Nepal : Nepal wants US to be flexible on duty-free facility

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Nepal wants US to be flexible on duty-free facility

14
Jun '16

Nepal has requested the US to adopt further flexibility in the duty-free market access facility the country has offered to Nepali readymade garment products.

The request was made by a Nepali delegation in the US for the Joint Nepal-US Trade and Investment Framework (TIFA) Council meeting,

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.

Nepal's garment sector has been on a nosedive since 2005 after the US removed a quota system for its RMG products. In 2000-01, Nepal's garment exports reached an all-time high of Rs13.12 billion, with the US accounting for 86.49 per cent of the exports. But it slumped to Rs5.28 billion in fiscal 2014-15.

During a public hearing in Washington on the Act on June 10, the Nepali delegation which included representatives of the Garment Association of Nepal raised the concerns of Nepali garment manufacturers.

A member of the Nepali delegation 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. With the presidential election approaching, 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.

During the TIFA Council meeting, Nepal requested the US for technical assistance to help it 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.

According to a press release issued by the Nepali embassy, Nepali Commerce Secretary Naindra Prasad Upadhaya said the 66 items are not 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. (SH)

Fibre2Fashion News Desk – India

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