Stakeholders say Nepal should intensify diplomatic initiative for passing of the bill tabled in the American Senate by Senator Dianne Feinstein at the start of January to allow duty-free entry of textiles and apparel products from Nepal for 10 years.
They claim that the bill can be passed if the government were to lobby seriously, and demand intensifying of initiative now that Nepali ambassador to America has already been appointed. The Democratic Senator had submitted a similar bill even earlier but that had mentioned duty-free entry for items produced in 13 least developed countries (LDC). “She has proposed only for Nepal and that too for garments making us hopeful. Export will double if the bill were to be passed,” acting president of Nepal Garment Association Chandi Aryal says.
Nepali garment currently has to compete with Bangladeshi products. Aryal says garment industry in Nepal can again flourish as the bill only proposes duty-free entry for Nepali products that will increase competitive capacity in the American market. The bill proposes that the facility should be extended to Nepal, among the poorest Asian countries, for 10 years.
He reveals entrepreneurs are putting pressure on the Nepal government to lobby for passing the bill and the government is also positive. “Commerce minister, finance minister and other ministers are positive. The bill can be passed as there are no grievances about Nepal in America now,” he states. He adds the entrepreneurs are planning to meet Prime Minister Sushil Koirala to urge the latter to lobby.
The government has already written to the Nepali Embassy in America through the Foreign Ministry to lobby for passing of the bill. “We have already written to the embassy immediately after introduction of the bill,” Joint Secretary at the Ministry of Commerce and Supplies Jeevan Raj Koirala says. “The embassy may be taking initiative but we have yet to receive any response,” he adds. He claims the ministry can also provide other technical assistance if the embassy were to ask for it.
Export of garments was Rs 5.60 billion in the last fiscal year. It was Rs 4.05 billion in 2068/69, and Rs 3.82 billion in the following year. Garments follow woolen carpets, yarns and textiles as the highest exported items of Nepal. There was high export of Nepali garment to America in the 1990s due to duty-free entry and the state of garment industry has deteriorated after America ended the facility.
“Countries like Sri Lanka and Bangladesh have been lobbying for duty-free entry by appointing trade experts and lawyers in America. There will be high chance for passing the bill if Nepal also were to follow suit,” Aryal says.
Contribution of the garment industry to gross domestic product (GDP) of Nepal is high and the industry is also creating employment opportunities. “Garment industry is in a good state in the present economy, and it can have a huge impact on poverty alleviation and employment if Nepali garments were to get duty-free entry in America. America also considers these factors. So our chance is good this time,” he reasons.
America has provided Generalized System of Preferences (GSP) facilities to 97 percent of Nepali items but that have not been extended to garments, textiles, pashmina and other items with greater potential for export. America had stopped GSP facilities a year ago for amendment while Nepal has also proposed for GSP facilities for garments, textiles, pashmina and other items. The matter is still under consideration in America.
America has extended GSP facilities to 5,000 items produced by the LDCs. The items not included in the duty-free list face customs duty of up to 27 percent. It is currently 11.7 percent for garments.