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This study analyses Nepal’s policy objectives and assesses whether World Trade Organisation (WTO) membership has contributed in achieving these objectives. Nepal was the first least-developed country (LDC) to become a member of the WTO. However, developments since Nepal’s WTO membership have not been very encouraging. The major economic reasons for this are:

• a considerable number of market access barriers still exist in the international market
• several supply-side constraints hinders export promotion

Nepal was keen to join the WTO due to the following potential benefits:

• discipline on trading partners
• wider market access
• achieving special and differential treatment
• discipline on policy maker
• transit rights

However, Nepal faces some constraints in terms of integrating the country into the global economy. The first set of them are market access barriers. While Nepal continues to face tariff barriers on products of its export interest, it suffers from the regulatory barriers. For instance, Nepalese agricultural exports have often been subjected to technical barriers to trade in India. On the other hand, Nepal’s export potential in services trade is adversely affected by the weak infrastructure, poor quality and policy-related disincentives. Similarly, Nepal generally has a low level of human capital due to limited educational attainment. The nature of Nepal’s terrain and its land-locked situation form additional disadvantages for Nepal.

Aiming at improving its economic situation, Nepal submitted a written request showing its interest to join the WTO in 1995, and became a WTO member in 2004. Nepal received technical assistance during the accession process, including preparation of technical papers and capacity building of the government and the private sector. The study presents some observations from Nepal's accession process:

• some members showed readiness to grant flexibility in terms of transitional periods as long as Nepal had a rational justification
• some developed countries were more eager to grant easy accession to LDCs
• the bilateral negotiations were daunting as members made difficult proposals
  

Nepal’s experience shows that the following matters, in particular, need to be addressed for making the WTO accession process development friendly for acceding LDCs:

• simplifying the WTO accession process for LDCs
• lower the level of commitments for LDCs
• providing technical assistance for enhancing their negotiation capacity and implementing their commitments
• addressing LDC-specific concerns
• strengthening the "special and differential treatment" provisions of the WTO
• ensuring stakeholders' participation in the process, which is crucial if the country is to benefit from WTO membership

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