Nepal | July 12, 2020

Nepal seeks extension of GSP facility in EU

Himalayan News Service
Share Now:

Kathmandu, August 22

Nepal has appealed with the European Union to extend the generalised system of preference facility in exports to the European nations, as a support to the local economy to recover from the devastating earthquakes of last year, which was then followed by months-long border blockade.

From the beginning of 2017, the EU is planning to phase out the facility referred to as ‘GSP’, which was extended to the least developed countries (LDCs).

Citing the blow to Nepal’s economy due to the massive temblor and disruptions of supply lines due to the border blockade in the southern plains, the government has requested the EU for extension of the facility, according to Rajendra Singh, senior officer at the Trade and Export Promotion Centre.

Like Nepal, other LDCs have also been requesting the 28-nation bloc for the extension of the facility as they are incapable of strengthening their economy sans the facility due to various circumstances.

EU has been offering zero duty facility for products (except arms and ammunitions) manufactured in the LDCs during imports to the European market. The EU had adopted a reformed GSP law on October 31, 2012 which offered zero tariff facility to the LDCs to provide them level with playing field in the markets of developed countries. The developed countries offered this facility so that the industrial (production) base of the LDCs could be strengthened.

The European Commission submits its report on GSP every year in the European Parliament. The parliament’s approval is a must for the extension of the facility to LDCs. The share of preferential import in the European market is just around 12 per cent of its total import. Despite of the facility provided to the LDCs, preferential import has not surged significantly in the European market, as per the latest report submitted by the European Commission in the European Parliament.

As the rules came into effect from October 31, 2012, LDCs started enjoying the GSP facility from 2013. The total import of the European nations under the GSP facility stood at 5.87 billion euros or 11.8 per cent of the total import in 2013. The preferential import surged nominally in 2014 to 6.48 billion euros or 12.8 per cent of the total import, as per the report.

Data show that the LDCs have not been able to expand their exports despite huge potential in the European market because the GSP facility is provided only to the products of LDCs with 30 per cent value addition.

According to Singh, the criteria may be lowered to 25 per cent value addition for the products manufactured by LDCs if the facility is extended for another term. This would be in line with the commitment made by the developed countries to provide 25 per cent value addition criteria for LDCs to support them to uplift their economy during the 10th Ministerial Conference of the World Trade Organisation held in December of 2015.

LDCs believe that the European Parliament will allow the authorities to extend the facility to the LDCs as they are sustaining in weak export base. The United States had also renewed the GSP facility for LDCs in 2015, which had expired in July of 2013.

“Similar to other LDCs, Nepal has also not been able to expand its export base to the European market,” informed Binayak Shah, president of European Economic Chamber of Trade, Commerce and Industry.

Carpet, readymade garments and handicraft are the major export products of Nepal to the European Union.

A version of this article appears in print on August 23, 2016 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Death-toll from Myagdi landslide reaches 27; four still missing

POKHARA: As many as 27 persons, who went missing in the landslides that swept through Myagdi district, have been confirmed dead, until Saturday evening. Four persons are still missing. While bodies of 24 persons were recovered throughout Saturday, three bodies had been found on Friday. Accordi Read More...

Bollywood actor Abhay Deol feels nepotism is just tip of the iceberg, it's prevalent everywhere

KATHMANDU: Bollywood actor Abhay Deol feels that nepotism is prevalent everywhere including politics, business and films and it is just the tip of the iceberg. Abhay, who made Bollywood debut with Socha Na Tha under his uncle and actor Dharmendra Deol's Banner Vijayta Films, took to Instagram t Read More...

Five including four doctors arrested for illegal kidney transplantation in Chitwan

CHITWAN: Five persons have been arrested on the charge of facilitating illegal kidney transplantation in Chitwan. Four doctors from Chitwan College of Medical Sciences (Old Medical College) and an employee of District Administration Office have been taken into police custody. They were arreste Read More...

Amitabh Bachchan

Amitabh Bachchan tests positive for COVID-19

KATHMANDU: Indian actor Amitabh Bachchan has tested positive for the coronavirus infection. The senior Bollywood actor confirmed this through a tweet, on Saturday night. Taking to Twitter, he shared that he has tested positive for COVID-19 and has shifted to the hospital. Bachchan further s Read More...

Sterling scores hat-trick as City hit Brighton for five

BRIGHTON: Raheem Sterling struck a hat-trick as Manchester City crushed Brighton 5-0 at the AmEx Stadium in the Premier League on Saturday. Second-placed City had lost their previous three away games but never looked likely to extend that streak against a Brighton side that struggled fro Read More...

La Liga, Barcelona

Sloppy Barca grind out win over Valladolid to stay on Real's heels

VALLADOLID: Lionel Messi notched a 20th assist of the season to help a lacklustre Barcelona secure a 1-0 win away to Real Valladolid on Saturday, maintaining the pressure on La Liga leaders Real Madrid. Chilean midfielder Arturo Vidal struck the only goal of the game in the 15th minute, fir Read More...

NCP Standing Committee divided on one-on-one talks

Kathmandu, July 11 Ruling Nepal Communist Party (NCP) leader Asta Laxmi Shakya said Prime Minister KP Sharma Oli should have used his address to the nation yesterday to calm down youths protesting in the street in his support. “I was expecting the PM to say that our party had won people’s Read More...

Security Printing Bill registered in National Assembly stipulates reliable service

KATHMANDU, JULY 11 The Security Printing Bill registered by the Ministry of Communications and Information Technology in the National Assembly on July 8 stipulates the provision of a security printing centre. As per the bill, the centre shall be an autonomous body. The functions, duties and p Read More...