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You are owners of newly founded company trying to export Nepalese honey to developed countries, in particular to the EU countries.

Explore the opportunities challenges involved since Nepal is also a member of the WTO Introduction to Honey
Honey is one of the oldest sweets known to man. There are considerable references in history about honey and its goodness. Honey has great value as a food, as a medicine, as a cash crop for both domestic and export markets and as an important part of some cultural traditions.

Honey in Nepal
Nepal has a long and venerable tradition of beekeeping and honey hunting dating back thousands of years. Beekeeping with a native hive bee Apis cerana is an old tradition handed down from generations and it is still in a preliminary stage.

Honey Market
Most of the honey produced in Nepal is marketed in domestic market and only very small quantity is exported. The honey is mostly sold in the domestic market for household consumption and in hotels, restaurants and Ayurbedic Medicines shops. In domestic market, honey is sold in different size packing and under various brand names. Domestic Market Currently very small percent of population consume honey regularly in Nepal. If more and more people are made aware about the benefit and use of honey through promotional and publicity campaigns, there will be a significant increase in the per capita consumption of honey in Nepal. However, domestic market demand for honey is increasing year after year. Size and Market price of Honey Honey is found in different size in the market. The size ranges from 50gm. to 1000gm. The available size is 50gm, 100gm, 200gm, 250gm, 400gm, 500gm, 700gm, and 1000gm. Some of the outlet also sells 2000gm container size honey. Honey is packed either in glass bottle or food grade plastic container. Comparatively, smaller size honey is expensive than the bigger ones. The price of different size honey in the domestic market varies as follows:
Quantity 1 kg 700 gms 500 gms 400 gms 250 gms 200 gms 100 gms 50 gms Price Rs. 230 to Rs.325 Rs. 185 to Rs. 200 Rs. 125 to Rs. 165 Rs. 115 to Rs. 135 Rs. 90 to Rs. 96 Rs. 65 to Rs. 85 Rs. 38 to Rs. 43 Rs. 22 to Rs. 24

Export Nepal is exporting honey to different overseas countries for last many years, but the volume and the value of export is very small. Until 2001/2002, Norway used to be the largest buyer of Nepalese honey. But due to the problem related to the pesticides residue, Nepalese honey is banned to enter into any European country including Norway. Export of Nepalese honey to overseas countries from 2000 to 2007:
Fiscal Year 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 Amount in Rs 1,606,086.00 9,736,911.00 441,985.00 520,783.00 3,666,089.00 7,730.00 23,000.00
Source: TEPC

Major importing countries of Nepalese honey: At present the major countries that import honey from Nepal are Norway, Japan, Germany, USA and South Korea. However, for the last few years, countries like UAE, Thailand and Bangladesh are also emerging as good outlets.

Introduction to WTO
The World Trade Organization (WTO) is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. The organization deals with regulation of trade between participating countries. It provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements which are signed by representatives of member governments and ratified by their parliaments. Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (19861994).

Nepal in WTO
Nepal applied for the membership of WTO in 1995, submitted "Memorandum of Foreign Trade Regime" in 1998 and became member on April 23, 2004. Having being member of the WTO, Nepal is subject to or under the pledge of different agreements of WTO negotiated during the Uruguay Round including Sanitary and Phyto-sanitary (SPS), and Technical Barriers to Trade (TBT) Agreements as an integral part. SPS and TBT agreements are some of most conspicuous agreements having cynosure and pivotal implications on apiculture. Having being a member of WTO, Nepal is also required to amend various policies, acts, rules and regulations to conform to the WTO organization and put them into practice effectively in addition to the regional norms such as Council Directive 96/23/EC of 29 April 1996. If Nepal wishes to trade honeybees or bee related products with WTO member states, it entails that Nepal abide by WTO agreements especially SPS and TBT. Bees and bee-products had been being imported and exported in some quantities until the trade partner required conforming to the regional norms such as Council Directive 96/23/EC of 29 April 1996.

The core requirement for importing honey into the EU is for the country in question to have a residuemonitoring plan, approved by the EU. This plan is intended to assess the ability of the official services of the exporting country to ensure the safety of the honey with regard to residues of chemical substances in it. Due to concerns about food safety, residue-monitoring plans are required from third countries for imports into the EU of all animals and products of animal origin.

Opportunities and Challenges of exporting Honey Potential Opportunities under the WTO
Hosts of opportunities exist for the Nepalese apicultural sector under the WTO regime. However, to translate the opportunities into actual gain, there is a dire need for technical knowledge and assistance, reduction in costs of production, improvement in transportation linkages and export promotion programs. Market linkages and the use of information technology are some of the key issues. Promoting products of comparative advantages, which reflect Nepals features or catch consumers sentiments in the international fronts, are other issues. Detailed profiles of the products that posses the comparative and competitive advantages are necessary. Nonetheless, Nepal can benefit from WTO membership grasping the following potential opportunities: Market access Market access is one of the most vital opportunities that WTO offers. Honey trade of India, world trade of honey 2003 and honey trade of Nepal show that there is a tremendous potential for honey to export to these countries. However, translating such potential into actual gain as well as tapping opportunities arising from the WTO requires production in scale with high quality, competitive prices, and timely delivery of goods. It needs enhancing marketable high-value bee products through greater value addition with proper attention paid to production processes as well in order to make them acceptable in the global market. Transfer of apicultural technology and foreign investment These opportunities depend upon the state of domestic laws, policies, administrative mechanisms, efficiency of the judiciary, available human resources, market size and export possibilities. Nepal has been working on necessary laws and policies to promote transfer of technologies and foreign investment, which is a positive indication. However, the role of private sectors is very important. The trade openness offers opportunities for domestic entrepreneurs to enter into the partnership with foreign investors in order to bring new technology and management skills into the country. Economic benefit to Nepal from the WTO membership depends on how swiftly and effectively it can mobilize the foreign direct investment. The government should stimulate the trade monitoring authority, modernize the customs administration and simplify customs operations. A continuous feedback mechanism should be developed to take appropriate decisions. Transparency, predictability and governance reform The WTO encourages and demands transparency, predictability and governance reform. What is required is corporate culture as the foundation of the trade. The state mechanism that works in this accordance can utilize this benefit arising from the WTO.

Dispute settlement The most significant attraction of WTO is rule based trading system, resolution of disputes, and enforcement of decisions, which offers Nepal a very credible forum to settle trade disputes with other member countries. However, success in international disputes depends on capable human resource working in team to advocate for Nepal. The existing level of such capacity is quite inadequate for this. Human resource development and employment: Nepal has opened 11 service sectors and 76 sub-sectors with the assumption that it would result in foreign investment, generation of employment, human resource development, and revenue generation. It is an undeniable fact that liberal societies grow faster than closed societies. Liberalization of service sectors is expected to materialize Nepals trade potential. Transit rights One of the potential benefits of the WTO is that it provides transit right to Member countries. In other words, Member countries can exercise transit rights in order to use the most convenient route through the territory of other Members. Each Member of the WTO is required to accord transit rights to products, which have been in transit through the territory of any other Member country treatment no less favorable than that, which would have been accorded to such products, had they been transported from their place of origin to their destination without going through the territory of such contracting party. As a Member of the WTO Nepal has this right and this is not merely a favor from its neighbors. International presence: Nepal can demonstrate its economic and trade potential at the international forum the WTO offers. This is important for promoting foreign investment, transfer of technology, environment for joint venture, and the development of both merchandise and service sectors. Moreover, Nepal can optimize its trade opportunities based on multilateral rules rather than on bilateral understanding in various forms. It also offers Nepal the opportunity to have an alliance with other likeinterested countries, especially least developed countries, to protect national interests through multilateral rules and mechanisms. However, this will become a pity if Nepal fails to develop its knowledge base and negotiation skills adequately.

Main Areas of Trade Opportunities


New trade opportunities are likely to come from three main areas: New markets Previously closed markets will be opened up as trade policies are brought into line with SPS principles. Lower compliance costs The cost of meeting unnecessarily rigid sanitary requirements can marginalize an otherwise viable export operation. As unjustified requirements are removed, these costs will be reduced. Certainty Exporters will be able to plan ahead with more confidence, as WTO members countries are no longer allowed to impose arbitrary restrictions on another countrys export industry.

Challenges under the WTO


The WTO demands laws, policies, and administrative mechanisms that are compatible with it. On the one hand the challenge is real, but on the other hand, Nepal is plagued with irregularities, lawlessness, sluggish growth, extreme poverty, and rampant corruption. This creates enormous adjustment problems. An appropriate response requires rule of law, efficient and rational bureaucracy, and huge financial resources. In addition, professional expertise is needed in many areas. Sincere implementation of commitments is also a challenge. In the Accession Protocol, Nepal has managed, however, to obtain commitments from its development partners on technical assistance. Technological upgrading system in the apicultural sector is very limited, which has resulted in high costs of production and limited value addition. Likewise, Nepal significantly lags behind in physical and technical infrastructure that is necessary to ensure quality of the apicultural products at the international level. As a result, the Nepalese apicultural products are facing hardship in making sustainable presence in the international market. Broadly speaking, to sustain in the WTO regime, Nepal faces two major challenges viz. it must develop the range of exports, both goods and services, and enhance capacity to be able use system tools to realize potential opportunities available in WTO to protect local industries and apicultural entrepreneurships. WTO membership has ensured equal rights to Nepal in the international trading system. However, it entails that building supply side be focused and a smooth trading mechanism be put in place, activating the trade monitoring authority, modernizing customs administration and simplifying customs operations. WTO membership has also opened up opportunities of markets of at least 149 countries for Nepalese exports both goods and services. Nepalese products also face indirect challenge with regard to SPS and TBT. Some of standards imposed have proved difficult to be attained by least developed countries like Nepal. Beekeepers There are some tough challenges for beekeepers ahead to get organized to maximize their business profitability. For beekeepers, the challenge is to adapt their marketing to an era of potential global markets and global competition. The private sector should concentrate on increasing their managerial competence and procedural productivity to enhance competitiveness. Effect must focus on harmonizing domestic standard with global and regional access. Beekeeping regulators Beekeeping regulators as well as beekeepers need to be prepared for new incursions of pests and diseases. For beekeeping regulators, the challenge now is to accept the far greater movement of people and goods around the world, and support the development of scientifically sound rules to facilitate trade while protecting bee health. There must be strengthened surveillance and monitoring systems in place. It is essential that not only do we have safe products, but that we have the monitoring systems to assure importers of the continued status of our product. Countries must have good evidence of their pest or disease freedom before they can justify import restrictions. Scientists For scientists, the rules for health protection need to be based on their research. They must learn to use risk assessment methodology, and apply it in practical ways. Scientists should also actively contribute to

the work of the OIE, by providing technical expertise and resources so that necessary standard can be developed to allow for further elimination of trade barriers.

Recommendations and Conclusions


Following are some the recommendations that are critical for achieving benefits and dealing with challenges arising from the WTO. To build and strengthen domestic capacity Building and strengthening domestic capacity of different key stakeholders is to be realized as the fore most task of the country. It includes public institutions, the bureaucracy, private sector, civil society, and academic institutions. Nepal should also focus in the development of human resource increasing core competencies and promoting specialization in the most crucial areas for the meeting of giant challenges ahead after its accession to WTO and enforcement of SPS/TBT Agreements. Against the backcloth of the international competition, Nepal encounters the problem of loss of economy of scale and high cost of production due to less advance technology or scientific background, but its competitiveness in the products with low level of technology and high labor inputs should be highlighted. To build effective standard setting agencies The role of standard-setting agencies lies at the core in international trade. Consumers are the ultimate target groups in any business, especially in international trade. Therefore, market access of Nepalese goods in the international market depends on the production and supply of goods that meet to strengthen and establish effective setting agencies. To improve laws and policies As the WTO is a rules-based trading system, it demands rules based trading environment at the national level, too. Accordingly, Member countries are required to create an environment for rules-based trade. Enactment of new laws and improvement of existing laws is very important in the context. However, mere enactment of laws does not serve the purpose. The stakeholders need to be aware about the legal policy mechanism and should be able to use the law as a tool to promote their interest. Nepal is also required to amend various policies, acts, rules and regulations (including quarantine) to conform to the WTO organization and put them into practice effectively, in addition to the regional norms such as Council Directive 96/23/EC. To develop knowledge base and management information system A strong knowledge base is important for proper understanding, use, and implementation of WTO rules. It also helps develop perspective and define position in negotiations with other Member countries. An information bank is necessary to keep track of past activities and future-plans regarding the implementation of Accession Protocol. An apicultural information and communication centre should be established for the database pertaining to apiculture and honey, and sharing information. To develop plan and strategy: It would be very important to develop a comprehensive national plan and strategy to achieve benefits from the WTO as well as deal with the potential threats. To emphasize coordination and partnership:

It is also equally important to have better coordination between and among government, private sector and civil society in policy development as well as in implementation process. To have the residue monitoring and control system Nepal needs to have the residue monitoring and control system for exporting honey to EU (including 18 Norway) or other WTO member states. It entails to maintain, improve and certify the quality of honey with regards to food safety, hygiene, production and processing standards, which will qualify Nepalese honey for export to the European market or elsewhere. To strengthen the monitoring, validation and certification system: To strengthen the monitoring, validation and certification system of honey quality, and to guarantee the food safety, hygiene, production and processing standard, the infrastructures (including laboratory facilities from central to local levels with competent manpower) must be developed with clear-cut mandate and authorities for quality control of the products, their standardization and their marketing system with appropriate facilities and competent human resources. Facilities and testing capacity of the Department of Food Technology Quality Control, and Nepal Bureau of Standards and Metrology need to be enhanced and internationally accredited. Policies are needed to enhance capacity of private sector in providing testing certification services under the monitor and supervision of the government. To protect the farmers' and entrepreneurs welfare and develop agro-based industries To protect the farmers' and entrepreneurs welfare and develop agro-based industries including beekeeping, Nepal can restrict apicultural (or agricultural) imports by raising health and quality concerns under SPS and TBT regimes, but the steps must be supported by scientific justifications. Hence, quarantine must be strengthened, food and pesticide related standard must be updated, and biotechnology or other laboratory facilities must be improved. Nepal should enable itself to reap the benefits of the opportunity As SPS Agreement (Article 9) and TBT Agreement (Article 11) provision for the technical assistance with the highest priority to the least-developed countries, Nepal should enable itself to reap the benefits of the opportunity for the preparation of technical regulations, the establishment of national standardizing bodies, the participation in the international standardizing bodies, accessing towards the international conformity assessment system a and preparing home products accordingly.

References [1] http://www.includenepal.org/newsletter2-34 [2] http://www.bee-hexagon.net/files/file/fileE/Honey/HoneyinNepal.pdf [3] http://www.gandakibee.com.np/markets.htm [4] http://doiednepal.gov.np/ControlPanel/Panel/reports/154.pdf [5] http://en.wikipedia.org/wiki/World_Trade_Organization