Republica | 2011-03-29
Seal on TIFA deal by mid-April
KATHMANDU, March 29: Nepal and the United States are all set to sign the Trade and Investment Framework Agreement (TIFA), which is expected to create favorable access for Nepali goods in the US market, in mid-April.
Though both the countries had finalized the TIFA a year ago, putting seal on the deal was getting delayed, creating confusion over the prospect of Nepali exports in the world´s largest market.
"We are doing homework for TIFA agendas and preparing to sign the pact by mid-April," Purushottam Ojha, secretary at the Ministry of Commerce and Supplies (MoCS), told Republica on Monday.
Providing duty free access to Nepali goods in the US market and security of US investment in Nepal would be the major issues to be included in the agreement.
“Given the absence of a forum for bilateral talks, the TIFA agreement would also be instrumental for regular inter-governmental talks on trade," Ojha added.
Though both the sides have agreed in principle to sign the deal, the process of signing the agreement was delayed due to delay in formation of new government in Nepal.
Once signed, TIFA will replace bilateral Economic and Trade Agreement (ETA) that Nepal and the US had signed in 1947. This will pave the way for preferential facilities for Nepali exports in the US, as TIFA has, among others, provisions that facilitate Nepal to gain favorable market access in the US.
It acknowledges the difference in economic and trading status between Nepal and US and commits to bring down tariff and non-tariff barriers existing in trade between the two countries. However, the accord, being the framework agreement, does not make specific promises.
Source at the MoCS said the agreement has seven articles related to trade, investment and technical assistance. It provisions establishment of commerce secretary-level Nepal-US Council on Trade and Investment (NSCTI) as a permanent mechanism that will meet at least once a year to work out means and ways to expand trade and investment.
The council is envisaged to serve as a forum for negotiation, monitor trade and investment relations, identify opportunities for expanding trade and investment and sort out concerns and constraints related to trade and investment.
TIFA also ensure US commitment for more technical assistance for strengthening capacity of Nepal to expand commodity base and boost exports.
Under the agreement, the US — the third biggest market for Nepal after India and the European Union — has expressed eagerness to support Nepal in product development and also extend assistance to build trade related infrastructures. Increasing US investment and transfer of technology are the other vital components of TIFA.
TIFA is expected to give new lease of life to Nepal´s trade with the US, which has been declining after the phase out of duty-free quota access for Nepali readymade garment (RMG).