Govt initiates process for TIFA talks

The government has taken fresh initiatives to resume long-stalled trade negotiation with the United States of America. Nepal and the US had signed Trade and Investment Framework Agreement (TIFA) on April 15, 2011, setting up a bi-lateral forum for trade talks to pave the way for promoting trade and investment in both countries. The then Deputy Prime Minister Bharat Mohan Adhikari and US trade representative Ron Kirk had signed the TIFA that has established Nepal-US Council on Trade and Investment (NUCTI) - a secretary level forum to hold bi-lateral trade negotiations.With the inception of the bi-lateral forum, Nepali business people had hoped that Nepali products will get preferential treatment in the world´s largest economy. They had also hoped that US investment to Nepal will increase. The TIFA was also expected to facilitate effective dialogue on areas like trade, capacity building of Nepali private sector, protection of intellectual property rights of Nepali goods and promotion of US investment in Nepal. Though TIFA has a provision to hold the NUCTI meeting each year, the bi-lateral dialogue couldn´t move ahead as per the plan due to weak diplomatic efforts from the Nepal. “We have begun preparation to hold the long-stalled TIFA meeting in Nepal. However, we have yet to initiate diplomatic process for the talks,” Jib Raj Koirala, joint secretary at the Ministry of Commerce and Supplies (MoCS), said. “We will hold discussion with stakeholders in this regard soon.” Entrepreneurs have long been putting pressure on the government to resume the NUCTI meeting that give forum for Nepal to raise the issues of General System of Preference (GSP) -- preferential treatment for US market -- for 11 Nepali products, including Readymade Garments (RMGs). Nepal´s export to US has been slowing for the last few years in the absence of preferential treatment for Nepali products in the US market. Uday Raj Pandey, president of Garment Association Nepal (GAN) last week urged the government to immediately initiate the process for TIFA meeting where long pending issues of Nepal-US trade will be discussed. Data compiled by Trade and Export Promotion Center (TEPC) shows that Nepal´s exports to the US dropped by 7.9 percent to Rs 4.97 billion in the first eleven months of the fiscal year 2012/13 compared to the figures of the same period of 2011/12. Similarly, Nepal´s import from the US declined by 0.5 percent to Rs 4.56 billion during the review period. Purushottam Ojha, former commerce secretary who had led Nepali trade team at NUCTI meeting, said US-Nepal trade talk was delayed because of low interest on it by the US officials amid political instability and uncertainty over constitution writing process. “In the last meeting, we had convinced US officials for TIFA agreement assuring that there will be stable government and democratic constitution will be formulated in time. But now both of them have become elusive,” added Ojha. He said consecutive governments also failed to put strong diplomatic efforts to persuade the US officials for the talks.