Nepal urges United States to adopt further flexibility

  • duty-free market access to Nepali garment products

Jun 12, 2016-

A Nepali delegation, which is currently in the US for the Joint Nepal-US Trade and Investment Framework (TIFA) Council meeting, requested the US to adopt further flexibility in the duty-free market access facility the country has offered to Nepali readymade garment products.

Although the US has offered the facility to 66 garment items under the Trade Facilitation and Trade Enforcement Act, Nepali garment manufacturers are disappointed that most of the items listed under the facility are not produced in Nepal.

After the quota system was removed in 2005, Nepali garment sector suffered the worst disaster because of the lack of competitiveness. In 2000-01, Nepal’s garment exports reached an all-time high of Rs13.12 billion, with the US accounting for 86.49 percent of the exports. But it slumped to Rs5.28 billion in fiscal 2014-15. 

During a public hearing in Washington on the Act on Thursday, the Nepali delegation raised the concerns of Nepali garment manufacturers. “Representatives of the Garment Association of Nepal also participated in bilateral meeting and they raised their concerns,” Kailash Raj Pokharel, economic consular at the Nepali embassy in the US told the Post over the phone.

A member of the Nepali team present in the meeting said the US side advised that Nepal utilise the available facility for greater benefit of the garment sector for now. “They were of the view that there remains the possibility of resistance in the US if the product list was extended,” said the Nepali delegation member. 

The US facility announced in December 2015, and effective from February, provides duty free market access to Nepal on selected garment products until December 2025. Given the new presidential election approaching near, the US officials were of the view that Nepal should wait for the new administration’s policy if any change is sought in the Act. 

The public hearing was organised under the theme of “Nepal: Advice Concerning Whether Certain Textile and Apparel Articles Are Import Sensitive”, in which Nepali officials and garment exporters made it clear that the 66 items don’t fall under the category of sensitive list of the US.

According to a press release issued by the Nepali embassy, Nepali Commerce Secretary Naindra Prasad Upadhaya said the 66 items are not, in any way, import sensitive and that they do not harm the US industries producing the similar items. Under the provisions of the federal law, the US International Trade Commission (USITC) is required to conduct an investigation to determine product eligibility. 

Meanwhile, during the TIFA Council meeting, Nepal requested the US for technical assistance to help Nepal further integrate into global value chains, address supply capacity constraints, and maximise its utilisation of US trade preferences.  

The US took note of this request and agreed to explore the possibility of extending trade capacity building support to Nepal, the joint statement released after the meeting read.

Commerce Minister Jayant Chand led the Nepali delegation, while United States Trade Representative Michael Froman headed the US talk team during the TIFA Council meeting.   

During the technical-level discussion, the two sides stressed on promoting investment in Nepal, facilitating the use of preferential market access for Nepali products in the US, customs and trade facilitation, intellectual property rights, sanitary and phyto-sanitary measures, food safety, standards and conformity assessment, services trade, and labour, according to the joint statement. 

Both the governments pledged their commitment to deepen their engagement in these issue areas over the coming months in order to make progress in advance of the 3rd TIFA Council Meeting, planned to be held in Nepal in 2017.


Published: 12-06-2016 08:47

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