EU Statement at the Trade Policy Review of the Federal Democratic Republic of Nepal, 17 Novembre 2025
On behalf of the European Union, I would like to welcome Nepal's Delegation, led by H.E. Dr Ram Prasad GHIMIRE, Secretary, Ministry of Industry, Commerce and Supplies, as well as my colleague H.E. Mr. Ram Prasad SUBEDI and his team in Geneva. I would like to thank the Discussant H.E. Mr NAGAI Katsuro (Japan) for his introductory remarks.
Mr Chairman, the EU is pleased to acknowledge several positive developments in Nepal during the review period. Since its last Trade Policy Review in 2018, Nepal has embarked on a series of noteworthy reforms, a few of which I'd like to highlight. Notably, Nepal has made significant strides in enhancing its customs procedures by implementing a series of Customs Reform and Modernization Strategies and Action Plans, alongside the successful launch of the Nepal National Single Window in January 2021. Additionally, the Customs Department has rolled out the Customs Reform and Modernization Plan for 2021–2026, accompanied by integrity-focused capacity-building initiatives in collaboration with the World Customs Organization (WCO) in 2022.
In addition, Nepal has recently updated its export strategy with the introduction of the National Trade Integration Strategy (NTIS) 2023. This strategy outlines priority sectors and actions aimed at enhancing external-sector stability and competitiveness. Continued implementation of the NTIS is critical for diversifying Nepal's exports beyond traditional areas like textiles, garments, and primary agriculture, into high-value sectors such as information technology, business process outsourcing, and hydropower. To transform these priorities into tangible export growth, it is essential to resolve the implementation challenges and ensure dedicated resource mobilization.
The EU commends Nepal's steadfast commitment and support to the rules-based multilateral trading system. We are pleased to acknowledge Nepal's ratification of the WTO Agreement on Fisheries Subsidies in August 2025 which contributed to the entry into force of the Agreement. The EU invites Nepal to join the Multi-Party Arbitration Arrangement that guarantees its participants’ access to a functioning dispute settlement system in the WTO.
We would strongly encourage Nepal to consider aligning with the other 128 WTO Members involved in the Investment Facilitation for Development Agreement (IFDA). The Agreement offers important development benefits by promoting a transparent and predictable regulatory framework aimed at attracting sustainable investment. As we approach MC14, Nepal's valuable support for this Agreement—or at the very least, its assurance that it will not hinder the agreement’s integration into the WTO rulebook — is increasingly important.
We also commend Nepal’s robust efforts to graduate from Least Developed Country (LDC) status in 2026. As Nepal prepares for this historic transition, the EU is happy to have collaborated closely with Nepal on this journey. The EU remains an important trading partner for Nepal. In 2024, EU–Nepal goods trade amounted to €376 million. As an LDC, Nepal currently benefits from duty-free, quota-free access under the EU’s Everything But Arms (EBA) scheme. After graduation, Nepal can seek GSP+ treatment subject to a request as laid down in the rules of the EU GSP Regulation. These require, among other conditions to be met, the ratification and effective implementation of the international conventions listed in the GSP Regulation. We stand ready to support Nepal’s LDC-graduation efforts and the technical work needed for any future GSP+ application.
Nepal and the EU, together with its Member States, are also important partners on development cooperation. The EU has allocated €209 million development cooperation funds for the period 2021–2024 and a further €113 million for 2025–2027 in line with Nepal’s national development plans. Cooperation focuses on support to sustainable rural development (including nutrition), education and strengthening of democracy and decentralisation.
The EU would also like to raise a few challenges, some related to the questions we submitted for this TPR.
First, Nepal faces persistent implementation and coordination challenges that could hinder the achievement of its policy goals, including a smooth and resilient graduation from LDC status. The EU supports Nepal’s efforts to strengthen institutional capacity, ensure effective inter-ministerial coordination, and improve monitoring mechanisms across key frameworks such as the Smooth Transition Strategy, the Digital Nepal Framework, and trade facilitation reforms.
Second, Nepal’s export base remains narrow, with limited diversification and value addition. While the National Trade Integration Strategy (NTIS 2023) identifies promising sectors such as Information Technology/Business Process Outsourcing and hydropower, the EU encourages Nepal to further intensify its efforts to accelerate implementation, mobilize resources, and enhance exporter capacity to help integrate into higher-value global chains.
Third, regulatory and institutional weaknesses continue to constrain investment and modernization. The EU notes the need for continued reform to streamline foreign investment procedures, strengthen the intellectual property framework, and improve transparency in areas such as fossil fuel subsidies. Such measures will be essential to attract sustainable investment and foster innovation-driven growth.
In conclusion, I would like to commend Nepal for its comprehensive reform efforts. On behalf of the EU, I look forward to a constructive exchange of views during this Trade Policy Review and wish Nepal's delegation the utmost success.