US President Obama signs Nepal trade preferences bill

Exporters ask government to update labor laws, provide uninterrupted power

KATHMANDU, Feb 26: United States Barack Obama Wednesday signed a legislation that provides some Nepali products duty-free access to the American market.
According to a statement posted on the website of the US embassy in Katmandu, the legislation authorizing special trade preferences for Nepal grants duty-free tariff benefits for up to 66 types of Nepali items, including certain carpets, headgear, shawls, scarves, and travel goods.

The Nepal program is authorized for ten years and designed to help Nepal's economy recover from the effects of the earthquakes that struck the country in 2015. The program grants duty-free tariff benefits for Nepali exports not currently eligible for benefits under the General System of Preferences. The Nepal Trade Preferences Legislation also outlines a trade capacity building program, focused on helping Nepal implement the World Trade Organization's Trade Facilitation Agreement (TFA).

"This is a tremendous opportunity for Nepali business to expand their imports to US markets," US Ambassador to Nepal Alaina B Teplitz was quoted in the embassy statement, adding that the US looked forward to learning more about Nepal's plans for implementing the TFA and how the United States government could contribute to this goal.

For the new trade preference program to go into effect, certain administrative steps need to be completed in the US, the statement further said. First, the president must certify that Nepal meets the eligibility requirements of the program, which are the same as those for African Growth and Opportunity Act countries.

The US is also required to request a review by the US International Trade Commission of the products covered by the preference program to ensure that an increase in imports of these products into the US market will not negatively affect the US economy. These statutorily-required reviews will take several months to complete, according to the embassy.

Meanwhile, Nepali entrepreneurs have asked the government to update Nepal's labor laws, provide uninterrupted power and facilitate exporters
to benefit from the US move.

According to Chandi Prasad Aryal, president of Garment Association Nepal, the US market used to make up 85 percent of the total exports of garments from Nepal. The move could benefit Nepal, if the government took it seriously and provided necessary facilities to boost exports, he said.

"The industry has today been squeezed down to only Rs 5 billion. It used to export Rs 12 billion in garments right until 2002," he said.