WTO | Nepal - Overcoming graduation challenges through national, regional and global efforts

Ambassador Ram Prasad Subedi is Nepal's Permanent Representative at the WTO and the Chairperson of the WTO Committee on Trade and Development.

What is the situation regarding Nepal's graduation process?

Nepal will be graduating from LDC status in 2026. This is because the country is gradually becoming more resilient, and its socio-economic indicators are improving too. At the same time, income per capita remains low. So more efforts are required to ensure sustainable graduation.

What are some of the possible trade impacts of Nepal's graduation?

Nepal has been working closely with the International Trade Centre (ITC) to assess potential impacts on market access. The estimates suggest that Nepal may lose around 4 per cent of its exports after graduation. That's why continued cooperation from the international community is critical to help us diversify our exports and markets.

It is very good news that in October 2023 WTO members adopted a decision encouraging preference-granting members to provide a smooth and sustainable transition period before withdrawing duty-free programmes after graduation.

After graduation, we would also need to ensure greater alignment with WTO rules. Nepal joined the WTO in 2004, having undertaken substantial trade reforms. That was an important step that Nepal made to integrate with WTO rules.

Nepal's development partners have also been supporting us in this area. The LDC graduation decision taken at the 13th WTO Ministerial Conference (MC13) will allow LDC graduates to have a three-year transition period to integrate with WTO rules and to benefit from LDC-specific technical assistance available under the WTO's Technical Assistance and Training Plan.

These two steps that WTO members have taken will help shield Nepal from potentially negative trade impacts resulting from graduation from LDC status.

After graduation, we would also need to ensure greater alignment with WTO rules. Nepal joined the WTO in 2004, having undertaken substantial trade reforms. That was an important step that Nepal made to integrate with WTO rules.

Nepal's development partners have also been supporting us in this area. The LDC graduation decision taken at the 13th WTO Ministerial Conference (MC13) will allow LDC graduates to have a three-year transition period to integrate with WTO rules and to benefit from LDC-specific technical assistance available under the WTO's Technical Assistance and Training Plan.

These two steps that WTO members have taken will help shield Nepal from potentially negative trade impacts resulting from graduation from LDC status.

Can you give a couple of examples of the steps that Nepal has been taking to prepare for graduation?

First, Nepal is working on a smooth transition strategy, which will cover several areas, including macroeconomic and fiscal stability, trade and investment, economic transformation, productive capacity, climate change and disaster risk management, and social inclusion.

Second, Nepal is bolstering its connectivity in the region. It is improving its roads, which take its exports from Kathmandu in Nepal to Kolkata Port in India. It is also working on ensuring full operation of the country's two international airports.

Third, it is expanding its regional and multilateral engagement. At the regional level, Nepal is working with India and Bangladesh under the Power Trade Initiative. This will allow Nepal to provide some 500 megawatts (MW) of hydropower to neighbouring Bangladesh using India's transmission line.

Nepal is also active in the graduation discussions in the WTO. The LDC graduation decisions taken by WTO members will positively contribute to supporting Nepal's smooth and sustainable graduation from the LDC category.