3. 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

4. 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.)

5. 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

6. What is NTIS 2010? • 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

7. Salient Features of 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;

8. 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.

9. Problems of Nepal’s Trade Sector(Obstacles for NTIS Implementation) 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;

10. 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)

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

12. 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

13. 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

14. 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)

15. 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

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

17. 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

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

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