Nepal to lobby for duty-free access to US

The government is sending a high-level delegation headed by the Chief Secretary to push for duty-free market access to the United States.

The delegation, which leaves in the third week of August, comprises of the Commerce Secretary, representatives from FNCCI and the Garment Association of Nepal including an official from the Trade and Export Promotion Center. They are scheduled to meet senior US trade officials and members of the US Congress.

“We will first attend a garment fair in Las Vegas on August 16 and 17, then fly to Washington DC for the talks,” said Commerce Secretary Purushottam Ojha. He said that the visit was more exploratory in nature, refusing to divulge details. Other sources told the Post that the visit was aimed at pushing for a duty-free facility for Nepali garments and to ask for major Nepali exports to be included in the list of exports that get the special facility the US had committed at the Hong Kong Ministerial of the World Trade Organization (WTO).

Under the commitment, the US had promised to provide duty-free facility on 97 percent of its total tariff lines to least developed countries. While the three percent tariff lines to be protected will still prevent 300 items from enjoying the facility, Nepal is trying to ensure that products of its export interest are listed in the list of 97 percent items.

Garment manufacturers have been pushing that readymade garments be included in the same list.

However, as such an inclusion would still leave Nepal disadvantaged compared to LDCs doing better in garment trade, officials said their preference was towards seeking the facility under a separate bilateral arrangement.

“We are still holding consultations on whether it'd be appropriate to seek special tariff preferences under a special bilateral arrangement,” said Ojha. “Readymade garment, being our largest exports, is definitely going to feature prominently in the talks. But we will not remain confined to it only,” said he.

Nepal has been seeking duty-free facility for readymade garments in the US, especially after the elimination of the quota system in global apparel trade hit Nepali exports badly. The US is the largest apparel market of the world and absorbs 80 percent of Nepal's garments exports.

Over the last five years, especially after the US extended duty-free facilities to readymade garments of the Caribbean and Sub-Saharan countries in 2002, Nepal's exports have plummeted by 80 percent.

While that has shrunk the industry to about a dozen units, some 80,000 people, half of them women, have lost their jobs, according to the Garment Association Nepal (GAN).

During the course, the industry that attracted an investment of Rs 9 billion from the private sector is estimated to have lost Rs 2 billion from the closures by the end of 2007.
Source: eKantipur