Nepal European Union Relations

Diplomatic Relations:

Nepal formally tied diplomatic relations with the then EC in 1974. Development cooperation with European Community started from 1973. EC opened its Technical Office at Kathmandu in 1992. Nepal established residential Embassy in Brussels. The European Commission opened its Delegation to Nepal after the agreement to this effect was signed on 13 March 2002 in Kathmandu. European Union (EU) Delegation office has been upgraded to the Ambassadorial level since 2009 December.

The Embassy of Nepal, Brussels is also the Mission of Nepal to the European Union, and Delegation of the European Union to Nepal, Kathmandu looks after EU affairs in Nepal.

Nepal-EU relations have remained friendly, cordial and cooperative based on mutual understanding, support and cooperation in the fields of economy, trade, humanitarian and development issues. The EU has been a valuable development partner of Nepal since 1973. Several EU member countries are longstanding development partners with Nepal. There has been a regular exchange of visits between the officials of Nepal and the EU.

The European Commission has also involved itself in partnering with regional bodies, namely the SAARC and ICIMOD. The EU was granted the observer status in SAARC since 2007.

High-Level Visits/Meetings:

  • Pradeep Kumar Gyawali, Minister for Foreign Affairs held a telephone conversation with the High Representative for Foreign and Security Policy of EU/Vice President of European Commission H. E. Josep Borrell on 09 June 2020. Issues relating to Nepal-EU relations and cooperation, particularly in the context of the COVID 19, were discussed during the call.
  • Pradeep Kumar Gyawali, Minister for Foreign Affairs met H.E. Ms. Federica Mogherini, Vice President of the European Commission and High Representative for Foreign Affairs and Security Policy in Brussels on 18 September 2018.
  • E. Ms. Paola Pampaloni, Deputy Managing Director for Asia and Pacific of the External Affairs Action Service, visited Nepal in March 2019 to inaugurate the new office premises of the Delegation of the European Union to Nepal.
  • Pampaloni also visited Nepal in November 2019 for the 11th Nepal-EU Joint Commission meeting held in Kathmandu. Foreign Secretary co-chaired the Joint Commission from Nepal’s side.
  • In October 2014 EU Development Commissioner Mr. Andris Piebalgs visited Nepal.

 Joint Consultation Mechanism:

The EU- Nepal Cooperation Agreement signed in 1996 created bi-annual Joint Commission between Nepal and EU, which was made annual since the 10th Joint Commission meeting between Nepal and EU in 2018. Within this cooperation framework, Nepal-EU Joint Commission meetings take place between the EU and the Government of Nepal now on annual basis.

The 11th Meeting of the Nepal-EU Joint Commission was held in Kathmandu on 8 November 2019 exchanging substantive views on the latest political situation in Nepal and EU, development cooperation, Nepal’s graduation from LDCs, air safety issues and also discussing various ways and means to further strengthen the relationship between the EU and Nepal.

Development Cooperation:

The EU- including the EU delegation and the EU member states – has been the biggest provider of development aid to Nepal recently. EU assistance to Nepal is provided in two main ways: on a bilateral basis through the formulation of successive Country Strategy Papers (CSP) in close partnership with the Government of Nepal and on a multilateral basis including all actions outside the CSP mainly funded through thematic budget lines. CSP 2007-2013 focused on education; peace building, public financial management and trade capacity enhancement. The EU was also a major donor of the Nepal Peace Trust Fund.

Starting from 2014, the EU began Multi-Annual Indicative Programme (MIP) for 2014-2020. Nepal and the EU signed the Multi-annual Indicative Programme (MIP) 2014-2020 in Kathmandu in October 2014 during the visit of EU Development Commissioner Mr. Andris Piebalgs to Nepal. The MIP 2014-2020 focuses on three key sectors: (I) Sustainable Rural Development, (2) Education Sectorand (3) Strengthening Democracy and Decentralization Sector.

Some Nepali students and scholars are benefitting from the EU funded Erasmus Mundus Programme.

 Trade Relations:

The EU as a bloc is one of the principal trading partners of Nepal. The EU countries import 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. Given below is a glimpse of trade with the EU region as a whole of past few years:

Year Import (in euro) Export (in euro) Trade balance
2015 272 million 99 million -173 million
2016 137 million 96 million -41 million
2017 285 million 95 million -190 million
2018 456 million 86 million -370 million
2019 109 million 28 million -81 million

Everything but Arms (EBA) trade preference: In accordance to the Generalized System of Preference (GSP), which is a preferential tariff system that allows for the exemption to member countries from the Most Favoured Nation Treatment (MFN) of WTO rules, the EU has provided duty-free and quota-free facilities to all products from LDC’s except Arms under its Everything But Arms (EBA) policy for the LDCs from 2001. Under this supplementary preference program, the EU EBA Scheme for LDCs, Nepal exported sugar duty-free to EU countries since 2003.

After the entry into force of the new reformed GSP from 1 January 2014, the benefits and preferences provided to the LDC’s under the EBA is now available to the LDC’s under this new GSP.

Already, an agreement towards providing Euro six million assistance to the Government of Nepal for strengthening Nepal’s competitiveness in trade sector was signed in Kathmandu in June 2014.

 Europe and the Americas Division

Ministry of Foreign Affairs

July 2020