Trade and Private Sector Development
EU - Project: Support for Trade & Economic Capacity Building

Trade and Private Sector Development

Ministry of Industry, Commerce and Supplies
Singhadurbar, Kathmandu

The EU-TPSD Project

Objective of the Project

The overall objective of the trade and private sector development project EuropeAid/134961/C/SER/NP-1 is to contribute to the efforts of the Government of Nepal to reduce poverty and to stimulate trade-led economic growth by strengthening trade competitiveness. This will be achieved by

  1. enhancing the capacity of the Ministry of Commerce and Supplies (MoCS) and related agencies for the formulation, implementation and coordination of trade policy, trade negotiations and trade promotion,
  2. strengthening the system of quality infrastructure to cope with issues of standards and technical regulations, and
  3. by providing support to the development of the coffee value chain.

The three components of the project will be jointly implemented by a consortium of three experienced development partners with a proven record in trade and private sector related assistance projects: GFA Consulting Group GmbH (GFA) with first-hand experience in implementing projects in Nepal, including the on-going EU project on reconstruction and peace building, HELVETAS, which has already been active in all 75 districts across Nepal, and the Austrian Standards Institute (ASI) with an extensive experience in quality infrastructure-related capacity building projects. GFA is leading the consortium and is in charge of managing the project.

Background and economic context of the project

In 2004 Nepal acceded to the multilateral trading system of the World Trade Organization (WTO) to benefit from facilitated market access and the reliability of the enlarged economic environment. However, Nepal´s export growth remained below satisfactory level and major exportable items have witnessed a sharp decline, thereby steadily raising the trade deficit. The Nepal Trade Integration Strategy (NTIS) was developed to create a basis for addressing supply-side constraints and to seize the opportunities of trade liberalization and a stronger integration of Nepal´s economy at regional and multilateral level. The strategy outlined options for the development of the export sector, together with possible capacity development actions and selected short-to-medium term priorities.

Historically, Nepal suffers from quality problems of its products and services due to its weak quality infrastructure and standards. Nepal Bureau of Standards and Metrology (NBSM) and the Department of Food Technology and Quality Control (DFTQC) are the two key government institutions to ensure the quality, standards and food safety for the country. However, as of today, most of their laboratories are not accredited, so their testing and certifications are not recognized internationally.

Most importantly, Nepal has only a very small export basket. Although the Nepal Trade Integration Strategy (NTIS) has identified 19 potential products and services for exports, Nepal still lacks the institutional support to promote those products and services for their export potentials. For example, coffee have shown a strong performance in recent years. Both tea and coffee are grown in the remote areas of the country and have created good jobs and income for the poor, particularly for women in the region. However, the Nepal Tea and Coffee Development Board, which is the sectoral promotion agency for the sector, is very weak. Other coffee business associations and enterprises also need support and assistance in order to create more value addition for Nepal and increase their world market share.

The results and indicative activities which will be implemented under each of the three components of the project are as follows:

Component 1: Trade Policy Development and Capacity Building

Component 2: Quality Infrastructure Development (Technical Barriers to Trade/ Sanitary and Phytosanitary Measures)

Component 3: Value Chain Development

Project management and implementation

The project management will be located in Kathmandu and most of the activities will be implemented in Kathmandu with some activities in the districts of the country in order to support the regional offices of the government agencies, the private sector and producers. Some activities such as the participation in workshops and seminars and specialized trainings or seminars could be conducted in the district development offices. Study tours and training would be based regionally or internationally.

The target groups (direct beneficiaries) will be the participating government agencies and private sector organizations and their relevant staff, whose capacities to perform their duties will be strengthened. In particular, MoCS (TEPC) and MoI (NBSM) and the MoAD (DFTQC and NTCDB), and NTB. Other trade related ministries and agencies including members of private sector institutions, civil society and academia would be directly and indirectly targeted as well. The intermediate beneficiaries will be operators of international trading activities, who will be able to better trade with other countries, in the region as well as internationally, including the EU Member States. European companies importing goods from Nepal will also benefit from greater reliability and compliance of goods with international standards. The ultimate beneficiary will be the economy in general as the project is expected to stimulate trade and economic growth and, ultimately, alleviate poverty in Nepal.

The project started in September 2014 and will end in January 2018.


For more information: EU-Project: Trade and Private Sector Development (TPSD)


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