Bridge of Europe and Nepal

EU-Nepal Relations

After the establishment of the diplomatic relations between Nepal and the European Union in 1973, the Union has extended invaluable cooperation to the socio-economic development efforts of Nepal. EEC joined the Nepal Aid Group in 1982 so as to coordinate its position with other donor countries. Besides economic assistance, the European Union has also taken keen interest in the problems of Bhutanese refugees in Nepal. The Commission of the European Communities established the EC Consultant Office in Nepal in May 1992 with a view to expanding bilateral contacts.

Nepal established residential Embassy in Brussels and appointed Mr Durgesh Man Singh as the first Royal Nepalese Ambassador to EEC in 1992. Mrs. Francine Henrich was appointed EEC?s first Ambassador to Nepal in November 1991 with residence in New Delhi.

An Agreement concerning establishment of EC delegation in Nepal was signed on 13th of March 2002 in Kathmandu. With the signing of the agreement, a full-fledged EC delegation office has been established in Kathmandu.

Nepal?EU Economic Cooperation
Since the inception of EU assistance to Nepal, the Commission for the European Communities has provided a grant assistance of about 48 million ecu to Nepal representing an average of 3.2 million ecu per year. The large portion of the EU assistance has been channelled to rural development projects.

The first annual meeting between Nepal and EC was held in Kathmandu from 17 to 19 February 1992. Similarly, the second meeting was also held in Kathmandu from 4 to 5 November 1993. In this meeting both sides reviewed the ongoing projects/programs and also discussed the future areas of cooperation.

Nepal-EC annual talks have been replaced by a Joint Commission following the entry into force of the Co-operation Agreement. The Joint Commission is a mechanism that meets every two years and reviews the ongoing projects, discusses pipeline projects and new projects to be implemented with EU assistance. A Cooperation Agreement with EC was signed in Brussels on November 20, 1995. The agreement covers the areas like: trade and commercial cooperation, economic cooperation, development cooperation, joint investment, energy, science and technology, agriculture, environment, and human resource development.

The First Session of the Nepal-EC Joint Commission was held in Nepal from November 20 to 21, 1996. The meeting identified a number of priority areas for Nepal-EC cooperation. The Second Session of the Nepal-EC Joint Commission was held in Brussels from October 7 to 8, 1999. The Nepalese delegation was led by Special Secretary Mr. Narayan S. Thapa and the EC delegation was led by Mr. Emiliano Fossati, Director for Asia (Except Japan and Korea). The Joint Commission decided on the course of development cooperation between Nepal and EC until 2001. At this meeting, the importance of human rights was noted by both sides as an essential element upon which the EC-Nepal Co-operation was built.

An Agreement between the European Community and the Kingdom of Nepal on Trade in Textile products was signed on December 10, 2003. Likewise, Nepal and EC have singed a Framework Agreement for exporting sugar to EC under the EBA (Everything but Arms) initiative.

The Third Session of the Nepal-EC Joint Commission was held in Kathmandu on 19 March 2002.

The EU has committed more than Euro 130 million in development assistance to Nepal since 1977 (from 1991 to 1997 commitments amounted to Euro 90 million). Focal areas include irrigation and rural development, as well as programmes in animal health, watershed management, reproductive health, primary education and institution building.

The Fourth Session of Nepal-EC Joint Commission was held in Brussels on September 21, 2004. The Joint Commission discussed about the Bhutanese refugee problem, and also discussed about a wide spectrum of Nepal-EC cooperation and reviewed existing bilateral cooperation including areas of development partnership between Nepal and the European Union. The Joint Commission stressed the need to enhance human rights protection and promotion to support capacity building measures. Before the Session, meetings of the two working groups namely the Working Group on Economic and Trade Cooperation and Sub-commission on Development Cooperation were held in Kathmandu on May 2004.

On December 20, 2004, the European Commission adopted the regulation prolonging Nepal's derogation from GSP rules of origin for certain textile products for the period of two years until 31/12/2006.

A Memorandum of Understanding (MOU) on National Indicative Programme (NIP) for Nepal (2002-2006) was signed between Nepal and the European Commission on October 20, 2004 in Brussels. The National Indicative Programme (NIP) 2002-2006 for Nepal takes forward the main goals as laid out in the EC-Nepal Country Strategy Paper, 2002-2006.

The EC's assistance will be concentrated on the overarching objective of poverty reduction. Other areas of cooperation include development of rural infrastructures, renewable energy, community development, consolidation of democracy addressing some of the root causes of the conflict, such as socio-economic inequalities, promotion of human rights and the rule of law and trade development. The EC development assistance for the period 2002-2006 is Euro 70 million.

The European Union's Position on Maoist Insurgency in Nepal
The EU feels that the root cause of the Nepal conflict is a complex web of interacting factors including uneven development within the country.

However, the European Union upheld the government of Nepal's right to defend the country's newly established democracy in countering this terrorist insurgency. The European Union noted that the democratic State has the sole right to use legitimate force to preserve the rights and security of its citizens.

The EU urges Government of Nepal and the Maoists to seek a peaceful resolution of the conflict.

The EU strongly condemns systematic and continued human rights violations by the Maoists such as abduction of schools children and young and their indoctrination into their militia, extortion, killing of innocent civilian, destroying infrastructures, etc.

Visit of EU Troika delegation to Nepal
A first European Union (EU) Troika delegation visited Nepal from 13 to 15 December 2004. The delegation was headed by Mr. Robert Milders, Director for Asia and Oceania Department, Ministry of Foreign Affairs of the Netherlands. The EU Troika is made up of representatives from the current EU presidency, next EU presidency and representatives of European Commission and Council Secretariat.

The aim of the Troika was to offer EU support to all efforts aimed at promoting multi-party democracy - within the framework of a constitutional monarchy - and human rights as well as curtailing violence and renewing dialogue between Government of Nepal and the Maoists.

The second Troika delegation visited Nepal from 4 to 6 October 2005. The objective of the Troika visit was to assess the political situation of Nepal since the last visit, to take stock of the cease-fire announced by the Maoists, Government of Nepal's response to the unilateral cease-fire, revival of the peace process, etc.

Nepal-EU Trade
The EU is one of the principal trading partners of Nepal. The EU imports mainly handmade carpets, textile, gems and jewellery, wood and paper products, leather products, etc. from Nepal. Nepal imports engineering goods, telecommunication equipments, chemical and minerals, metals and steels, agricultural products, etc. from the EU countries. The EU has provided duty-free and quota-free facilities to the Nepalese export under its Everything But Arms (EAB) policy for the LDC's.

The EC agreed to prolong Nepal's derogation from GSP rules of origin for certain textile products for the period of two years (until 31/12/2006). Under the EU Everything But Arms (EBA) Scheme for LDCs, Nepal has been exporting sugar duty-free to EU countries since 2003. Annual sugar export from Nepal is approximately 9000 metric tonnes.

The EC will be introducing the new Generalised System of Preferences (GSP) in 2006 and will remain valid till 2015. For nearly 2100 products out of 11,000 except arms and ammunitions, duty rate will be zero. As the provisions of EBA Scheme for LDCs are incorporated into the new GSP, Nepal can greatly benefit from it.

EU Assistance to Bhutanese Refugees
The European Union is one of the major sponsors of the United Nations High Commissioner for Refugees' programme in the camps. The EU welcomed the prospect of a speedy verification process leading to the repatriation of refugees and the ultimate closing of the camps.

The EU has been helping Nepal in providing food aid to the Bhutanese Refugees and other assistance for their early repatriation. The EU has stated that it would continue to support refugees from Bhutan. Till now the EC has been among major donors to support the refugee camps via NGO?s and the UNHCR.

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