Kathmandu, March 16

Nepal will be able to utilise the new facility extended by the US government through an exclusive law by August this year. The US government has extended duty-free market access for 66 Nepali products that include carpets, headgears, shawls and scarves, handbags and suitcases, among others, for the next 10 years.

The US Congress endorsed the ‘Trade Facilitation and Trade Enforcement Act’ in December to help the Nepali economy, which was shattered by the earthquakes of April and May last year. On February 24, US President Barack Obama signed the Trade Facilitation and Trade Enforcement Act of 2015 into law, but there are some procedural stipulations that need to be completed by the administration to bring the law into effect.

“The administration now has to complete some procedural stipulations but it will be completed within this summer,” said Dawn M Shackleford, deputy assistant US Trade Representative for India and Nepal.

There are crucial procedural steps ahead to bring the law into effect. The US President must certify that Nepal meets the country eligibility requirements of the programme which are the same as those for countries that participate in the Generalised System of Preferences (GSP) programme and the African Growth and Opportunity Act (AGOA). Nepal is already eligible for GSP programme of the US government but the country must meet the eligibility criteria under

the AGOA that includes rule of law, anti-corruption, and human rights protection.

Similarly, the second process is products eligibility. The administration has to seek report reviewed by the US International Trade Commission (ITC) of the products covered by the preference programme to ensure that an increase in imports of these products into the US market will not negatively affect its economy, according to Shackleford.

“The US ITC will conduct the study on impacts on consumers, companies and overall impact in the US economy.”

After these procedural steps are concluded, the President has to issue proclamation to update harmonised tariff schedule of the US so that the 66 products that have been granted the facility can be imported at zero tariff from Nepal. The products which have received preferential facility should have minimum of 35 per cent value addition.

In 2015, trade between Nepal and the United States stood at $123 million. During this time, Nepal exported goods worth $87 million to the US. Of these exports, Nepal enjoyed access to duty-free treatment for eligible products worth approximately $5.8 million under the GSP programme.

With a view to facilitating economic growth through trade, the US is establishing a new stand-alone trade preference programme for Nepal.

Apart from that, the US government will also support trade facilities based on the demand of Nepal

government.

During the talks with government officials here, Shackleford found Nepal to be interested in mobilising US support for establishing labs and accreditation centres. The country has been facing raft of challenges in export of agricultural goods and animal products because the sanitary and phytosanitary measures are considered to be the major barriers for the trade of agro products.

Likewise, Nepal intends to seek support for the capacity enhancement of government officials to develop trade negotiation skills and cooperation on patent, trademark, and industrial designs for promoting Nepali goods in the international market.

Shackleford arrived in Nepal on Friday for the preparatory meeting of Trade and Investment Framework Agreement (TIFA) council. Nepal and the US had signed TIFA on April 15, 2011. While signing TIFA, the two countries had agreed to hold the council meeting at least once a year to ensure effectiveness of the bilateral agreement. However, the meeting has not been held since five years.

The TIFA council meeting is jointly chaired by the secretary at the Ministry of Commerce and the United States Trade Representative (USTR). The very first meeting of the council was held in the US after signing of TIFA. Shackleford informed that next meeting of TIFA will be held within August this year either in the US or in Nepal as per the convenience of both sides.