WTO and Nepal:

– WTO stands for World Trade Organization. During 1995 (1 st January), the GATT (General Agreement on Tariffs and Trade) collapsed and emerged the same into WTO by Uruguay Round negotiations (1986-94).

– Nepal was not the member of GATT and it had applied for membership in 1989, Nepal became the 147 th member of WTO from 23 rd April, 2004 (Baishak 11, 2061).

The general agreements related to agriculture as follows:

Basically, there are five agreements related to agriculture. They are:

1. Agreement on agriculture (AoA)

2. Agreement on sanitary and phyto-sanitary (SPS) measure

3. Agreement on technical barriers to trade (TBT)

4. Agreement on trade related aspects of intellectual property right (TRIPS)

5. General agreement on trade in services (GATS)

Agreement on Agriculture:

It has three pillars (aspects):

1. Domestic support: reducing the subsidies in agriculture sector.
2. Market access: increasing access to market.
3. Export subsidies: reducing the export subsidies.

I. Domestic support:

Differentiation between domestic subsidies according to “distortionary effects” and

categorization in boxes:

a) Amber Box: highly trade distorting

– Price support, input subsidies etc.

– Subject to reduction commitments – in industrialized countries by 20%;

developing countries: 13%

b) Blue Box:

– Per ha payments (EU) and deficiency payments (USA)

– It was finally decided to change the blue box measures so that they qualify for the green box (“decoupling”).

c) Green Box: production and trade neutral

– State transfer payments (directly financed from the state budget); payments for

research and extension service; also food aid.

– Not subject to reduction commitments.

II. Market access:

– Transformation of non-tariff trade barriers (NTBs) in tariffs (Tariffication) 

– Reduction of tariffs: Developed countries on average by 36% and developing

countries 24%.

III. Export Subsidies:

– Developed Countries: export of oversupply to the world market with the help of export subsidies: Export subsidies of more than 20% of the production value.

– Reduction of the expenditures for export subsidies by 36% or of the subsidized export volumes by 21%.

2. Agreement on sanitary and phyto-sanitary measures:

– According to this agreement, those imports which has serious effect on the health of plants, animals or human, these products can be banned.

– This agreement is in action from January 1 st 2006.

3. Agreement on the technical barriers to trade (TBT):

– Those products which have low quality, poor labeling, poor packaging, and poor grading then even they don’t harm the health, these can be avoided from import but it should be insured that such low qualities are not produced in the importing countries.

– So the technical barriers to trade might include:

quality, weight, color, packaging, leveling, date of manufacturing, date of expiry, production technologies and methods, and ecological impacts of the produce etc.

4. Trade related aspects of intellectual property rights (TRIPS):

–  Intellectual property rights imply an ownership of ideas including literary, artistic work, invention, sign, or distinguishing goods of as enterprise and other elements of industrial property.

– Intellectual property law has two main objectives:

a) It provides legal rights to creators and innovators as a reward for their achievement, and

b) It provides incentives for creativity and innovation and for economic, social, and cultural progress.

5. General agreement on trade in services (GAT):

– This agreement opens the door for the foreign investment in the different sector.

– While accessing the membership of WTO by Nepal, had agreed on 74 different sectors and sub- sector but there are only two sector related to agriculture. They include:

1. Animal medical services, and
2. Technical experiment and investigation services.