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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
N T I S2010Figure 7.1Future Organogram for Accreditation and Standards and MetrologyMinistry ofIndustryNationalCouncil ofStandardsNationalAccreditationBoard of NepalNepal Bureauof Standards &MetrologyNepalAccreditationBoard forSystem andProductCertificationNepalAccreditationBoard forConsultancy,Personnel &Training FirmsNepalAccreditationBoard forTesting &CalibrationLabsHowever, the process of promulgating the Act Amendment and the new Act remains incomplete. The draftrevision of the Nepal Standards (Certification Mark) Act has been approved in principle by the ‘Bill Committee’for forwarding to the Constituent Assembly. However, the new bill for the ‘National Accreditation Board’has yet to be approved by the Committee. In addition, there is a need for wider consultation to examine thecompatibility with the requirements of the WTO/TBT and the draft bills should be notified to the WTO formember countries to comment before enactment.NBSM officials consider that it will take more time for the bills to be passed. They will start taking necessarysteps to revise or formulate regulations only after promulgation of new Acts. Thus, more delay is expected,even though the deadline for full implementation of the TBT regulation was January 1, 2007.In addition, the NBSM, as the national standards body, has yet to notify its official acceptance of the WTO/TBTCode of Good Practice for the Preparation, Adoption and Application of Standards and provide periodically itswork programme to the ISO/IEC Information Center. 27.3 National Organizations Directly Concernedwith the TBT and SPS AgreementsThe NBSM, 3 currently under the Ministry of Industry (MoI), is the national standards body in Nepal. It is alsothe national WTO/TBT enquiry point and has a facilitation role in TBT notifications by Nepal’s notificationauthority. The current functions of the NBSM are guided by two Acts, namely the Nepal Standards Act 2037BS (1980) and the Standard Weights and Measures Act 2025 BS (1968). Under those Acts, the NBSM has keyfunctions such as introduction of Nepal standards on products and processes, Nepal standards certification2WTO, 2000: WT/ACC/NPL/5 Working Party on the Accession of Nepal, Accession of the Kingdom of Nepal, Checklist of Illustrative TechnicalBarriers to Trade (TBT) Issues for Consideration in Accessions12 April 20003NBSM, 2010: home page http://www.nbsm.gov.np and personnel interviews and information collection170NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT
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Nepal Trade Integration Strategy 20
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Table of ContentsForewordAbbreviati
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Table 2.17 Acreage and Production o
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List of BoxesBox 2.1 A Nepalese IT
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LoD Limit of DetectionM&E Monitorin
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Chapter 1Trading Environment, Expor
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N T I S20101.3 Capacity Development
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N T I S2010Table 1.1Balance of Paym
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N T I S2010Changes in the Nepalese
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N T I S20101.5 Expanding an ‘Incl
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N T I S2010 Index 4 measures the po
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N T I S2010Table 1.9Impact of 19 Ex
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N T I S2010Table 1.10Geographical D
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N T I S20101.7 Declining Importance
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N T I S2010negotiate for the inclus
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N T I S2010Types of Exported Produc
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N T I S2010Table 2.2Large Cardamom:
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N T I S2010Index 4: Socio-economic
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N T I S2010Index 1: Export Performa
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N T I S2010exporters. Nepal permits
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N T I S2010RankCountryExports Nepal
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N T I S2010like China and Australia
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N T I S2010The opportunities for pr
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N T I S2010Lentils are subject to o
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N T I S2010Production Capacity: Nat
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N T I S2010Gender Impact: This sect
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N T I S2010Export Prospect: Accordi
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N T I S2010Cost and Quality of Infr
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N T I S2010Attractive markets for T
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N T I S2010Market Access Conditions
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N T I S2010Gender Impact: The respo
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N T I S2010Information from industr
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N T I S2010RankCountryTable 2.26Att
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N T I S2010# Botanical Name 41 Spec
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N T I S2010Current Export Destinati
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N T I S2010significant attention fr
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N T I S20109) Silver JewelryBackgro
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N T I S2010Availability and Quality
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N T I S2010Attractive Markets for S
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N T I S2010Production Capacity: Nep
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N T I S2010ii.iii.required for the
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N T I S201012345678910# Name of Ste
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N T I S2010Export Prospect: Accordi
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N T I S2010Gender Impact: Female wo
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N T I S2010The value added of those
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N T I S2010sheep population, which
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N T I S201013) TourismBackgroundTou
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N T I S2010Index 2: World Market Co
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N T I S2010There are also about 24
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N T I S2010Index 1: Export Performa
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N T I S2010Index 2: World Market Co
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N T I S2010Contribution to Skill De
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N T I S2010Types of Exported Servic
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N T I S201016) Health ServicesBackg
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N T I S2010medical services are bei
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N T I S201017) Education ServicesBa
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N T I S2010should be interpreted ca
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N T I S2010foreign students. The me
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N T I S2010Under mode 4 (presence o
Page 130 and 131: N T I S2010Index 4: Socio-economic
Page 132 and 133: N T I S2010generate revenue of US$3
Page 134 and 135: N T I S2010monopsony power. Several
Page 136 and 137: N T I S2010The possibility of direc
Page 138 and 139: N T I S2010Dairy Products, specific
Page 140 and 141: Chapter 3Access to the Indian Marke
Page 142 and 143: N T I S2010The Nepal-India Trade Tr
Page 144 and 145: N T I S2010Most issues reported abo
Page 146 and 147: N T I S2010Nepalese Domestic Issues
Page 148 and 149: N T I S2010India’s view is that t
Page 150 and 151: Chapter 4Access to the Chinese Mark
Page 152 and 153: N T I S2010products must be wholly
Page 154 and 155: N T I S2010The findings discussed h
Page 156 and 157: N T I S20104.5 Other Impediments to
Page 158: N T I S20104.7 Recommendations: Cha
Page 161 and 162: N T I S2010inflow between 2000 and
Page 163 and 164: N T I S2010Industrial Parks and SEZ
Page 165 and 166: N T I S2010Lack of up-to-date polic
Page 167 and 168: N T I S2010Apart from the critical
Page 169 and 170: N T I S2010capabilities in all five
Page 171 and 172: N T I S20105.5. Combining Investmen
Page 174 and 175: Chapter 6Trade FacilitationN T I S2
Page 176 and 177: N T I S2010In the 2005 Trade Facili
Page 178 and 179: N T I S2010The latest phase of impl
Page 180: N T I S2010improve efficiency. Few
Page 185 and 186: N T I S2010EU countries, special pr
Page 187 and 188: N T I S2010Act 1980. So far, 130 fi
Page 189 and 190: N T I S2010The current projects inc
Page 191 and 192: N T I S2010The NBSM as a secretaria
Page 193 and 194: N T I S2010Many more organizations
Page 195 and 196: N T I S2010Table 7.8Existing Nepal
Page 197 and 198: Table 7.9Standards Issues for Ten E
Page 199 and 200: N T I S20107.14 Priority Actions an
Page 201 and 202: N T I S2010It is not clear what amo
Page 203 and 204: N T I S2010GeneralNepal’s general
Page 205 and 206: N T I S2010a crucial part of the PR
Page 207 and 208: N T I S2010residue limits (MRLs) ar
Page 209 and 210: N T I S2010The viral diseases chirk
Page 211 and 212: N T I S2010SPS issues Affecting Tra
Page 213 and 214: N T I S2010Indian phytosanitary sta
Page 215 and 216: N T I S20108.5 Conclusions and Reco
Page 217 and 218: N T I S2010Simpler requirements suc
Page 219 and 220: Table 8.4Summary of Export Environm
Page 221 and 222: N T I S2010To register a patent, a
Page 223 and 224: N T I S2010breaches of law. The Nep
Page 225 and 226: N T I S2010Intellectual Property is
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Page 230 and 231: N T I S2010Constraints in the touri
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N T I S2010Table 10.2Nepal GATS Com
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N T I S2010locations favourable for
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N T I S2010Barriers to Exports of H
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N T I S2010Institutional IssueThe s
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N T I S2010 Strengthening sub-natio
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N T I S2010Observations from enterp
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N T I S2010Nepal Ginger Producers a
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N T I S2010 Helping paper manufactu
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N T I S2010Computer Association of
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N T I S20105. Also related to the a
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N T I S2010The key principles inclu
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N T I S2010That being said, Nepal h
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N T I S2010Nepal Business ForumOn M
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N T I S2010Third, capacity developm
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N T I S2010expected to emerge from
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N T I S201012.7 Possible Options fo
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N T I S201012.8 RecommendationsThe
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N T I S2010GoN / MoF (2009), Econom
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N T I S2010Thapa, Ajit N.S. (2006).
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N T I S2010NEPAL TRADE INTEGRATION
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N T I S2010MainOutcomes Recommended
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N T I S2010NEPAL TRADE INTEGRATION
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N T I S20102. GINGERStrengths Tradi
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N T I S20104. LENTILSStrengths High
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N T I S20105. TEAStrengths Very fav
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N T I S20106. INSTANT NOODLESStreng
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N T I S2010 Review, simplify, and i
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N T I S20109. SILVER JEWELRYStrengt
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N T I S201011. CHYANGRA PASHMINA PR
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N T I S201013. TOURISMStrengthsNatu
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N T I S201015. IT AND BPO SERVICESS
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N T I S201017. EDUCATION SERVICESSt
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N T I S201019. HYDRO-ELECTRICITYStr
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Appendix 1Methodology for Export Po
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N T I S2010B. Data SourcesThe analy
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Appendix 2Market Attractiveness Ind
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N T I S2010Rank13) Tourism1 Germany
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Appendix 3Updated Legislative Actio
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N T I S2010specified management sys
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N T I S2010than pesticide residues
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Appendix 5Malaysia GAP (Skim Amalam
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N T I S2010E. Document ControlQMS d
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Appendix 7Good Agricultural Practic
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