Kathmandu, January 21:

Minister for Industry Astalaxmi Shakya and Minister for Commerce and Supplies Rajendra Mahato will go to the United States to lobby for a duty free market for Nepali readymade garments (RMG).

Nepali garment export has been hit hard after the Multi-Fiber Agreement (MFA) ended on January 2005. The ministerial duo will lobby for easy access to the US market, said Prashant Pokhrel, president of GAN.

Until the MFA was on, the Nepali garment sector had heavily relied on the quota for the US market that consumed over 80 per cent of total garment exports. “Post-MFA, Nepal was left with no option but to compete with cheaper products from other countries,” he said, adding that though the ministers are going to visit US to seek duty-free market access, it would take some time.

Till 2008, Nepali RMG saw a great plunge in its export but 2009 might see more exports as situation cannot worsen more than this and the export environment may also improve, he added.

“We were confirmed about the quota phase-out during 2003 and MFA expired in 2005. Till 2003, the garment export business was fantastic. Now, compared to 2007 we have had a 45 per cent decline in export to the US,” said Pokhrel.

Prime Minister Pushpa Kamal Dahal ‘Prachanda’ and Minister for Foreign Affairs Upendra yadav — during their visits to the US — had also lobbyed for easy access of Nepali RMG in the US market. According to GAN, this time the US government seems more positive and has insisted on continuous to create a good environment for Nepali RMG there.

In 2008, the total value of Nepali RMG exported to the US was $13,609,071.77, a decline of 45 per cent as compared to 2007 when the total value of Nepali RMG exported was $24,812,146.55. Before the expiry of the MFA, the total value of Nepali RMG exported was $123,121,594.22 in 2003. It fell to $85716,568.04 in 2004 and further downed to $50,722,713.22 in 2005, the year that MFA expired. The year 2006 saw a total export of $47,775,183.21, according to GAN statistics.

The duty charge for Nepali RMG is about 18 per cent. With the formation of a new government in the US this January, GAN is hopeful of getting duty-free market access by February. if that happens, it will export RMG worth $15 crore in a year’s time and also generate employment for around 40,000 people. The employment5 opportunities also will increase with time.

“Currently, 8000 people are employed in the RMG sector,” said Pokhrel adding that the problems were many. “Aside from existing problems in the garment industry, we have infrastructure deterioration, lack fast-tracks and the load-shedding hours have worsened the situation,” said Pokhrel.