1、In collaboration withNepal after LDC GraduationNew avenues for exportsStreet address:ITC 54-56,rue de Montbrillant 1202 Geneva,SwitzerlandPostal address:ITC Palais des Nations 1211 Geneva 10,Switzerland Telephone:+41 22 730 0111E-mail:itcregintracen.orgInternet:www.intracen.org/publicationsThe Inter

2、national Trade Centre(ITC)is the joint agency of the World Trade Organization and the United Nations.International Trade CentreNepal after LDC Graduation New avenues for exports Nepal after LDC Graduation:New avenues for exports ii About the paper Nepal could lose 4.3%of exports because of tariff ch

3、anges when it graduates from least developed country status in 2026.The removal of preferential tariffs will especially affect the apparel,synthetic textile fabric and carpet sectors.Losses will mostly occur in exports to China,the European Union,and Turkey.This report suggests strategies such as ta

4、rgeted trade promotion and market diversification to materialize remaining export potential and counterbalance the expected impact of graduation on exports.Publisher:International Trade Centre Title:Nepal after LDC Graduation:New avenues for exports Publication date and place:Geneva,April 2022 Page

5、count:32 Language:English ITC Document Number:TMI-22-6.E Citation:International Trade Centre(2022).Nepal after LDC Graduation:New avenues for exports.ITC,Geneva.For more information,contact:Cecilia Heuser cheuserintracen.org ITC encourages the reprinting and translation of its publications to achiev

6、e wider dissemination.Short extracts of this paper may be freely reproduced,with due acknowledgement of the source.Permission should be requested for more extensive reproduction or translation.A copy of the reprinted or translated material should be sent to ITC.Digital image(s)on the cover:iStockpho

7、to International Trade Centre(ITC)ITC is the joint agency of the World Trade Organization and the United Nations.Nepal after LDC Graduation:New avenues for exports iii Foreword Created over 50 years ago,the least developed country(LDC)status was always meant to be a temporary phase in the national d

8、evelopment.Belonging to the LDC category can boost development,particularly through duty-free,quota-free access granted by multiple markets.Graduating from this category is recognition of the development path travelled.At the same time,they must navigate new paths through trade.Nepal became an LDC i

9、n 1971.After remarkable progress in recent decades,especially with respect to the human assets and economic vulnerability criteria,it was agreed in 2021 that Nepal would graduate from the LDC category by the end of 2026.Todays challenges associated with graduation are compounded by climate change co

10、ncerns and the consequences of the COVID-19 pandemic.Whats more,Nepal faces unique challenges as a landlocked least developed country.It is therefore crucial that Nepal make the most of the five-year preparatory period and put in motion strategies that secure a sustainable transition out of the LDC

11、category.The International Trade Centre and the United Nations Office of the High Representative for the Least Developed Countries,Landlocked Developing Countries and Small Island Developing States stand ready to support Nepals efforts towards a successful graduation process.That is why we joined fo

12、rces to produce this study,which uncovers the effect of graduation-related tariff changes on Nepalese exports and identifies targeted strategies to counterbalance them.We hope this study will be a useful input to ensure Nepals sustainable and inclusive development post-graduation.Heidi Schroderus-Fo

13、x Acting High Representative and Director United Nations Office of the High Representative for the Least Developed Countries,Landlocked Developing Countries and Small Island Developing States Pamela Coke-Hamilton Executive Director International Trade Centre Nepal after LDC Graduation:New avenues fo

14、r exports iv Acknowledgements The International Trade Centre(ITC)prepared this report in collaboration with the United Nations Office of the High Representative for the Least Developed Countries,Landlocked Developing Countries and Small Island Developing States(UN-OHRLLS).Cecilia Heuser is the main

15、author of the report.Julia Spies provided guidance and comments.Yvan Decreux developed and implemented the partial equilibrium model used in this report.The author would like to thank Sylvain Prillat and Maria del Mar Cantero for their valuable research assistance.The team worked under the leadershi

16、p and supervision of Mondher Mimouni(ITC).Marie-Claude Frauenrath and her team managing the ITC EU-Nepal Trade and Investment project supported the preparation of a briefing note that was the basis for the publication and helped reach out to Nepalese government representatives.Margherita Musollino(S

17、enior Programme Management Officer,UN-OHRLLS)acted as the UN-OHRLLS focal point for this activity and supported the work with useful feedback.Natalie Domeisen and Anne Griffin(both ITC)managed the editorial production process.Jennifer Freedman edited the report,Franco Iacovino(ITC)provided graphic s

18、upport and Serge Adeagbo(ITC)for printing support.This report was made possible thanks to the generous support of Norway.Nepal after LDC Graduation:New avenues for exports v Contents Foreword iii Acknowledgements iv Acronyms vii Executive summary viii Post-graduation tariff increases could reduce Ne

19、palese exports by 4%viii Counterbalancing export losses policy options viii Targeted trade promotion viii Market diversification viii Improved market access ix Chapter 1 On the path to graduation 1 How will tariffs change for Nepal?2 Post-graduation tariff regimes 2 Utilization rate of preferences 4

20、 Rules of origin 5 Chapter 2 The effect of tariff changes on trade 6 Chapter 3 Compensation strategies 10 Market access 10 Trade promotion 10 Market diversification 11 Chapter 4 Policy options 15 References 16 Appendices 17 Appendix 1 Methodology 17 Effect of graduation 17 Calculation of untapped tr

21、ade potential 18 Appendix 2 Data 19 Appendix 3 Additional tables 20 Nepal after LDC Graduation:New avenues for exports vi Boxes,Figures,Tables Box 1 Quotas under the IndiaNepal free trade agreement 9 Box 2 Nepal Trade Integration Strategy priority products after graduation 14 Figure 1 Vegetable prod

22、ucts and cereals to face steep tariff increase 3 Figure 2 Nepal regularly uses EU and British LDC preferences 4 Figure 3 Losses to EU,Turkey and China will be highest 6 Figure 4 Exports to largest partners are minimally affected 7 Figure 5 Top projected EU export losses will be in Germany and France

23、 7 Figure 6 Apparel and synthetic textile exports to decline the most 8 Table 1 Next best tariff schemes for Nepal in markets granting LDC preferences 2 Table 2 Adaptation strategies to counter significant export losses($,000)13 Nepal after LDC Graduation:New avenues for exports vii Acronyms Unless

24、otherwise specified,all references to dollars($)are to United States dollars,and all references to tons are to metric tons.EU European Union GDP gross domestic product GSP Generalized Scheme of Preferences ITC International Trade Centre LCD least developed country MFN most favoured nation NTIS Nepal

25、 Trade Integration Strategy SAFTA South Asian Free Trade Area Nepal after LDC Graduation:New avenues for exports viii Executive summary Nepal will graduate from the least developed country(LDC)category in 2026.The period until then will be dedicated to preparing a smooth,sustainable transition out o

26、f LDC-specific support.This entails identifying the consequences of the loss of LDC support measures and devising strategies to offset them.In line with that goal,this study projects export losses for Nepal connected to the removal of LDC preferential tariffs and identifies approaches to mitigate th

27、em.Post-graduation tariff increases could reduce Nepalese exports by 4%With graduation,Nepal will move from the unilateral tariff preferences for LDCs granted by 25 markets to the next best available regime.As a result,the average trade-weighted tariff will rise from 1%to 2%,but the increase will va

28、ry widely between sectors.The vegetable products sector and the cereals and cereal products sector will face the largest increases,with 27 percentage points and 25 percentage points in average applied tariffs,respectively.Our study finds that tariff increases will reduce projected 2026 exports to$1,

29、313 million from$1,372 million a loss of$59 million,equivalent to 4.3%of total projected exports.Among Nepals main export destinations,projected exports to India and the United States are likely to remain largely unaffected,while projected exports to other top trade partners will suffer losses betwe

30、en 17%and 33%.Losses will likely concentrate in exports to the European Union(EU)(-$18 million),Turkey(-$14 million),China(-$11 million),the United Kingdom(-$7 million)and Canada(-$3 million).The projected losses will be concentrated in apparel(-$21 million),synthetic textile fabrics(-$14 million),c

31、arpets(-$6 million),metal products(-$3 million)and miscellaneous manufactured products(-$2 million).While the loss represents a relatively small share of exports forecast for 2026,for some sectors the loss is sizable,notably for processed cereals(69%)and home textiles(25%).Counterbalancing export lo

32、sses policy options Targeted responses can counterbalance trade losses.They include using trade promotion to tackle hurdles that prevent the realization of export potential,facilitating market diversification and pursuing better market access conditions.This study contrasts the post-graduation untap

33、ped export potential estimated for 2026 with the projected export losses at the sector and market levels to identify which mitigation strategies best suit each case.Targeted trade promotion In some cases,the untapped export potential in a given market and sector after graduation exceeds the expected

34、 graduation-related export losses.After graduation,unlocking the full export potential of apparel to Japan,beauty products and perfumes to China,and carpets to Canada could offset the losses expected for those markets and sectors.Targeted trade promotion that enables companies to overcome current fr

35、ictions such as non-tariff measures,rules of origin or specific consumer preferences in the target market can help realize the export potential of these sectors and markets.Market diversification Several sector-market combinations will face a drop in exports without having enough space to counter th

36、is decline through trade promotion.However,alternative markets are available with sufficient untapped export potential,turning market diversification into a promising strategy to balance out graduation-induced trade losses.Nepal after LDC Graduation:New avenues for exports ix A salient example of th

37、is is the case of exports of synthetic textile fabrics to Turkey,expected to fall by$14 million,while the sector will have an untapped potential of$8 million in Bangladesh and$8 million in India.Actions targeted to overcome frictions that may hinder these exports to Bangladesh and India should be ex

38、plored.Improved market access Improving market access conditions through new agreements or adherence to more preferential schemes may be the preferred option even if there is substantial untapped export potential.Obtaining GSP+status to access the EU could reduce losses in export revenue by up to$17

39、 million.However,the challenges to qualify for GSP+and to use its preferences once qualified are substantial.Nepal after LDC Graduation:New avenues for exports 1 Chapter 1 On the path to graduation Nepal was recommended for graduation from the least developed country(LDC)category during the triennia

40、l review held by the United Nations Committee for Development Policy in February 2021.1 In light of the COVID-19 pandemic,it was decided that the usual three-year preparatory period would be extended to five years.This means that Nepal will continue to receive LDC-specific support until 2026.The tim

41、e until then is to be dedicated to preparing a smooth,sustainable transition out of the LDC category.This entails identifying the consequences of the loss of LDC support measures and devising strategies to offset them.In line with that goal,this study aims to estimate graduation-related trade losses

42、 for Nepal and to identify approaches to compensate them.The analysis uses a partial equilibrium model to calculate the impact of tariff changes on potential trade outcomes.This approach differs from others used in the literature in that we project current trade to its expected level in 2026,using f

43、orecasts of the gross domestic product(GDP)and population of all countries.Using projected rather than current exports is important as we expect Nepalese exports to shift towards fast-growing markets that do not have special LDC schemes.If that is the case,traditional approaches based on current tra

44、de values tend to overestimate the impact of LDC graduation.Likewise,we consider future changes in Nepals tariff advantages over competitors by including the 2026 tariff rates available from the tariff reduction schedules of trade agreements that are in force.The analysis identifies,at a detailed pr

45、oduct and market level,for all potential partners,where losses are expected to be significant.The findings are contrasted with the untapped trade potential estimated for 2026 a figure calculated by tailoring the International Trade Centre(ITC)export potential methodology to the LDC graduation contex

46、t.2 Whenever the trade loss identified exceeds the untapped trade potential,Nepal may seek to prioritize strategies to improve market access,such as bilateral or plurilateral agreements,or to pursue market diversification opportunities.Conversely,whenever the untapped trade potential exceeds the tra

47、de loss,Nepal may seek to prioritize strategies that help companies overcome the frictions that prevent them from unleashing market opportunities,e.g.investment in trade promotion and advisory.This approach thus provides estimates of expected trade changes after graduation and concrete recommendatio

48、ns on actions to buffer the effects.Chapter 1 describes tariff changes to be expected upon graduation.Chapter 2 examines the estimated effects of these changes on exports.Chapter 3 summarizes export growth opportunities and the impact of compensatory approaches such as market access,trade promotion

49、and market diversification.Chapter 4 offers policy options.1 The United Nations Committee for Development Policy recommends graduation from the LDC category based on certain criteria scores that are evaluated every three years.The criteria considered are gross national income per capita,the Human As

50、sets Index and the Economic and Environmental Vulnerability Index.Countries that meet thresholds on any two of these indicators for two consecutive reviews,or alternatively more than double the gross national income threshold at two consecutive reviews,are recommended for graduation.Complementary co

51、untry-specific information and the views of the government are also considered.Nepal first met graduation criteria by surpassing the thresholds of the two indexes in 2015 and 2018.However,graduation differed then in consideration of the economic turmoil generated by the 2015 earthquake and concerns

52、over the sustainability of graduation at that time.2 For a technical document on the ITC export potential methodology,see Decreux and Spies(2016).Results of this methodology are disseminated through a free online tool,the ITC Export Potential Map(https:/exportpotential.intracen.org).The specific tai

53、loring of the methodology to the context of LDC graduation is explained in Appendix A.1.Nepal after LDC Graduation:New avenues for exports 2 How will tariffs change for Nepal?The first step in understanding how graduation can affect exports is to identify LDC-specific trade support benefiting Nepal.

54、Trade support for LDCs takes several forms,among them institutional,analytical and productive capacity support,as provided,for example,through the Enhanced Integrated Framework.This study focuses on the effect of graduation on exports through a specific aspect of trade support for LDCs:preferential

55、tariffs.We therefore start by exploring what preferential tariffs Nepal receives based on its current LDC status,what tariffs will presumably be after graduation considering existing trade agreements and,to the extent possible,whether Nepal indeed uses its existing LDC tariff preferences.Post-gradua

56、tion tariff regimes Nepalese exports face LDC-specific preferential tariffs in twenty-five markets.3 Once LDC support ends,the tariffs applied by those markets will revert to the next best scheme.Table 1 lists all markets that now grant LDC preferences to Nepal and groups them according to the type

57、of regime they will apply after graduation:non-reciprocal preferential tariff schemes for developing countries,bilateral free trade agreements,preferential tariffs under the South Asian Free Trade Area(SAFTA)and most favoured nation(MFN)tariffs.Table 1 Next best tariff schemes for Nepal in markets g

58、ranting LDC preferences Generalized System of Preferences Bilateral free trade agreement Armenia India Australia SAFTA Belarus Bangladesh Canada India4 Japan Sri Lanka Kazakhstan MFN Kyrgyzstan Chile New Zealand China Norway Iceland Russian Federation Montenegro Switzerland Republic of Korea Turkey

59、Taipei,Chinese United Kingdom Tajikistan United States5 European Union Source:ITC staff illustration based on data from the ITC Market Access Map(2021).Fifteen of the 25 markets granting LDC preferences to Nepal also have a non-reciprocal preferential tariff scheme that offers some tariff reductions

60、 to developing countries.Bangladesh,India and Sri Lanka are the only members of the South Asian Association for Regional Cooperation that grant additional preferences to Nepal due to its LDC status;they will move to the standard SAFTA preferences after graduation.Nepal also benefits from a bilateral

61、 trade agreement with India.The remaining seven markets have no alternative preferential scheme in place for which Nepal could qualify.Therefore,Nepalese exports to these markets will be subject to MFN tariffs following graduation.Some comments are in order regarding how these schemes are used in th

62、e analysis that follows.3 The European Union(EU)is considered as one market.4 For most products,the IndiaNepal bilateral trade agreement will apply.Elsewhere,the non-LDC SAFTA preferences will apply.5 There is also a specific NepalUnited States preference programme.This agreement is set to expire in

63、 December 2025,independently of the LDC status of Nepal.In the calculations that follow,this programme is assumed to be expired both pre-and post-graduation.Nepal after LDC Graduation:New avenues for exports 3 First,the non-reciprocal preferential tariff scheme for LDCs of the European Union(EU)the

64、Everything But Arms initiative provides for a transition period of three years for graduating countries.6 During that time,Nepal will continue to benefit from duty-free,quota-free market access to the EU.After that transition period,Nepal will be eligible for the EUs Generalized Scheme of Preference

65、s(GSP)for developing countries.7 For comparability purposes,our analysis assumes that Nepal will move from Everything But Arms to GSP directly upon graduation.Second,Nepal could also eventually qualify for the EUs extended,more generous GSP system,GSP+.To do so,Nepal would have to fulfil the vulnera

66、bility criteria,reflecting a non-diversified economy and low import shares into the EU,and implement 27 international conventions on labour rights,human rights,environment protection and good governance.8,9 The analysis that follows considers both scenarios,GSP and GSP+.Third,whenever more than one

67、preference scheme is applicable,our analysis assumes that Nepalese exporters make use of the most favourable one,regardless of differences in the rules of origin.Lastly,the analysis considers the tariff levels that will be available in 2026.This is done using all tariff schedules already negotiated.

68、Likewise,we project exports to 2026.10 Figure 1 Vegetable products and cereals to face steep tariff increase Note:Averages by sector weighted by pre-graduation 2026 exports.The acronym n.e.s.stands for not elsewhere specified.Source:ITC staff calculations based on data from the ITC Market Access Map

69、(2021).6 As part of the ongoing GSP review,the extension of the smooth transition out of Everything But Arms to five years is being considered.7 To be granted EU GSP preferences,a country needs to be classified below the upper middle income category of the World Bank,and not benefit from other prefe

70、rential market access schemes to the EU.8 Razzaque(2020)reports that Nepal meets the vulnerability criteria.9 Upon exiting the European Union,the United Kingdom implemented its own GSP system,similar to the one of the EU with three categories:LDC countries,general framework and enhanced framework.Th

71、e eligibility criteria for each category are also similar.See https:/www.gov.uk/guidance/trading-with-developing-nations-during-and-after-the-transition-period.10 As Nepal will graduate at the end of 2026,any effects on tariffs and subsequently on exports will materialize in 2027 at the earliest.In

72、spite of this,we estimate the effects of graduation on 2026 trade because the GDP forecasts we use,which play an essential role in our trade projections,are only available up to 2026.See additional details on methodology and data in Appendices A.1.and A.2.+27+25+9+3+2+2+2+2+1+1+2051015202530Vegetabl

73、e products n.e.sCereals&cereal productsSea animal productsApparel&textile productsAnimals&animal productsManufactured products n.e.sTextiles(fabric)Minerals,metals&productsthereofSkins,leather,products thereof and footwearVehiclesProcessed food&animal feedExcluded productsHorticultureChemicalsBevera

74、gesWood,paper,rubber,plasticsMachinery&electronicequipmentTotalchange in tariff,perc.pointsNepal after LDC Graduation:New avenues for exports 4 In the coming years,we expect Nepals exports to shift towards fast-growing markets that do not have special LDC schemes.Therefore,the increase in average tr

75、ade-weighted tariffs faced will only affect 22%of the exports projected for 2026(34%of current exports).Under the scenarios outlined in Table 1,the average trade-weighted tariff will rise from 1%to 2%.The increase will vary widely between sectors,as shown in Figure 1.While many sectors will only exp

76、erience increases smaller than one percentage point,others will see steep rises in the tariffs they face.That is,for example,the case of the vegetable products sector,and the cereals and cereal products sector,with increases of 27 percentage points and 25 percentage points in average applied tariffs

77、,respectively.Utilization rate of preferences The loss of LDC status and subsequent tariff increases can only have a negative impact on Nepals exports if tariff preferences are currently being used.Recent evidence presented from the World Trade Organization suggests there is a high rate of underuse

78、of preferences for LDCs across all sectors,especially for landlocked LDCs.It is difficult to verify if this is the case for Nepal,due to the lack of detailed data available on the use of LDC preferences from some of the countrys main partners.Some information is available through the World Trade Org

79、anizations Integrated Database,according to which the total utilization rate of preferences ranged from 72%to 81%in 20152019.Data by country show a wide range of utilization rates,from exports to the European Union and the United Kingdom staying close to 90%throughout the period,to Republic of Korea

80、 or Switzerland closer to 40%50%,and to Chile under 10%for all years.11 Note in particular that information from LDC preference-granting SAFTA partners(Bangladesh,India and Sri Lanka)are not available.12 Figure 2 Nepal regularly uses EU and British LDC preferences Note:Data for China are only availa

81、ble in 2016 and 2018.Source:ITC staff calculations based on data from World Trade Organizations Integrated Database.While preference use varies significantly between partners,it is high for some of Nepals main export destinations,namely the European Union and the United States.This suggests that the

82、 loss of LDC status in 2026 and subsequent tariff increases will indeed have a negative impact on Nepalese exports.11 While most LDC preference schemes shown in Figure 2 have been in place for a long time,Chiles was only implemented in 2014.12 Preference utilization data are also not available for A

83、rmenia,Belarus,Iceland,Kazakhstan,Kyrgyzstan,Montenegro,New Zealand,Russian Federation,Tajikistan and Turkey.0%20%40%60%80%100%20152016201720182019NorwayEU&United KingdomUnited StatesJapanAustraliaCanadaSwitzerlandRepublic of KoreaChinese TaipeiChileChinaTotalNepal after LDC Graduation:New avenues f

84、or exports 5 Rules of origin Graduation from LDC status implies a change in tariffs and in the rules of origin with which graduating countries must comply to be eligible for preferential treatment.More stringent rules of origin often lead to lower utilization rates of preferences.The next best regim

85、es listed in Table 1 are associated with both higher tariffs and often stricter rules of origin.For example,non-LDC preferential access to SAFTA countries requires 40%local value addition,instead of the 30%required under LDC status.Similarly,the 30%local value-addition requirement under the Everythi

86、ng But Arms initiative becomes a 50%requirement under GSP and GSP+.In many cases,the apparel sector must meet additional transformation conditions to qualify for preferences.Razzaque(2020)conducts a thorough review of the changes in rules of origin that Nepal can expect upon graduation.13 The toughe

87、r rules of origin post-graduation requirements can be expected to reinforce the negative impact of tariff increases on Nepals exports.As rules of origin changes are not considered in our analysis,the calculated trade losses associated with tariff changes can be considered as lower-bound estimates.13

88、 Additional details can be obtained in the ITC Rules of Origin Facilitator,a web-based application for country-and product-level information on rules of origin for 347 trade agreements(www.findrulesoforigin.org).Nepal after LDC Graduation:New avenues for exports 6 Chapter 2 The effect of tariff chan

89、ges on trade We use a partial equilibrium model to estimate the size of the effect by partner and product,considering all possible partners and all products exported consistently.In the model,trade and tariff values are projected to 2026.Trade projections are based on trade between 2015 and 2019,the

90、 expected growth rates of GDP and population of all countries,and the responsiveness of import demand to GDP per capita and population growth.Tariff projections assume that,upon graduation,Nepalese exports that had LDC preferences will receive the next best alternative tariff available.For all other

91、 countries,we reflect the tariff situation in 2026 by integrating information from tariff reduction schedules of agreements that are now in force.To compute the model,we use trade and tariff data coming from the ITC Trade Map and Market Access Map databases,respectively,as well as GDP forecasts from

92、 the International Monetary Funds April 2021 World Economic Outlook,population projections from the World Banks World Development Indicators database and other sources.Details on the methodology and data used can be found in Appendix A.1.Results show that Nepal would export$1,372 million in 2026 if

93、it retained LDC status,but only$1,313 million if the country moved to the next-best alternative tariff regime shown in Table 1 a loss of$59 million.14 The estimated loss represents 4.3%of total projected exports,yet specific individual product-market combinations can be severely affected.Losses are

94、expected to concentrate in exports to the EU($18 million),Turkey($14 million),China($11 million),the United Kingdom($7 million)and Canada($3 million).Among Nepals main export destinations,projected exports to India and the United States are likely to remain largely unaffected,while projected exports

95、 to other top trade partners will suffer losses between 17%and 33%.Figure 3 Losses to EU,Turkey and China will be highest Note:The figure shows the markets with the largest losses,up to 90%of total losses.Source:ITC staff calculations based on data from the ITC Market Analysis Tools(2021).14 Annual

96、exports were$802 million on average over 20152019.EU,$18 million,31%Turkey,$14 million,23%China,$11 million,19%United Kingdom,$7 million,11%Canada,$3 million,Japan,$2 million,3%United States,$1 million,2%Rest of the world,$3 million,5%Nepal after LDC Graduation:New avenues for exports 7 Figure 4 Exp

97、orts to largest partners are minimally affected Note:The figure shows the main export partners,up to 90%of total exports.Source:ITC staff calculations based on data from the ITC Market Analysis Tools(2021).Nepals bilateral trade agreement with India offers duty-free access for most Nepalese exports.

98、For other products,non-LDC SAFTA preferences are generally as favourable as LDC SAFTA preferences.However,the bilateral agreement contains quotas on three categories of goods relevant to Nepals exports:acrylic yarn,copper products and vegetable fats.We analyse these cases in detail in Box 1.15 In th

99、e case of the United States,Nepal does not export significant quantities of the products that hold preferences under the US LDC preferences scheme.This explains the limited expected impact of graduation observed in Figure 4.Figure 5 Top projected EU export losses will be in Germany and France Note:T

100、he figure shows the markets with the largest losses,up to 90%of total losses.Source:ITC staff calculations based on data from the ITC Market Analysis Tools(2021).15 In the case of Bangladesh,a significant export partner not featured in Figure 4,trade after graduation will also continue to enjoy pref

101、erential access under SAFTA.As a result,projected exports are largely unaffected.0%5%10%15%20%25%30%35%40%0100200300400500600700800900IndiaUnitedStatesEuropeanUnionTurkeyUnitedKingdomChinaRest ofthe world$,millionCurrent exportsProjected exports under LDC statusExport loss(%of projected)-8-7-6-5-4-3

102、-2-10$,millionGSPGSP+Nepal after LDC Graduation:New avenues for exports 8 Export losses in the EU range from$446,000 to$7 million,with the largest absolute losses concentrated in Germany,France,and Italy.Losses for all main destinations in the EU range from 8%to 24%of projected exports for 2026.Figu

103、re 5 illustrates how losses would be drastically reduced under the GSP+scheme.Losses in exports to the European Union would drop from$18 million to less than$1 million if GSP+preferences applied to trade with the EU instead of GSP preferences.While total export losses upon LDC graduation were estima

104、ted at$59 million,or 4.3%of projected exports for 2026,the impact would decline to$40 million(3%of projected exports)if GSP+applied to EU countries after graduation.The projected losses will likely be concentrated in the following sectors:apparel($21 million),synthetic textile fabrics($14 million),c

105、arpets($6 million),metal products($3 million)and miscellaneous manufactured products($2 million).Sectors with losses under$2 million are shown on the right-side panel of Figure 6,which also reflects the differences of the effect across sectors.While the loss represents a relatively small share of ex

106、ports forecast for 2026 for some sectors textile products,for example(2%)the loss is sizable for others,notably processed cereals(69%)and home textiles(25%).Figure 6 also highlights the potential of GSP+preferences to curtail graduation-related trade losses in specific sectors.GSP+grants duty-free s

107、tatus to several industries in the textile and apparel sectors.This would benefit some of the products most affected by LDC graduation in the apparel,carpet,home textile,textile fabric and textile product sectors.16 Other sectors,such as some manufactured goods and some processed food products,would

108、 not benefit,or would only marginally benefit.Figure 6 Apparel and synthetic textile exports to decline the most Note:The figure shows the sectors with the largest losses,up to 90%of total losses.The acronym n.e.s.stands for not elsewhere specified.Source:ITC staff calculations based on data from th

109、e ITC Market Analysis Tools(2021).16 As pointed out in Razzaque(2020),access to GSP and GSP+preferences for textiles and clothing requires the fulfilment of stringent rules of origin.In particular,double transformation processes are needed,instead of the single transformation processes that suffice

110、to qualify for Everything But Arms preferences.-20%-15%-10%-5%0%-25-20-15-10-50$,millionLosses$2 millionGSPGSP+%of projected trade-80%-70%-60%-50%-40%-30%-20%-10%0%-1.6-1.4-1.2-1.0-0.8-0.6-0.4-0.20.0$,millionLosses$2 millionGSPGSP+%of projected tradeNepal after LDC Graduation:New avenues for exports

111、 9 Box 1 Quotas under the IndiaNepal free trade agreement The bilateral trade agreement between India and Nepal ensures that most trade flows will continue to be duty free after LDC graduation.However,the agreement establishes quotas for acrylic yarn,copper products and vegetable fats,which are an i

112、mportant part of Nepalese exports.Each case is considered in detail below.Acrylic yarn:The quota of acrylic yarn is 10,000 tons,above which a 5%duty will apply.Projected exports for 2026 are 9,000 tons,meaning that they will remain duty free and graduation should not have an impact on exports.If acr

113、ylic yarn exports to India exceed the quota,those beyond the quota will be reduced by 11%12%.Copper products The quota of copper products is set at 10,000 tons,with a 5%MFN tariff applied on out-of-quota exports.According to projections,exports will reach 3,300 tons by 2026.As the quota will not be

114、binding,graduation is not expected to have an effect on exports of copper products.Vegetable fats Nepal has exported large quantities of vegetable fats to India in recent years,especially processed palm oil and soybean oil.Sustaining these exports has become a top priority for Nepal.Nepalese exports

115、 of palm oil and soybean oil are refined from crude imports that enter the country under a low import duty and move on to India duty free after processing.The same crude oil imports would face high tariffs if they entered India directly.After LDC graduation,the bilateral trade agreement between Indi

116、a and Nepal will apply to these exports.The quota for vegetable fats under the agreement is 100,000 tons.The applicable above-quota tariffs for the main vegetable fats that Nepal exports to India range from 25%to 54%.The quota will be easily surpassed if the high volumes of exports in these categori

117、es continue,implying a major increase in tariffs upon graduation.The out-of-quota tariff for palm oil exceeds that for soybean oil,as does its price,so we assume that the quota will be used for palm oil after graduation.Under this assumption and considering an expected palm oil price of$1 per kilogr

118、am in 2026,estimated export losses amount to$21 million for palm oil and$21 million for soybean oil.In this scenario,total graduation-related export losses reach$101 million,or 13%of total projected exports for 2026.Nepal after LDC Graduation:New avenues for exports 10 Chapter 3 Compensation strateg

119、ies Expected export losses after Nepal is no longer an LDC could be offset through several mitigation or adaptation strategies.These include pursuing better market access conditions,using trade promotion to tackle hurdles that prevent the realization of export potential,or facilitating market divers

120、ification.Table 2 identifies the sectors and markets likely to face the largest losses,as well as possible corresponding mitigation strategies.The Export Potential Indicator allows us to evaluate whether trade promotion efforts in these markets and sectors can compensate for graduation losses.ITC de

121、veloped this methodology to identify growth opportunities for exports.The Export Potential Indicator is based on three pillars:(i)the current and projected supply capacity of Nepal for any given product,(ii)the current and projected demand for that product in a given target market,as well as the mar

122、ket access conditions for Nepal in terms of future relative tariffs and transportation costs,and(iii)the overall ease of trade between Nepal and each target market.For each regularly exported product,we used the Export Potential Indicator to calculate potential export values for 2026,in dollar terms

123、,to any given market,for the post-graduation scenario considered in Table 1.We compared the post-graduation export potential to the post-graduation projected exports to identify untapped export potential after graduation.17 The market-sector combinations listed in Table 2 accumulate an untapped expo

124、rt potential of$18 million,i.e.,just over 30%of projected trade losses.The sectors also have untapped export potential in other destinations.Untapped export potential may be realized through targeted trade promotion for example,by helping firms overcome non-tariff measures,comply with rules of origi

125、n,or meet consumer preferences in the target market.To determine whether such efforts could compensate for the losses,and whether they should focus on the affected market or alternative ones,we contrast the expected losses for each sector-market to their untapped potential,and that of alternative ma

126、rkets.Market access Improving market access conditions through new agreements or adherence to more preferential schemes may be the preferred option even if there is a substantial untapped export potential.In particular,in the case of the most affected sectors of exports to the EU,pursuing GSP+status

127、 would almost completely counterbalance graduation losses.Total expected losses of$18 million would fall to$644,000.A similar case can be made with respect to the Enhanced Framework of the United Kingdom,with requirements that closely resemble those of the GSP+.Trade promotion In some of cases,the u

128、ntapped export potential in a given market and sector exceeds the expected graduation-related export losses.This is the case for exports of apparel to Japan,beauty products and perfumes to China,and carpets to Canada.In all three cases,targeted trade promotion of the products with the most export gr

129、owth potential to the affected market could help unlock enough exports to offset the expected losses.17 See additional details on the methodology in Appendix A.1 and in Decreux and Spies(2016).Nepal after LDC Graduation:New avenues for exports 11 Apparel exports to Japan are expected to decline by$9

130、28,000 but have$2.2 million untapped export potential.Losses are spread among different products,18 but$1.9 million of the untapped potential concentrates in Scarves,veils&similar of wool/fine animal hair(product code 621420).Exports of beauty products and perfumes to China are likely to drop by$661

131、,000,across many products.19 However,the sector has untapped export potential of$1.6 million most of it in Dentifrices(product code 330610,$1.5 million).The losses for carpets exported to Canada are projected at$563,000,with more than 90%of this decline originating in three types of knotted and tuft

132、ed floor coverings.20 By contrast,the untapped potential of the sector to export to Canada is$611,000,with$559,000 in Floor coverings of wool/fine animal hair,knotted(570110).Market diversification In other cases,the post-graduation export potential in the affected market will already be largely rea

133、lized,or it will not be big enough to offset the expected losses.In such cases,trade promotion in the affected market is not the best strategy to prepare for graduation.Rather,market diversification that is,increasing exports to other markets should be considered instead.Table 2 lists the top altern

134、ative markets for the most affected market-sector combinations that will lack sufficient export potential to offset losses.These markets have the largest post-graduation untapped export potential for the sector in question.Selected cases for which market diversification should be considered are brie

135、fly analysed below.Additional details on the remaining market diversification cases listed in Table 2 can be found in Table A.3.1 of the appendix.Synthetic textile fabrics Turkey Exports in the synthetic textile fabric sector to Turkey are expected to face a$14 million graduation-related loss,the la

136、rgest projected market-sector impact.The post-graduation export potential of synthetic textile fabrics to Turkey is rather low,at$359,000,meaning that the promotion of synthetic textile fabrics exports to Turkey would not compensate for the expected losses.However,the sector has a projected untapped

137、 export potential of over$16 million to India and Bangladesh.More specifically,export losses to Turkey are expected to concentrate in products 550921($9.1 million)and 550951($3.9 million).21 For those same products,India has an untapped export potential of$5.2 million and$2.8 million respectively,wh

138、ile products 550932 and 551012,which are different types of cabled yarn,have$5 million and$1.1 million in untapped export potential to Bangladesh.22 Export promotion that aims to facilitate Nepalese exports of these products to India,Bangladesh and other markets may offset the losses expected for th

139、is sector in Turkey upon graduation.18 Losses occur for more than 130 products,but Jerseys,pullovers&similar,of wool,knit/crochet(611011),Womens jackets of cotton(620432),Jerseys,pullovers&similar,of cashmere,knit/crochet(611012)and Womens trousers&shorts of cotton(620462)represent more than 60%of l

140、osses in apparel exports to Japan.19 Among them,hair lacquers,dentifrices and beauty,make-up and skincare preparations account for almost 60%of the expected market-sector losses.20 Product codes 570110,570190 and 570310.The corresponding product descriptions are:Carpets and other textile floor cover

141、ings,of wool or fine animal hair,knotted,whether or not made up;Carpets and other textile floor coverings,of textile materials,knotted,whether or not made up(excluding those of wool or fine animal hair);and Carpets and other floor coverings,of wool or fine animal hair,tufted needle punched,whether o

142、r not made up.21 The corresponding product descriptions are:Yarn,=85%polyester staples.22 The precise product descriptions are Multiple folded or cabled yarn containing=85%acrylic or modacrylic staple fibres by weight(excluding sewing thread and yarn put up for retail sale)(550932)and Multiple folde

143、d or cabled yarn containing=85%artificial staple fibres by weight(excluding sewing thread and yarn put up for retail sale)(551012).Nepal after LDC Graduation:New avenues for exports 12 Metal products China The projected loss in exports of metal products to China is$2.5 million,with no remaining unta

144、pped potential in that market.The biggest loss($1.9 million)will be in Statuettes and other ornaments(codes 830621 and 830629).Alternative markets for this product are the United States,the EU and India,which have large untapped export potential for statuettes and other ornaments:$1.9 million in the

145、 United States,$1 million in the EU and$291,000 in India.Apparel Canada Apparel exports to Canada are expected to drop by$1.8 million,dispersed over multiple products,with little remaining export potential to the Canadian market($256,000).However,the untapped potential for apparel exports to the Uni

146、ted States and China is projected at$3.6 million and$3.4 million,respectively.While the untapped export potential is also spread across many products in the sector,a few have more potential for export growth.For instance,certain jerseys have$891,000 and$422,000 in untapped export potential in the Un

147、ited States and China,respectively,while some scarves have$621,000 and$777,000 in untapped export potential in each market.23 Carpets China Exports of Nepalese carpets to China can be expected to lose$1.5 million upon graduation,with almost no remaining potential for the sector in that market.Most o

148、f the loss($1.3 million)is concentrated in Floor coverings of wool or fine animal hair,tufted or knotted(codes 570310 and 570110).This product,specifically code 570110,has$4.9 million,$2.5 million and$2.4 million in untapped export potential in the United States,Switzerland and Japan,respectively.23

149、 The product descriptions and codes are:Jerseys,pullovers&similar,of cashmere,knit/crochet(611012)and Scarves,veils&similar of wool/fine animal hair(621420).Nepal after LDC Graduation:New avenues for exports 13 Table 2 Adaptation strategies to counter significant export losses($,000)Subsector Countr

150、y Export losses Untapped export potential Untapped export potential in other markets Strategy Apparel European Union 11,208 3,522 United States(3,576),China(3,368),India(1,881)Market access(GSP+)United Kingdom 5,661 141 Market access Canada 1,784 256 Market diversification Japan 928 2,155 Trade prom

151、otion Beauty products&perfumes China 661 1,633 Trade promotion Carpets European Union 3,403 4,420 United States(5,084),Switzerland(2,543),Japan(2,487)Market access(GSP+)China 1,514 10 Market diversification Canada 563 611 Trade promotion Crops n.e.s.China 742 526 European Union(3,991),United States(

152、2,598),United Kingdom(753)Market diversification Food products n.e.s.(processed)China 753 356 European Union(757),Canada(403),United Kingdom(268)Market diversification Glass articles United States 713 113 India(2,344),China(202),European Union(154)Market diversification Home textiles European Union

153、1,014 44 Market access(GSP+)Metal products China 2,549 0 United States(2,096),European Union(1,511),India(578)Market diversification Misc.manufactured products China 1,361 258 European Union(1,072),United States(992),United Kingdom(893)Market diversification Skins,leather&products thereof China 992

154、574 India(2,986),European Union(666),Turkey(180)Market diversification Synthetic textile fabric Turkey 13,685 359 Bangladesh(8,161),India(7,987),European Union(2,729)Market diversification Textile fabric n.e.s.European Union 863 208 Market access(GSP+)Textile products n.e.s.European Union 637 2,375

155、Market access(GSP+)Note:The table shows the market-sector combinations that are expected to face losses exceeding$500,000.They represent 83%of total projected losses.The acronym n.e.s.stands for not elsewhere specified.Source:ITC staff calculations based on data from the ITC Market Analysis Tools(20

156、21).Nepal after LDC Graduation:New avenues for exports 14 Figure 7 Some NTIS priorities face higher tariffs and export losses Note:Product/sector definitions follow NTIS 2016.Tariffs changes shown are a weighted average using projected 2026 exports.Source:ITC staff calculations based on data from th

157、e ITC Market Analysis Tools(2021).0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%051015202530354045CardamomGingerTeaMedicinalandaromaticplantsLeatherFootwearChyangrapashminaKnottedcarpetsAll fabrics,textiles,yarn,rope%points$millionLossUntapped export potentialTariff increase(%points)Box 2 Nepal Trade Inte

158、gration Strategy priority products after graduation Nepal launched the latest Nepal Trade Integration Strategy(NTIS)in 2016,charting a course to develop exports in the following five years.NTIS 2016 set out several objectives,among them strengthening an export-enabling environment,enhancing trade-re

159、lated infrastructure and reinforcing institutional capacity.NTIS 2016 also listed priority products and services for exports based on world market conditions,export performance,domestic supply conditions and socioeconomic impact.The sectors identified were:Agriculture and forest products Cardamom,gi

160、nger,tea and medicinal and aromatic plants.Craft and manufacturing products:Leather,footwear,chyangra pashmina,knotted carpets and all fabrics,textiles,yarn and rope.Services:Skilled and semi-skilled professionals in various categories,information technology and business process outsourcing,and tour

161、ism(leisure,business,education and medical).Tariff changes on certain NTIS 2016 priority products,such as cardamom and ginger,will be negligible(weighted)after graduation.Other goods will face significant tariff increases:up to 1.5 percentage points(knotted carpets,fabrics,textiles,yarn and rope),2

162、percentage points(leather)and more than 4 percentage points(chyangra pashmina).Some NTIS priority products are expected to experience the largest export losses upon graduation,between$1 million and$14 million.It is interesting to note that after LDC graduation,the untapped export potential of all NT

163、IS products except leather will exceed the losses they are expected to encounter.This points out to the potential for continued trade promotion efforts for these goods,despite the higher tariffs associated with graduation.Nepal after LDC Graduation:New avenues for exports 15 Chapter 4 Policy options

164、 The partial equilibrium analysis used in this report shows that Nepal can expect to lose$59 million in export revenues in 2026 due to LDC graduation tariff changes.This represents 4.3%of projected exports for that year and losses in specific markets and sectors will probably be considerable.Targete

165、d responses are the best way forward to counterbalance these losses:Improve market access:Obtaining GSP+status to access the European Union could reduce total expected losses up to 30%,especially in the apparel and textile products subsectors,which would avoid losing up to$17 million in export reven

166、ue.Qualifying for GSP+status requires meeting economic criteria(vulnerability,non-diversification,and low shares of imports in the EU),ratifying 27 international conventions and passing the monitoring of their implementation.Several issues should be examined when considering this approach to counter

167、balance graduation losses,including:For how long will Nepal meet the economic criteria?What would be the process to ratify pending conventions?How can the monitoring process be facilitated?How might the GSP+scheme change when it is revised 2024?Moreover,as most benefits would concentrate in apparel

168、and textile products,it is important to know what additional support measures might be necessary to comply with the stricter rules of origin of the GSP+scheme.Similar considerations should be explored regarding the United Kingdoms Enhanced Framework.Targeted trade promotion:After graduation,unlockin

169、g the full export potential of apparel to Japan,beauty products and perfumes to China,and carpets to Canada could offset the losses expected for those markets and sectors.Targeted trade promotion that enables companies to overcome current frictions such as non-tariff measures,rules of origin or spec

170、ific consumer preferences in the target market can help realize the export potential of these sectors and markets.Market diversification:Several other sector-market combinations will see a drop in exports without having enough space to counter this decline through trade promotion.However,alternative

171、 markets are available with sufficient untapped export potential,turning market diversification into a promising strategy to balance out graduation-induced trade losses.A salient example of this is the case of exports of synthetic textile fabrics to Turkey,expected to fall by$14 million,while the se

172、ctor will have an untapped potential of$8 million in Bangladesh and$8 million in India.Actions targeted to overcome frictions that may hinder these exports to Bangladesh and India should be explored.Nepal after LDC Graduation:New avenues for exports 16 References Decreux,Y.,and Spies,J.(2016).Export

173、 Potential Assessments:A methodology to identify export opportunities for developing countries.Mimeo.Razzaque,M.A.(2020).Nepals graduation from the least developed country group:Potential implications and issues for consideration.Working Paper Series Macroeconomic Policy and Financing for Developmen

174、t Division,ESCAP,March 2020.WP/20/01 World Trade Organization(2021).Utilization of Trade Preferences by Least Developed Countries:2015-2019 patterns and trends.Note by the Secretariat,7 May 2021(G/RO/W/204).Nepal after LDC Graduation:New avenues for exports 17 Appendices Appendix 1 Methodology Effec

175、t of graduation We have customized and applied a partial equilibrium model to assess the trade impact of tariff changes to Nepal,based on the following assumptions:1)The elasticity of supply is infinite and returns to scale are constant:every country can supply an unlimited amount of the products it

176、 now exports,at current prices.24 2)The global elasticity of import demand for a product is equal to one.3)Products from different foreign suppliers are substitutable with a constant elasticity of substitution(Armington assumption).4)Preferential tariffs are fully used.25 The trade and tariff values

177、 in the model are projected to 2026.We project trade by(i)forecasting country s share in market for a given product (ProjMSi j k)using country s GDP growth rate relative to the GDP growth rate of its competitors and(ii)evaluating how import demand of product in market (ProjMj k)will develop based on

178、 its elasticity to market s expected growth rates of GDP and population,and expected tariff changes.26 We define X=ProjMS ProjM where-X:projected exports of from to;-ProjMS:projected market share of in s imports of;-ProjM:projected demand of for.Tariff projections assume that Nepal will move to the

179、next best alternative tariff that is available following graduation(Table 1).For all other countries,we reflect the tariff situation in 2026 by integrating information from tariff reduction schedules of agreements that are currently in force.First,tariff changes reduce Nepals market share by 1+1+gra

180、d Then,the sum of market shares in a given market is normalized to one.This ensures that the first order conditions of the demand by origin optimization are met.Based on old and new market shares,average tariffs with and without graduation are computed.Overall import demand is reduced by:1+1+grad 24

181、 Nepals exporters will not reduce their prices in response to lower demand for their products.25 Note that stricter rules of origin may apply under the alternative tariff regimes,which could prevent Nepalese exporters from accessing preferential tariffs.26 The elasticity of import demand to populati

182、on is assumed to be equal to 1.The elasticity of import demand to GDP per capita is estimated,see Decreux and Spies(2016).We increase the import demand by the factor 1+current1+projected,where is the average tariff applied by a market to all suppliers weighted by their market shares,to account for f

183、uture tariff reductions under trade agreements that are currently being implemented.Nepal after LDC Graduation:New avenues for exports 18 where is the average tariff applied by a market to all suppliers weighted by their market shares.27 This simple procedure leads to the same result as analytically

184、 solving the partial equilibrium model described above.Calculation of untapped trade potential ITC has established a methodology to calculate potential trade values based on a countrys potential share in a given market and the markets projected demand,EPI=MS ProjM with MS=ProjMS Ease MAccess The pot

185、ential market share of country in product and market combines information of s world market share of,the ease of trade between and,and market access.ProjMS is projected based on the growth rate of relative to its competitors.ProjM is projected based on the elasticity of import demand for to s expect

186、ed growth rate and expected tariff changes.Any gap between potential and actual trade indicates room for export growth.28 In the case of Nepal,the gap we considered is between potential exports after graduation and projected exports after graduation.We call this gap post-graduation untapped export p

187、otential.Contrasting the post-graduation untapped export potential with the projected export losses at the sector and market level helps Nepal set priorities either on the negotiation of better tariff regimes or on trade promotion,in affected markets or in alternative ones.27 The indices LDC and gra

188、d refer to the specific situation of Nepal in 2026.28 Please refer to Decreux and Spies(2016)for a detailed description of the method.Nepal after LDC Graduation:New avenues for exports 19 Appendix 2 Data The model uses trade and tariff data from the ITC Trade Map and Market Access Map databases,resp

189、ectively.For trade projections,we use an arithmetic average of direct and mirror flows when both countries are estimated to be reliable reporters of their trade statistics(or when neither is reliable,but both report a trade flow for the same given product).29 When only one of the trade partners is r

190、eliable,this countrys reported trade flow is retained.For the calculation of export potential,we use a geometric average of reliable direct and mirror flows.To reduce the impact of outliers,a weighted average of 20152019 data is calculated with a higher weight given to years that are more recent.Imp

191、ort demand and Nepals exports in current United States dollars are projected to 2026 using the International Monetary Funds April 2021 GDP forecasts and an estimation of import demand elasticities.Two sets of tariffs feed into the calculations:the first corresponds to tariffs during the observation

192、period(20152019),while the second corresponds to tariffs during the projection period(2026).Elasticities of substitution are taken from the Global Trade Analysis Project(GTAP)database and from the Centre dtudes prospectives et dinformations internationals.29 An earlier version of the reliability ass

193、essment is described in Decreux and Spies(2016).Nepal after LDC graduation:New avenues for exports 20 Appendix 3 Additional tables Table A3.1 Detail of market diversification options for markets and sectors with significant export losses and limited untapped potential(US$thousands)Affected market Al

194、ternative markets Untapped export potential Loss Apparel Canada United States China India 1,784 3,576 3,368 1,881 229 Hats&other headgear,knitted/crocheted etc.(650500)891 Jerseys,pullovers&similar,of cashmere,knit/crochet(611012)777 Scarves,veils&similar of wool/fine animal hair(621420)349 Hats&oth

195、er headgear,knitted/crocheted etc.(650500)142 Gloves of wool/fine animal hair,knit/crochet(611691)621 Scarves,veils&similar of wool/fine animal hair(621420)527 Womens jackets of cotton(620432)261 Mens shirts of cotton(620520)105 Jerseys,pullovers&similar,of wool,knit/crochet(611211)592 Womens trouse

196、rs&shorts of cotton(620462)422 Jerseys,pullovers&similar,of cashmere,knit/crochet(611012)238 Womens trousers&shorts of cotton(620462)102 Mens shirts of cotton(620520)Carpets China United States Switzerland Japan 1,514 5,084 2,543 2,487 744 Floor coverings of wool/fine animal hair,tufted(570310)4,884

197、 Floor coverings of wool/fine animal hair,knotted(570110)2,487 Floor coverings of wool/fine animal hair,knotted(570110)2,427 Floor coverings of wool/fine animal hair,knotted(570110)520 Floor coverings of wool/fine animal hair,knotted(570110)Crops n.e.s.China European Union United States United Kingd

198、om 742 3,991 2,598 753 340 Medicinal plants,herbs,etc.,nes(1211XX)2,547 Medicinal plants,herbs,etc.,nes(1211XX)1,715 Medicinal plants,herbs,etc.,nes(1211XX)378 Medicinal plants,herbs,etc.,nes(1211XX)283 Vegetable products nes(140490)1,444 Vegetable products nes(140490)883 Vegetable products nes(1404

199、90)376 Vegetable products nes(140490)118 Bamboos(140110)Food products n.e.s.(processed)China European Union Canada United Kingdom 753 757 403 268 354 Uncooked pasta(190219)575 Pasta(190230)219 Pasta(190230)253 Pasta(190230)125 Sweet biscuits(190531)108 Uncooked pasta(190219)171 Uncooked pasta(190219

200、)Note:The table displays the most affected market-sector combinations that do not have enough untapped export potential to counterbalance the effect of graduation.It also lists the top three alternative destinations according to their untapped export potential.Below each country-sector,the products

201、with the largest shares of losses or export potential are listed.Source:ITC staff calculations based on data from the ITC Market Analysis Tools(2021).Nepal after LDC Graduation:New avenues for exports 21 Affected market Alternative markets Untapped export potential Loss Glass articles United States

202、India China European Union 713 2,344 202 154 711 Table/kitchen glassware,of glass ceramics(701310)2,344 Glass beads(701810)103 Glass beads(701810)100 Cullet&other glass waste(700100)99 Cullet&other glass waste(700100)53 Glass beads(701810)Metal products China United States European Union India 2,549

203、 2,096 1,511 578 1,631 Statuettes&other ornaments(830629)1,890 Statuettes&other ornaments(830629)1,033 Statuettes&other ornaments(830629)291 Statuettes&other ornaments(830629)622 Copper articles,nes(74XXXX)196 Copper articles,nes(74XXXX)241 Statuettes&other ornaments(830621)224 Statuettes&other orna

204、ments(830621)Misc.manufactured products China European Union United States United Kingdom 1,361 1,072 992 893 542 Mattresses nes(940429)259 Bags,cases,holsters&similar containers,plastics/textiles outer surface(420292)479 Original sculptures&statuary(970300)305 Original sculptures&statuary(970300)42

205、7 Paintings(970110)228 Christmas articles,nes(950510)341 False beards,eyebrows&-lashes,of human hair(670420)251 Paintings(970110)229 Original sculptures&statuary(970300)142 Collages&similar decorative plaques(970190)Note:The table displays the most affected market-sector combinations that do not hav

206、e enough untapped export potential to counterbalance the effect of graduation.It also lists the top three alternative destinations according to their untapped export potential.Below each country-sector,the products with the largest shares of losses or export potential are listed.Source:ITC staff cal

207、culations based on data from the ITC Market Analysis Tools(2021).Nepal after LDC Graduation:New avenues for exports 22 Affected market Alternative markets Untapped export potential Loss Skins,leather&products thereof China India European Union Turkey 992 2,986 666 180 515 Grains of hides&skins of bo

208、vine or equine animals(410411)2,918 Hides&skins of goats or kids,in the wet state(410621)386 Hides and skins of bovine or equine animals,nes(410419)180 Hides&skins of goats or kids,in the wet state(410621)306 Hides and skins of bovine or equine animals,nes(410419)279 Grains of hides&skins of bovine

209、or equine animals(410411)165 Hides&skins of goats or kids,in the wet state(410621)Synthetic textile fabric Turkey Bangladesh India European Union 13,685 8,161 7,987 2,729 9,130 Yarn,=85%(mod-)acrylic staples(550932)5,260 Yarn,=85%polyester staples(550921)3,902 Single yarn,=85%polyester staples(55092

210、1)1,095 Cabled yarn,=85%artificial staples(551012)2,757 Single yarn,=85%polyester staples(550921)808 Yarn,=85%polyester staples(550921)480 Cabled yarn,=85%(mod-)acrylic staples(550932)Note:The table displays the most affected market-sector combinations that do not have enough untapped export potenti

211、al to counterbalance the effect of graduation.It also lists the top three alternative destinations according to their untapped export potential.Below each country-sector,the products with the largest shares of losses or export potential are listed.Source:ITC staff calculations based on data from the ITC Market Analysis Tools(2021).Printed by ITC Digital Printing Service.A free pdf is available on ITCs website at:www.intracen.org/publications.