According to the report, India in 2010 consumed US$ 8 billion worth of iron and steel, but despite much-touted zero tariff facility, Nepal could fulfill mere 1.22 percent of that total consumption. [break]
Nepal had potential to raise the export, but still failed to do that because of non-cooperation, suggests the report on cost of economic non-cooperation in South Asia.
Poverty reduction and consumer welfare, that would have emanated from all feasible export gains also suffered. "All the countries have suffered from it," reads the report of Consumer Unity and Trust Society (CUTS) international and South Asia Watch on Trade, Economics and Environment (SAWTEE).
Saying that South Asia is one of the least integrated regions in the world, the report disseminated on Monday argues that the countries in the region are losing their export potentialities due to weak economic regional interaction.
Just as missed export opportunities, Nepali consumers could have gained 83 percent in the mineral fuels, oils, distillation products, 13 percent in salt, sulphur, earth, stone, plaster, lime and cement and 4 percent gain in others if there were sound economic cooperation in the region.
The report argues that the South Asia Free Trade Agreement (SAFTA) -2006 was ineffective in order to enhance consumer welfare. “It is widely recognized that SAFTA members maintain large sensitive lists with high intra-regional trade potential,” the report reads.
The share of intra-regional trade in total trade in the region has only marginally improved from 2.5 to 4.8 percent during 1995 to 2010. “The cost of this non-cooperation is solely impacting the consumers´ welfare,” the report reads.
In addition to that, the cost of economic non-cooperation in South Asia has been reflected in consumer welfare, causing them to lose US$ 2billion in 2010 and Nepali consumers particularly bear the loss of US$ 457.5 million (more than Rs 34 billion) that year.
Presenting highlights of the report, Chandan Sapkota, research officer at SAWTEE said that the report had no consideration about impact of displacement of domestic industries, loss of customs revenue and trade facilitation.
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