International Trade and Finance - Essay Example

A country can only be considered least developed if it fulfills the three criteria suggested by the Committee for Development Policy (CDP) which include low-income, weak human assets, and high economic vulnerability (United Nations Framework Convention on Climate Change (UNFCC), 2011). Due to the fact that international trade plays an important role for the development of LDCs, World Trade Organization (WTO) should also be considered. The main thrust of this paper is to have an in-depth analysis with regard to the trade and economy of LDCs from the perspective of the WTO, and determine how does it help LDCs.

Nepal and the World Trade Organization (WTO) WTO is the “only international organization dealing with rules of trade between nations.the goal is to help producers of goods and services, exporters, and importers conduct their business” (World Trade Organization (WTO), n.d.). There are currently 153 WTO members worldwide and most of them have high performing economies; however, they commit themselves to the objectives of WTO and reaffirm to the agreement that trade concessions and special provisions will be given to LDCs (World Trade Organization, 2001, p.9). .

Nepal is one of the poorest and underdeveloped countries in Asia, and become the first member of WTO among LDCs in 2004 (United Nations, 2007, p.75). Nepal’s application for accession to WTO had last for almost 14 years until such time that the organization decided to give the Nepalese government a formal hearing in the last stages of the accession process (Gallagher, 2005, p.54). The country bid for membership because it was “motivated by a desire to ensure predictable market access and become eligible for the special concessions available to LDCs under WTO rules” (Baumuller, et al., 2008, p.1).

Aside from this, the country also wanted to enter the export and industrial sector in India and it needs to have a multilateral back-up that would assure its transit to the overseas market. WTO membership is the only choice for Nepal considering that it did not have the capacity to compete with the fastest growing economy in the world like China. As a result, Nepal is given preferential access and bilateral agreement in the Indian market that made the country more competent to trade and take full advantage in the global trade opportunities.

“Close collaboration between business, government and civil society gave Nepal access to the benefits of the global trading system in the midst of constitutional crisis” (Gallagher, 2005, p.55). However, the total benefits offered by WTO membership are not for free and not automatic because various efforts are needed such as the ability of Nepal to take advantage with the enhanced opportunities and learned to become an independent economic country. The membership is not a guarantee for Nepal to have a long-term economic