"We will be taking Nepal government's input on what type of technical assistance it needs to stay competitive for longer time, even after the expiry of the trade preference program by the end of 2025," Deputy Assistant US Trade Representative for India and Nepal Dawn M Shackleford said.The Nepal program is authorized for ten years and is designed to help Nepal's economic recovery.
In addition to the duty-free tariff benefits from the trade preference program, there is also a trade capacity building program outlined in the legislation, focused on helping Nepal implement the World Trade Organization's (WTO) Trade Facilitation Agreement (TFA), she added. "Thus, the US is ready to assist Nepal in trade facilitation under its technical assistance (TA)," Shackleford told Republica without elaborating how much the assistance is worth.
Referring to her discussions with the Nepali authorities and private sector, she said that Nepal can take maximum advantage from the Trade Facilitation and Trade Enforcement Act. "Especially handicrafts can take advantage from the trade preference program," she added.
With a view to facilitating economic growth through trade, the US is establishing a new stand-alone trade preference program for Nepal. On February 24, President Obama signed the Trade Facilitation and Trade Enforcement Act of 2015. The Act allowed the President to authorize special tariff preferences for Nepal to help support the country's economic recovery following the devastating earthquakes of 2015.
Under the Act, the President will have the authority to grant duty-free tariff benefits for several products not currently eligible for benefits under existing trade agreements, including certain kinds of carpets, headgear, shawls and scarves, handbag, and suitcases. The exports of Nepali goods covered by the Act totaled $8 million in 2015.
However, she said that for the new preference program to go into effect, certain administrative steps need to be completed in the US. "First, the President must certify that Nepal meets the country criteria and eligibility requirements of the program which are the same as those for countries that participate in the GSP Program and the African Growth and Opportunity Act," Shackleford, who is currently in Nepal to finalize the date for second TIFA meeting, said, adding that it might take few months. "In the first phase, the US looks at status of rule of law, anti corruption measures and human rights violation, and in the second the US administration is also required to request a review by the US International Trade Commission of the products covered by the preference program to ensure that an increase in imports of these products into the US market will not negatively affect the US economy," she said. "These statutorily-required reviews will take several months to complete, but the administration is making efforts to complete the processes as soon as possible."
In 2015, total trade between Nepal and the US was worth $123 million. During the year, Nepal exported goods worth $87 million to the US. Of the exports, Nepal enjoyed access to duty-free treatment for eligible products under the Generalized System of Preferences (GSP) of approximately $5.8 million.
NEPAL NEEDS TO PUBLICIZE REFORMS
Deputy Assistant US Trade Representative for India and Nepal Dawn M Shackleford has said that Nepal needs to publicize its reform efforts to attract foreign investments.
"There are investment opportunities in Nepal, but the investors should be made aware of the opportunities it offer," she said, adding that foreign investors should know what reforms have Nepal made to ease doing business in Nepal. "Based on the new Trade Policy and comparative advantage in growing ICT, tourism and service sector, Nepal should exploit its opportunity," she added.
Related story
USAID launches Trade and Competitiveness Activity to improve co...
