Ministry of Commerce And Supplies - Enhanced Integrated ...

Chapter 7Technical StandardsN T I S20107.1 IntroductionQuality measured through standards, technical regulations, and conformity assessment has become aprerequisite of international trade. While technical regulations and standards might be burdensome to theentrepreneurs of LDCs such as Nepal in terms of cost and capacity, they are unavoidable. The challenge forNepalese exporters, government officials, and institutions geared at assisting firms in meeting standards isto keep pace with the requirements of importing markets because of the lack of infrastructure to fulfill suchrequirements of international trade, slow legal reforms, or lack of awareness among entrepreneurs.In view of the ever-increasing globalization of trade and investment and the widespread adoption of theWTO and other regional trade agreements (RTAs) such as the European Union (EU), North American FreeTrade Agreement (NAFTA), etc., meeting the requirements of technical regulations, standards and conformityassessment practices has become one of the major tasks for Nepal and many other LDCs. In fact, it is seen asone of the major challenges.Nepal acceded to the WTO in 2004. During the accession negotiations, the GoN committed itself to complyingwith the Technical Barriers to Trade (TBT) Agreement and the Agreement on Sanitary–Phytosanitary Measures(SPS). Compliance with these two agreements is mandatory. 1The TBT-related commitments include: Making necessary amendments to Nepal’s standards regime, including the Nepal Standards (CertificationMark) Act 1980 and the Nepal Standards (Certification Mark) Regulations 1982 (Amendment), to bringthose into full compliance with the WTO Agreement on Technical Barriers to Trade; Implementing fully the provisions of the Agreement on Technical Barriers to Trade, including compliancewith the Code of Good Practice for the Preparation, Adoption and Application of Standard (Annex 3 ofthe TBT Agreement) by December 31, 2006.Under the ‘Code of Good Practice’, the standards body of Nepal needs to notify the WTO of its technicalregulations and legal provisions. In addition, as per the mandatory requirement under the TBT Agreement,the GoN has committed itself to ensuring that technical regulations and conformity assessment proceduresare not prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles tointernational trade.As noted above, Nepal was granted a transitional period from the date of its accession until January 1, 2007for full implementation of the WTO TBT Agreement and to allow it to secure technical assistance in order tofully implement the obligations of the Agreement. The promised deadline passed three years ago and somecommitments still remain outstanding. The delay can be attributed to the prolonged political conflict, thesubsequent peace process, and frequent changes in the government of Nepal.7.2 Status of Legal ReformBefore the former Ministry of Industry, Commerce and Supplies (MoICS) was divided into two Ministries , itfinalized a draft Amendment to the Nepal Standards (Certification Mark) Act and a new draft bill on ‘NationalAccreditation Board’. Both the draft Amendment and the draft bill were forwarded to the Ministry of Lawand Justice for formal processing before taking them to the Constituent Assembly for promulgation as Acts.The revision of the Nepal Standards (Certification Mark) Act is particularly important as it would separatethe activities of the new ‘Accreditation Board’ from those of the current one to make the new Board fullyindependent, as required by the international practice. The drafting was done by the MoICS and Nepal Bureauof Standards & Metrology (NBSM), internally with inputs from international experts. The structural provisionsin the proposed revised Nepal Standards (Certification Mark) Act and new Accreditation Board Act are asoutlined in Figure 1.1WTO, 2003: Report of the Working Party on the Accession of the Kingdom of Nepal to the WTO, WT/ACC/NPL/16, 28 August 2003.NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT169