Officials at the Ministry of Commerce and Supplies said they had invited Deputy US Trade Representative Demetrios Marantis for signing the agreement a few months ago. “But we have not got any response to this connection,” an official at the Ministry said. [break]
Nepali Ambassador to the US Dr Shankar Sharma, meanwhile, disclosed to Republica that the US government was waiting for the formation of a new government in Nepal to ink the deal.
“The agreement is already finalized and the USTR office too is eager to complete the signing formalities. However, it has stayed the process because it wants the country to have the new government in place for signing,” Dr Sharma said over phone.
Once signed, TIFA is scheduled to replace bilateral Economic and Trade Agreement (ETA) that Nepal and the US signed in 1947. This will pave way for preferential facilities for Nepali exports in the US, as TIFA has, among others, provisions that facilitate Nepal to gain favorable market access in the US.
It recognizes the difference in economic and trading status between Nepal and US and commits to reduce tariff and non-tariff trade barriers.
However, the accord, being the framework agreement, does not make specific promises.
The agreement has seven articles related to trade, investment and technical assistance. It provisions establishment of commerce secretary-level Nepal-US Council on Trade and Investment (NSCTI) as a permanent mechanism that will meet at least once a year to work out means and ways to expand trade and investment.
The council is envisaged to serve as a forum for negotiation, monitor trade and investment relations, identify opportunities for expanding trade and investment, and sort out concerns and constraints related to trade and investment.
TIFA also incorporates US readiness to pledge technical assistance to Nepal for raising the country´s capacity to widen commodity base and increase exports. Under the agreement, US has expressed eagerness to support Nepal in product development and also extend assistance to build trade related infrastructure. Increasing US investment and transfer of technology is another crucial component of TIFA.
US is the third biggest market of Nepali commodities, after India and the European Union. However, the economic activities between the two countries had eroded sharply in recent years due to change in global trading regime and conflict and political transition in Nepal.
Nepal has received only nominal investment from US and its major exports like readymade garment have also collapsed over the years. As a result, bilateral trade between Nepal and the US stands very nominal with Nepal enjoying trade surplus of Rs 180 million.
Recognizing the weak business linkages between private sector players, despite decade-long trade ties between the two countries, TIFA envisages encouraging and facilitating contacts between enterprises and other private sector groups in each other territories.
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