Nepal to apply for duty-free access for 10 more products
KATHMANDU, AUG 26 -
Following the expiry of the US Generalized System of Preferences (GSP), the government is planning to apply for similar duty-free access for around 10 more products having competitive advantage along with those that previously enjoyed the facility.
The Trade and Export Promotion Centre (TEPC), which has prepared a draft of the proposal, has recommended that textile, garment, silver jewellery and handicraft, pashmina, agro products like tea, coffee, cardamom and fruits, herbs and handmade paper be included for the facility.
Under the GSP system, designed to promote economic growth in the least developed countries (LDCs), Nepali products received duty-free access to the US market. The programme, which was launched in 1979, expired on July 31, 2013. Following its expiry, the US government asked beneficiary countries to apply for duty-free treatment by Oct 4 this year.
The Ministry of Commerce and Supplies (MoCS) has been putting together a list of products having higher competitive advantage and value addition to apply for the facility. The ministry has asked the TEPC to recommend the products 15 days ago. The TEPC submitted a proposed list of 10 products on Sunday.
“The products in the list are only recommendations made by the TEPC, and the ministry will now study their relevance and the extent of benefit the country will receive if the products receive the same facility that existed under the GSP mechanism,” said Abha Shrestha, under secretary at the ministry.
She added that the ministry would also have to prepare a detailed proposal about the products including the products’ harmonize code, the country’s potential to produce and export the items and the amount of benefit the country will receive from the export of those items to the US.
Tarka Raj Bhatta, section officer at the MoCS, said the ministry would hold discussions with the stakeholders including the line ministries and the private sector before finalizing the products for which the GSP facility will be requested. Ministry officials said that though the GSP facility covered 5,000 items from 127 countries, the list included only 5 percent of Nepali products including Nepali flags, Nepali cap, cigar and scarf, among others, of the total items exported to the US.
Trade expert Ratnakar Adhikary said Nepal had never benefited from the GSP as the facility did not cover local products having more comparative and competitive advantage including textile and garment. “The facility will make no difference to us until the government ensures inclusion of products having more value addition,” he said.
MoCS officials, however, said the ministry would conduct a thorough studies and discussions while proposing the products for the facility so as to ensure the maximum benefit. “Once the products are finalized, they have to be approved by the minister before being submitted to the United States Trade Representative (USTR),” added Bhatta.
Pushpa Man Shrestha, president of the Nepal Pashmina Industries Association (NPIA), said despite the US being one of the major market destinations for local pashmina products, the duty being imposed by the US has limited prospects of higher exports to the world’s largest economy. “The US will be the largest market for pashmina if the product is chosen for the GSP facility,” he said. The US levies 15-18 percent customs duty on Nepali pashmina, he added.
As per the Trade and Export Promotion Centre (TEPC), the country exported goods worth Rs 5.40 billion during the first 11 months of the fiscal year 2011-12. During the same period in the last fiscal year, shipments declined 7.9 percent to Rs 4.97 billion.
Source: The Kathmandu Post
