Trade Policy Reforms for the Twenty First Century : The Case of Nepal
This report examines how Nepal could move away from a remittance-driven growth model by reforming its trade policies to increase competitiveness. It looks at the extent to which Nepal has been tapping into its trade potentials, the underlying obsta...
| Main Authors: | , |
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| Format: | Policy Note |
| Language: | English |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/656801513235860109/Trade-policy-reforms-for-the-twenty-first-century-the-case-of-Nepal http://hdl.handle.net/10986/29058 |
| Summary: | This report examines how Nepal could
move away from a remittance-driven growth model by reforming
its trade policies to increase competitiveness. It looks at
the extent to which Nepal has been tapping into its trade
potentials, the underlying obstacles that it faces, and the
type of reforms that could turn trade and investment into a
vehicle for growth. Five key messages emerge. First,
Nepalese exporters remain small and struggle with increase
their shipments once they enter a new market, rather than
with the fixed cost associated with entering. This is due to
severe supply-side constraints that affect their trade and
production costs. Second, Nepalese firms underutilize
existing trade agreements and granted trade preferences.
Third, diversification opportunities lie in fast-growing
economies in East Asia and the Pacific. Efforts regarding
connectivity, trade facilitation and export intelligence
could help firms get to those markets. Fourth, to reduce the
anti-export bias of its trade policy, Nepal needs to
simplify its tariff code, reduce tariffs on intermediates,
and embrace deeper integration, starting with more openness
to services and investment. Fifth, trade reforms in Nepal
are welfare enhancing and, on average, pro-poor. |
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