Nepal-US hold second TIFA council meeting
Washington D.C.: The second U.S.-Nepal Trade and Investment Framework (TIFA) Council
Meeting has affirmed that the bilateral trade and investment relationship has great potential and could be realized through adoption of enabling policies.
The meeting was co-chaired by United States Trade Representative Michael Froman and Nepali Minister of Commerce Jayant Chand.
The two governments candidly expressed their interest in strengthening bilateral trade and investment in a manner that promotes economic growth and job creation in Nepal and the United States.
Ambassador Froman welcomed Nepal’s 2015 Trade Policy that outlines market-oriented reforms to help Nepal better integrate into global production networks, move up the value chain, and increase its competitiveness in goods and services. Minister Chand highlighted Nepal’s work on a Trade Integration Strategy that would help Nepal overcome competitiveness challenges by building capacity for trade, facilitating transport, improve technical regulations and promote trade in services.
The United States agreed to exchange information to support Nepal’s on-going efforts of developing laws and regulations to promote trade.
Nepal requested technical assistance to help Nepal further integrate into global value chains, address supply capacity constraints, and maximize its utilization of U.S. trade preferences. The United States took note of this request and agreed to explore the possibility of extending trade capacity building support to Nepal.
During the meeting, the United States and Nepal discussed the implementation of Section 915 of the Trade Facilitation and Trade Enforcement Act, which provides for non-reciprocal preferential trade benefits for Nepal through December 31, 2025, for certain U.S. imports from Nepal that meet specific eligibility criteria. The program is intended to help Nepal overcome the severe challenges in achieving economic recovery in the wake of the April 2015 earthquake.
The Trade and Investment Framework Agreement (TIFA) Between the government of Nepal and the United States of America entered into force on 15 April 2011. One of its main objectives is to expand trade, investment and technical cooperation and to strengthen economic relations between the parties. Nepal, a land-locked least developed country, also benefits from the United States Generalized System of Preferences which provides preferential access to the market of the United States for up to 5,000 tariff lines duty free. Nepal and the United States had $123 million in total (two way) goods trade during 2015.
In another development, Secretary Naindra Prasad Upadhaya, Ministry of Commerce, Nepali Ambassador to US. Arjun Kumar Karki, Ambassador of Nepal to the United States of America presented their testimony earlier to the U.S. International Trade Commission (USITC) at a public hearing in response to Investigation No. 332-558, Nepal: Advice Concerning WhetherCertain Textile and Apparel Articles Are Import Sensitive.
Responding to the queries from a panel from the U.S. International Trade Commission, Secretary Upadhaya stated that the 66 items as outlined in the Trade Facilitation and Trade Enforcement Act are not, in any way, import sensitive and that they do not harm the U.S.
industries producing the similar items. Ambassador Karki conveyed the importance of these preferences in the context of rebuilding Nepal in the aftermath of devastating earthquake in April 2015. Dr. Karki argued that this helps the U.S. International Trade Commission to understand the realistic time frame, but vitally critical growth in U.S. imports that the trade preferences will create. The hearing was requested by the U.S. Trade Representative (USTR) to ensure that the 66 articles eligible for preferential treatment will not negatively impact the U.S. economy.
U.S. President Barack Obama signed the The Trade Facilitation and Trade Enforcement Act of 2015 on February 24, 2016, which includes Nepal as Trade Preferential Country . The law provides duty free access to 66 items for ten years if Nepal fulfills country and product eligibility.
Under the provisions of the federal law, the USITC was required to conduct an investigation to determine product eligibility. The USITC Commissioners will submit a confidential report to the USTR in September. A public version of the report will contain unclassified information and be available shortly after. President Barack Obama will determine Nepal’s eligibility for the preference program upon advice from the USITC and USTR.
Honorary consulate of Nepal for United States Rishi Punakhar Dhakal expressed his hope that the US government’s decision to include Nepal for Trade Preference by exempting tariff in sixty six Nepali products would offer a great opportunity to Nepali economy.
Dhakal said that Nepali garment industry could see a historic boost if the country could make use of this preference provided by the United States. “I am glad that Nepal remains in the top priority among other developing countries in the world who are also asking for the same treatment from the Americans,” he said.
Dhakal’s company, ‘Rising International’ has been honored with “CYP” award by Nepal government for being the top exporter of Nepali goods to the international markets.