GAN roots for new TIFA clauses

KATHMANDU: Garment Association Nepal (GAN) has urged the

government to add two more clauses in the Trade and Investment Framework Agreement (TIFA) draft that Nepal will sign with the US.

The US had sent a TIFA draft proposal to Nepal but experts here opined that the proposed TIFA draft should mention preferential market access and

reducing tariff, each of which is a key factor for Nepali exports, especially the garment sector.

According to Uday Raj Pandey, first vice-president of GAN, the TIFA draft should include two clauses - reduction of tariff barrier and easy market access. Only if the draft mentions these two clauses can the garment get benefit from the bilateral trade agreement. Pandey added that after TIFA they will try to have a Free Trade Agreement (FTA) and that it should be on the basis of Relax Certificate of Origin (CoO). “The government should negotiate to get FTA with relax CoO as under Yarn Forward Certificate we will not have any benefit from TIFA,” said Pandey.

A delegation is going to visit the US on April 2 for the finalisation of TIFA. Experts here are hopeful that the Trade and Investment Framework Agreement between Nepal and the US will create a platform for FTA with the US. Pandey said that with the bilateral free trade agreement Nepal will get duty free access for garment, pashmina and terry towels. The US is also granting duty free access to other products.

Highligting the present scenario of the garment industry, Pandey said, “Whatever minimum orders we are getting, we are unable to supply them timely due to factors like labour unrest, power cuts and strikes.”

He pointed out that even if they get orders they are not able to deliver for two to three months and added that the garment sector

is also suffering from the lack of facilities like bank loans. According to him, banks are not granting new loans and this is affecting the productive sectors.

“There is hardly any enthusiasm left in the garment sector. We are working for just survival, goodwill and personal relations,” said Pandey.

According to recent GAN statistics, garment worth $889,847 was exported

in January. Nepali RMG

export to US was worth $706,964 during the same period last year.

Meanwhile, garment export to the US has dropped by over three times as it was only worth $4.91 million in 2009 as against $13.6 million in 2008.