KATHMANDU: A delicate balance between trade policies and environmental policies are necessary for resilient and non-disruptive global supply chain that benefits all equally said the speakers in WCP Nepal 3rd Annual Conference on Climate Change and Trade Suitability in South Asia.
The speakers urged to move forward to green transition by developing clean energy, establishing environmentally friendly technologies, digitalising commercial services, strengthening ICT infrastructure and integrating the production of MSMEs in the e-commerce platform and move ahead in our journey to trade sustainability.
“If the entirety of the economic ecosystem is not sustainable, trade sustainability is not easily achievable goal. However, when it comes to the issue of trade sustainability, we are not only looking at the production, supply chain, conveyance, transportation system and the climate disruption caused by the extreme climate events,” said Professor Achyut Wagle, registrar at Kathmandu University and chair at WTO Chairs Programme Nepal speaking in the inaugural session of two-days event in Kathmandu.
“Nepal has posited or huge hope on export of hydropower but looking at the impacts of climate change, there is reduced flow of water in the rivers. So we are somehow facing a precarious future if we do not take some urgent actions today,” said Wagle.
“It is time we should look for justice in trade and climate as our Himalayas is turning into black rocks and the pain within us should be able to move us rather passionately in the right direction of sustainability, that includes trade sustainability.”
The conference is hosted by WTO Chairs Program – Nepal at Kathmandu University School of Management in collaboration with WCP – India, Centre for Trade and Investment Law (CTIL), Indian Institute of Foreign Trade (IIFT), New Delhi, India and Faculty of Management, Purbanchal University, Biratnagar, Nepal.
Finance Minister Bishnu Prasad Poudel said that Nepal is at high risk of climate change, and its impacts are clearly visible in the economic, social, and infrastructure development sectors yet it’s role in contributing to climate change is negligible. Nevertheless, Nepal wishes to prioritize its efforts, within its available resources and means, towards reducing emissions and adapting to climate change.
“Given that South Asia is a significant contributor to agricultural production and trade, I believe it is essential to develop and enhance strategies for the effective implementation of Climate-Smart Agriculture to address the challenges already faced and those anticipated in the agricultural sector due to climate change,” said Poudel.
It is essential to take proactive steps towards upgrading trade-related infrastructure by incorporating new technologies to make it more resilient and progressive. “We must take more proactive measures in climate-friendly development processes, keeping in mind the disruptions to supply chains caused by damage or losses from recurring natural disasters such as floods, landslides, and earthquakes, which affect the infrastructure we have built with significant investment,” said Poudel.
Ram Prasad Subedi, ambassador of Nepal and permanent mission of UN, Geneva provided thought-provoking remarks on AI and sustainability and citied example on how Nepal faced the recent September floods adding valuable context to why climate change is such an urgent and significant issue.
“Despite the rounds of negotiations, dialogues, deliberations and lofty commitment, the adaptation and mitigation measures continue to fall short to surmount the impacts. Through the financing commitment and nationally determined contribution, countries around the world are striving to limit the impact of climate change,” said Subedi. The measures such as carbon pricing, regulations, subsidies and direct investment have served the purpose to some extent, he said.
Subedi said that there is a lot more to be done.
Citing the WTO Trade Statistical Review 2023, Subedi said that the sale of South Asian region on merchandise export trade is 2.23 percent, whereas import sale is 3.61 percent in 2022. In terms of commercial services, out of the US $7,043.5 billion world export of commercial services, the region’s share is the US $330 billion, while imports is the US $278 billion, he said.
“This means that one fourth of the world population is fulfilling its need with some exception through the imports of goods and services from the global market,” Subedi said.
Subedi added that this is primarily due to the inadequate trade infrastructure, weak productive capacity and poor regional integration and coupled with the impacts of climate change.
“As two of South Asian countries, Nepal and Bangladesh, are scheduled to graduate from LDC category in 2026. The continuation of some flexibility in WTO rules for some more years is necessary in order to make the graduation smooth, sustainable and irreversible,” said Subedi.
Dev Raj Joshi, joint secretary of the Ministry of Industry, Commerce and Supplies said that through green trade policies, sustainable supply chains and regional cooperation, South Asia can transition to a low-carbon economy.
“Nepal, with its vast hydropower potential and growing renewable energy initiatives, is in a unique position to lead this transition. By integrating these efforts into our trade policies, we can enhance our competitiveness and product specialization while contributing to global climate goals,” said Joshi.
“As we are working toward graduation from LDC status, it is even more crucial that we align our trade policies with environmental sustainability to ensure that we are not just economically prosperous but also environmentally responsible,” said Joshi.
Professor James J Nedumpara, head of Centre for Trade and Investment Law and India chair of WTO Chairs Programme highlighted the regional collaboration needed to tackle global trade challenges and the necessity for a transition into green economy as the climate change has an impact on people from all around the world.
“Sustainability has actually become a mainstream of international trade,” said Nedumpara. “A large number of developing countries do not have the means and the technology to provide for a smooth and quick transition into the green economy,” he said.
Nedumpara said that by creating awareness and using the tools of economics and law can support in order to create a well-being structured debate as to how the international trading regime should evolve in the future to meet challenges of climate change consequences.
Xiangchen Zhang, deputy director general of WTO said that the multilateral trading system has helped lift over 1.5 billion people out of absolute poverty and helped create millions of jobs in goods and services trade all over the world.
“I invite stakeholders to consider engaging in a potential environmental goods and services agreement which may be limited in scope but it will help advance the green transition and fight climate change,” said Zhang. “In addition, the capability of AI, precision farming and innovative water science to contribute to food security and sustainable agriculture could bring us towards agreements that ensure a nourished and sustainable future,” he said.