The government has formed a team, led by Iswori Ghimire, executive director of Trade and Export Promotion Center (TEPC), to suggest products to be included in the list. The team also includes representatives from the private sector.[break]
“The US has requested us to revisit the list of products for existing GSP and sought the list of products for which we want the facility,” Jiba Raj Koirala, joint secretary at the Ministry of Commerce and Supplies, said. “We have sped up the process to finalize the list which is to be sent to the US government by October 4.”
Few years ago, Nepal had requested to the US government to provide GSP facility for 11 Readymade Garments (RMGs) and pashmina products.
Nepal´s RMG exports have been falling ever since the US government ended the Duty Free-Quota-Free facility in 2005. Nepali hand-knitted carpet is getting limited access to the US market thanks to comparatively liberal customs duty compared to that for RMG and pashmina products.
“We have to study the products and customs duty imposed by the US government on products before finalizing the GSP list,” Uday Raj Pandey, president of Garment Association Nepal (GAN), said.
According to Pandey, US has been imposing an average of 17 percent customs duty on Nepali RMGs and pashmina products. This has weakened the competitiveness of Nepali products in the US market compared to the products from other countries that are enjoying GSP facility.
The legal authorization of GSP program expired on July 31, 2013. However, the US Congress is considering a legislation that would extend the authorization of GSP.
The GSP is a program designed to promote economic growth in the 127 countries of developing world by providing preferential duty-free entry for up to 5,000 products. US imported products worth US$ 19.9billion under the GSP program in 2012.
According to a study commissioned by US Chamber of Commerce in 2005, over 80,000 American jobs are associated with moving GSP imports from the docks to farmers and manufacturers.
Products eligible for duty-free treatment under GSP includes manufactured items like different types of chemicals, minerals and building stone; jewelry; carpets; and some agricultural and fishery products. Similarly, some textiles and apparel products, watches, footwear, handbags and luggage products are among the goods that are not eligible for duty-free treatment under GSP.
Meanwhile, the MoCS has started preparation to host Nepal-US trade talks under Trade and Investment Framework Agreement (TIFA).
The crucial bilateral talks has been pending for the last three years since the bilateral agreement was signed in Washington on April 16, 2010, setting up a bilateral forum for trade dialogue.
“We are in regular contacts with the US officials and following up for the talk,” said Koirala. He, however, said the date for the meeting has yet to be fixed.
The pact envisages holding bilateral talks through the Nepal and the US Council on Trade and Investment (NSCTI) -- the commerce secretary level permanent mechanism -- once a year to look for ways to boost bilateral trade.
Data compiled by TEPC shows Nepal´s total exports to the US declined by 7.9 percent to Rs 4.97 billion. Imports also fell marginally by 0.5 percent to Rs 4.56 billion during the first eleven months of the fiscal year 2012/13.
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