Zero tariff facility extended by US gets nod from WTO

Kathmandu, March 22

As the zero duty facility extended by the United States (US) on 66 Nepali goods is all set to come into force following the approval from the General Council of World Trade Organisation (WTO), traders have urged the government to obtain technical support from the US government in economising the cost of production and transport.

Speaking during an interaction programme titled ‘Nepal-US Trade, Investment and Export Promotion’ organised by the Ministry of Commerce, Kiran Prakash Sakha, president of Nepal-USA Chamber of Commerce and Industry, said that the Trade Facilitation and Trade Enforcement Act, under which the US government is going to extend the zero tariff facility, also has a provision to support Nepal in trade capacity enhancement.

According to Sakha, lowering cost of transport and production is fundamental to capitalise on the facility being extended by the world’s largest economy.

“Lowering cost of production and transport not only incentivises producers and exporters but also attracts foreign investment in garment and its ancillary industries,” said Sakha.

Through technical support of the US government under the aforesaid scheme, the government needs to carry out research on how the cost of production and transport could be reduced and based on the outcomes of the research the required interventions need to be made by both the government and private sector, he further said.

In the programme, Commerce Secretary Naindra Prasad Upadhyay said that Nepal has to make sure that the facility being provided by the US will benefit the economy as it has been extended to help the country recoup from the devastating earthquake of April 25, 2015, that shattered the Nepali economy.

He assured the traders that Nepal will also discuss mobilising technical support of the US government in trade capacity building during the forthcoming meeting of Trade and Investment Framework Agreement (TIFA) Council, which is slated for April 20, in Kathmandu.

Development of international standard laboratories, negotiating skill enhancement, execution of WTO’s Trade Facilitation Agreement (TFA) have been planned under the technical support of the US government, according to officials.

A majority of apparel entrepreneurs have highlighted that the high cost of production is responsible for the weak production base of the country. To enhance productive capacity and expand export base, they have sought an end to strikes and political extortion. They also emphasised on subsidised interest rate on credit, regular and reliable supply of power, friendly labour laws, and robust infrastructure — roads and railways — to minimise transportation cost along with reduction in tariff on import of finished products and raw materials. Traders also sought export incentive for export-oriented industries.

Also speaking during the interaction, Tej Singh Bista, officiating executive director of Trade and Export Promotion Centre, suggested the traders to explore products with high export potential in the US market.

According to him, some of the potential export items to the US market in which Nepal has competitive advantage are tea, ginger and medicinal plants as the US is the second-largest importer of these goods in the world.