USA urged to continue trade preference scheme

 Kathmandu, May 19

Nepal has urged the United States of America to continue with the Nepal Trade Preference Programme (NTPP), that allows duty-free entry of 77 items from here into the USA, beyond 2025 in order to support in its transition from the LDC graduation.

The country made such request to the USA at Sixth Nepal-USA TIFA Council Meeting held in Kathmandu on Friday. Nepal is graduating to the 'Developing Country' status from the Least Developed Country in 2026 which is likely to result in the loss of the trade facilities that the country is getting in the developed nations.

The two countries have signed the Trade and Investment Framework Agreement (TIFA) in 2011. The 5^th Nepal-US TIFA Council meeting was held on Dec 15, 2020 virtually amidst the fears of raging COVID-19 pandemic.

Speaking at the inaugural of the meeting, delegations of both the countries stressed on the need to further explore the investment, trade and other economic opportunities.

 

A milestone agreement

Minister for Industry, Commerce and Supplies, Ramesh Rijal, termed the TIFA a milestone agreement for expanding and deepening trade and investment relations between the two countries as well as bringing their relations to a new height.

He pledged the government's commitment to implement the agreement reached by the meeting between the two countries. "I see ample opportunities under the TIFA umbrella for the benefits of both sides if we regularly engaged on the issues and agenda that are of our interest. As Nepal is set to graduate from the LDC's status by 2026, our engagement through TIFA is further critical and important," said Minister Rijal.

Expressing gratitude to the USA for the facility of duty-free market access to 77 Nepali items in the US, he maintained although some of Nepali key export items where it has comparative advantage still remain outside of the US preference basket. He requested the US to consider Nepla's additional competitive products gradually into its preference basket.

 

Focus on trade preference

Madhu Kumar Marasini, Secretary of the Ministry of Industry, Commerce and Supplies (MoICS), said that the USA is one of the important trading partners and second largest export destination of Nepal. Nepal's 11.32 per cent of the total export goes to the US. However, Nepal witnessed trade deficit of 1:2 with it.

The sixth Nepal-US TIFA Council meeting was focused on Nepal trade preference programme and technical assistance, policies impacting the investment climate, intellectual property, digital economy, agricultural trade, market access and technical barriers to trade, World Trade Organisation issues and LDC Graduation of Nepal, informed Marasini.

"We need to ensure that our graduation from the LDC to a developing nation is smooth, sustainable and irreversible. For that we need investment technology support and economic partnership in the transition strategy," he said.

 

US accords priority to Nepal

Brendan Lynch, Acting Assistant US Trade Representative for South and Central Asia, said that reforms in trade and investment relations are necessary so that it could benefit the people of both the countries. "Nepal Trade Preference Programme (NTPP) is the only country specific prgramme that the US has kept in operation, it shows the kind of relations between the two countries," he said.

According to him, economic relations between the two nations are growing which needs to be further cemented through enhanced trade and investment engagements.

Prof. Shridhar Khatri, Nepal's Ambassador to the USA, said that the dialogue between Nepal and the USA is based on conflict-free relations.

He expressed worries over Nepal's failure to take advantage of the initiative like NTPP since the country lacked the capacity to produce the goods in a competitive ways.

"This suggests that there has been a low take off despite good intention, less than 3 per cent of Nepal's export to the USA is covered by the NTPP," said Prof. Khatri while urging the USA to make course correction by renewing the programme in 2025 as well.

 

US envoy wants more economic engagements

Donald Thompson, Ambassador of the USA to Nepal, stated that he wanted to see more American companies, investors and high quality goods to come to Nepal.

"Attracting foreign investment requires good investment policies and environment and private sector support as well. I am happy to see a working collaboration between the government and private sector in terms of policy and programmes in Nepal," he said.

According to him, this is the largest TIFA delegation from the USA ever. It shows the importance that the USA accords to Nepal's trade and development. 

Published in Friday Supplement of The Rising Nepal Daily on 20 May 2023.