The agreement to this effect was reached here on Tuesday when a Nepali trade delegation led by Commerce Secretary Purushottam Ojha held talks with senior US Trade Representative (USTR) officials. [break]
TIFA has provisions that will facilitate Nepal to gain favorable market access in the US. "The US has agreed to sign TIFA on our terms. The agreement will be signed once we complete necessary legal procedures," Ojha told myrepublica.com.
The new agreement has seven articles related with trade, investment and technical assistance. Among others, it provisions constitution of secretary-level Trade and Investment Council (TIC) to regularly discuss on issues related to bilateral trade and investment.
The second article of the agreement deals with reduction and elimination of tariff and non-tariff barriers to trade. It promises to facilitate trade, ease market access for Nepali commodities in US and also incorporates US readiness to pledge technical assistance to Nepal for raising the country´s capacity to widen commodity base and increase exports.
Increasing US investment to Nepal is another crucial component of TIFA. Provisions on protection of intellectual property rights and technical assistance too are incorporated in TIFA.
- Trade and Investment Council to be formed
- US agrees to address Nepal´s tariff and non-tariff concerns
- US okays technical assistance to boost trade
- FNCCI, US Chamber to meet twice in 2010
- Nepal eyes US investment for hydropower development
"TIFA will be mutually beneficial. It will help Nepal lure US investments and also facilitate the US investors because they wish to establish their presence in every potential area," said Dr Shankar Sharma, Nepalis ambassador to the US.
On Tuesday, the Nepali team had held preliminary talks with Deputy US Trade Representative Demetrios Marantis. The team then held article-wise talks with Assistant Trade Representative Michael J Delani and South Asian Trade Director Adina Adler on TIFA. The agreement was finalized after two rounds of talks.
The two sides have agreed to sign the agreement after getting nod from Ministry of Foreign Affairs and Ministry of Law. The signing will be held in Nepal, most probably within two months.
US is the third biggest market of Nepali commodities, after India and EU. However, 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.
The private sector representatives in the delegation have welcomed the new development. "As TIFA provisions formation of a strong mechanism for the two sides to work on key issues, it can truly facilitate trade and investment between the two countries," said Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
Joshi said FNCCI will hold two meetings with US Chamber of Commerce (USCC) in 2010 in a bid to attract US investors to Nepal. The New Delhi-based USCC and FNCCI will coordinate to hold the meetings during which Nepal will focus at inviting US investment in hydropower sector among others.
The Nepali delegation is further scheduled to interact with USCC officials on Wednesday.
´Duty-free on garment not possible´
Senior US Trade officials on Tuesday termed the chances of Nepal getting zero-tariff facility on readymade garment as something ´not possible´.
During the bilateral talks, the Nepali trade delegation had pushed for the facility with the senior USTR officials, especially referring to the current political transition when the country was not getting enough investment to create new jobs.
However, USTR officials ruled out immediate chances of getting such a facility. Instead they suggested Nepal to diversify trade and take benefits of zero-tariff facilities it has pledged on other products under generalized system of preference (GSP).
Under GSP, Nepal enjoys duty-free market access for 1,500 commodities. However, owing to non-tariff and other barriers, Nepali exporters have been managing to tap the benefit only for handicraft items.
During the talks, the US officials said Nepal can effectively raise its exports to the US through new products like tea, coffee and bamboo and wooden furniture items. Nepali side, nonetheless, sought special tariff preferences for indigenous Nepali commodities like pashmina.
Related story
Cooperation for trade
