Nepal plans to hold long overdue talk on TIFA with US in August

The Ministry of Commerce and Supplies (MoCS) has proposed to hold the long overdue talks on Trade and Investment Framework Agreement (TIFA) with the US government next month.

Nepal and the US had signed TIFA on April 15, 2011, to monitor trade and investment relations between the two countries, identify opportunities for expanding trade and investment, and identify relevant issues, such as those related to the protection of intellectual property rights, worker rights, and the environment.

The agreement was signed by then deputy prime minister and commerce and supplies minister Bharat Mohan Adhikari and US trade representative Ron Kirk. Following this, a joint council comprising representatives of both the countries was formed.

As per the agreement, the joint council was supposed to meet once every year; not a single meeting has been held. But the meeting have got postponed due to various reasons.

TIFA was expected to give a new lease of life to the Nepali readymade garment industry, which has been suffering since the US abolished the multi-fibre arrangement quota system on January 1, 2005. Nepal’s third-country exports of readymade garments, which stood at Rs 11.89 billion in the fiscal year 2002-03 has declined to Rs 6.04 billion by fiscal 2004-05. Such exports stood at Rs 4.44 billion at the end of 10 months of the current fiscal.

Moreover, with the abolishment of multi-fibre agreement, the US has introduced a facility called Generalised System of Preferences (GSP) to promote economic growth in the developing world, under which preferential duty-free entry is provided for over 4,000 Nepali products destined for the US market. The facility, however, has excluded most of the textile and apparel products.

The ministry and the Office of the United States Trade Representative had previously agreed to hold the meeting in Kathmandu in the last week of June to discuss over these issues, but the meeting was cancelled due to the inability of the US official to visit Nepal.

They have now proposed that the talks be held in August. They are communicating with the Office of the US Trade Representative via the US Embassy in Kathmandu on the matter. But the American side has not confirmed the date, as per MoCS Joint Secretary Jib Raj Koirala.

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