NEPAL, US sign TIFA
Kathmandu, APR 17 -
A new chapter began in the Nepal-United States trade relationship on Friday with the signing of the Trade and Investment Framework Agreement (TIFA). After a long homework, Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari and United States Trade Representative (USTR) Ron Kirk signed the agreement in Washington DC, thus opening the possibility of preferential entry of Nepali products to the United States, the world’s largest market.
The agreement has provided institutional framework for bilateral talks to enhance trade and investment, discuss trade issues and promote more comprehensive trade agreement between the two countries. TIFA will replace the Bilateral Economic and Trade Agreement between Nepal and the US reached in 1947. Nepal is the fourth South Asian country to enter into TIFA with the United States. The US has so far signed the TIFA with 42 countries, including South Asian—Afghanistan, Pakistan and Sri Lanka.
After sealing the deal, both governments announced the establishment of the Nepal-United States Council on Trade and Investment (TIFA Council). The council chaired by Commerce Secretary of Nepal and the Office of USTR would monitor trade and investment relations, identify opportunities for expanding trade and investment, along with capacity building and technical assistance. It has been agreed that the meeting of the council will be held once a year in Washington DC and Kathmandu on a rotational basis.
The first meeting of TIFA Council, which was held at the Office of USTR after the signing of the agreement on Friday, reviewed the Nepal-US economic and trade relations. The USTR side made a presentation of the best practices of TIFA regimes in some of the successful countries which could be replicated in Nepal. The Nepali side underlined the need for market access for Nepali products in the US markets, effective utilisation of GSP facilities and US investment promotion in Nepal. The Council has decided to hold its second meeting in Kathmandu in the second half of 2011. Commerce Secretary Purushottam Ojha led the Nepali delegation, while the US side was spearheaded by Deputy United States Trade Representative Demetrios Marantis.
After signing the agreement, Finance Minister Adhikari, who is also looking after the commerce ministry, expressed hope that the TIFA would come in handy in expanding bilateral trade and attracting US investments in Nepal.
“I am so pleased to be able to sign this TIFA with Nepal, so that the United States can enhance its trade and investment relationship with this important South Asian country. We now have an institutional framework for discussing trade and investment issues and learning more about each other’s legal, regulatory and trading regimes,” said Kirk. Though the TIFA opens the door for Nepal to expand trade with the US, experts say until the content is made public, one should not expect high.
“Without knowing the content, it’s too early to comment,” said Posh Raj Pandey, chairman of SAWTEE. “However, it’s a framework that could indicate how the economic relation between the two countries would move ahead in future.”
According to Pandey, the US’ interest is in the service sector, while Nepal’s is in goods. “If the TIFA content has stringent provision on Intellectual Property Right (IPR) than that of WTO, it will harm Nepal,” said Pandey.
Many may not know that the US is Nepal’s second largest export partner. It is one of a few trading partners with which Nepal has trade surplus. According to statistics of the US Census Bureau, Nepal exported goods worth $60.51 million to the US against the import of $28 million in 2010.
This agreement has brought some hope for the Nepali readymade garment sector. “After this agreement, now we have a forum to raise the issue of duty free access for Nepali readymade garments to the US markets,” said Udaya Raj Pandey, president of Garment Association of Nepal (GAN). “Nepal can now raise the issue of granting preferential access for some of the Nepali goods that include readymade garments and pashmina to the US market.”
Nepal recently applied for the Generalised System of Preference (GSP) facility for 11 readymade garment items and a pashmina item. The US reviews the GSP facility that provides duty-free entry for up to 4,800 products from 129 countries every ten years. “If we get the GSP facility, our garments would be 17 percent cheaper in the US market,” said Pandey. For Nepali readymade garments, the US used to be the largest market with the export touching Rs 10 billion mark in 2000.
After reaching $171.39 million mark in 2003, Nepal’s export to the US is on a continuous decline, plummeting to 60.51 million in 2010. This fall is mainly attributed to the readymade garments and pashmina that could not compete with other countries’ products.
Source : Kantipur
A new chapter began in the Nepal-United States trade relationship on Friday with the signing of the Trade and Investment Framework Agreement (TIFA). After a long homework, Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari and United States Trade Representative (USTR) Ron Kirk signed the agreement in Washington DC, thus opening the possibility of preferential entry of Nepali products to the United States, the world’s largest market.
The agreement has provided institutional framework for bilateral talks to enhance trade and investment, discuss trade issues and promote more comprehensive trade agreement between the two countries. TIFA will replace the Bilateral Economic and Trade Agreement between Nepal and the US reached in 1947. Nepal is the fourth South Asian country to enter into TIFA with the United States. The US has so far signed the TIFA with 42 countries, including South Asian—Afghanistan, Pakistan and Sri Lanka.
After sealing the deal, both governments announced the establishment of the Nepal-United States Council on Trade and Investment (TIFA Council). The council chaired by Commerce Secretary of Nepal and the Office of USTR would monitor trade and investment relations, identify opportunities for expanding trade and investment, along with capacity building and technical assistance. It has been agreed that the meeting of the council will be held once a year in Washington DC and Kathmandu on a rotational basis.
The first meeting of TIFA Council, which was held at the Office of USTR after the signing of the agreement on Friday, reviewed the Nepal-US economic and trade relations. The USTR side made a presentation of the best practices of TIFA regimes in some of the successful countries which could be replicated in Nepal. The Nepali side underlined the need for market access for Nepali products in the US markets, effective utilisation of GSP facilities and US investment promotion in Nepal. The Council has decided to hold its second meeting in Kathmandu in the second half of 2011. Commerce Secretary Purushottam Ojha led the Nepali delegation, while the US side was spearheaded by Deputy United States Trade Representative Demetrios Marantis.
After signing the agreement, Finance Minister Adhikari, who is also looking after the commerce ministry, expressed hope that the TIFA would come in handy in expanding bilateral trade and attracting US investments in Nepal.
“I am so pleased to be able to sign this TIFA with Nepal, so that the United States can enhance its trade and investment relationship with this important South Asian country. We now have an institutional framework for discussing trade and investment issues and learning more about each other’s legal, regulatory and trading regimes,” said Kirk. Though the TIFA opens the door for Nepal to expand trade with the US, experts say until the content is made public, one should not expect high.
“Without knowing the content, it’s too early to comment,” said Posh Raj Pandey, chairman of SAWTEE. “However, it’s a framework that could indicate how the economic relation between the two countries would move ahead in future.”
According to Pandey, the US’ interest is in the service sector, while Nepal’s is in goods. “If the TIFA content has stringent provision on Intellectual Property Right (IPR) than that of WTO, it will harm Nepal,” said Pandey.
Many may not know that the US is Nepal’s second largest export partner. It is one of a few trading partners with which Nepal has trade surplus. According to statistics of the US Census Bureau, Nepal exported goods worth $60.51 million to the US against the import of $28 million in 2010.
This agreement has brought some hope for the Nepali readymade garment sector. “After this agreement, now we have a forum to raise the issue of duty free access for Nepali readymade garments to the US markets,” said Udaya Raj Pandey, president of Garment Association of Nepal (GAN). “Nepal can now raise the issue of granting preferential access for some of the Nepali goods that include readymade garments and pashmina to the US market.”
Nepal recently applied for the Generalised System of Preference (GSP) facility for 11 readymade garment items and a pashmina item. The US reviews the GSP facility that provides duty-free entry for up to 4,800 products from 129 countries every ten years. “If we get the GSP facility, our garments would be 17 percent cheaper in the US market,” said Pandey. For Nepali readymade garments, the US used to be the largest market with the export touching Rs 10 billion mark in 2000.
After reaching $171.39 million mark in 2003, Nepal’s export to the US is on a continuous decline, plummeting to 60.51 million in 2010. This fall is mainly attributed to the readymade garments and pashmina that could not compete with other countries’ products.
Source : Kantipur
