KATHMANDU, Nov 21: The 5th meeting of the Nepal-US Trade and Investment Framework Agreement (TIFA) Council is scheduled to be held on December 12 in Kathmandu, which will take forward the issues of bilateral trade that have been under discussion.
Nepal signed the TIFA with the world’s largest economy on April 16, 2011. Under the provision, the two countries had agreed to hold the TIFA council meeting every year. Last time, the meeting was held in the US on November 13, 2018.
The American side had expressed its interest to conduct the 5th TIFA meeting by June this year. But it could not be carried out after it failed to respond to the Nepali side, expressing dissatisfaction over Foreign Investment and Technology Transfer Act that Nepal enacted before Nepal Investment Summit 2019, according to officials of the Ministry of Industry, Commerce and Supplies.
“The US side had expressed disagreement on the government move for not considering their involvement while drafting the act,” said a ministry source. The US has long been expressing its concern over the investment environment in Nepal to inject capital from American investors. “With the reason, they did not even reply to several letters forwarded by the ministry to fix the date for TIFA meeting.”
In almost every TIFA meeting, Nepal has been pushing to revise the lists of goods under duty free access that the US has been providing to Nepal. Through its Trade Preferences Act (TPA) in 2015, the US has been providing duty-free access to 77 Nepali products that have high potential in the world’s largest economy. Nepal has been offered the facility until 2025.
The goods include certain carpets and pashmina, headgear, shawls, scarves and travel items. However, traders have been complaining that the facility offered by the US is of the least use as the privileged basket of goods does not include the major export items in which Nepal has high comparative advantage.
One of the products that Nepal has been demanding duty-free access with the US is readymade garments. The US used to be the largest buyer of Nepali readymade garments till 2000. Shipments to the US began sliding from $171.39 million in 2003 after the US government stopped providing duty-free, quota-free market access to Nepali products. Last year, Nepal exported readymade garments worth Rs 4.18 billion.
Citing the demand of Nepali side, US officials during the fourth TIFA meeting had assured Nepal that Nepali readymade garments will be considered for the list. They had also expressed their interest to provide technical support to Nepal to promote production of the goods under TPA lists. “However, no progress is seen so far in the line,” the ministry source said.