Nepal invites US official to sign TIFA
KATHMANDU, May 12: Nepal has invited Deputy US Trade Representative Demetrios Marantis for signing Trade and Investment Framework Agreement (TIFA), which the two countries negotiated out last month.
We have informed the US Trade Representative (USTR) Office that we are at the last leg of completing all necessary formalities and invited Marantis for signing the agreement, Commerce Secretary Purushottam Ojha told Republica.
The US is yet to respond to Nepal´s call.
Once signed, TIFA will replace bilateral Economic and Trade Agreement (ETA) that Nepal and US signed in 1947. TIFA has, among others, provisions that facilitate Nepal to gain favorable market access in the largest economy in the world. It recognizes the difference in economic and trading status between Nepal and US and commits to reduce tariff and non-tariff trade barriers.
The agreement has seven articles related to trade, investment and technical assistance. However, the accord, being the framework agreement, does not categorically mentions any promises. But 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 will 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,” said Ojha.
TIFA also incorporates US readiness to pledge technical assistance to Nepal for raising the country´s capacity to widen commodity base and increase exports. Under TIFA, US has expressed eagerness to support Nepal in product development and also extend assistance to build trade related infrastructure. Increasing US investment and transfer of technology is another crucial component of TIFA.
US is the third biggest market of Nepali commodities, after India and European Union. However, the economic activities between the two countries had eroded sharply in recent years due to change in global trading regime and conflict and political transition in Nepal.
Nepal has received only nominal investment from US and its major exports like readymade garment have also collapsed. As a result, bilateral trade between Nepal and the US stands very nominal with Nepal enjoying trade surplus of Rs 180 million.
Recognizing the weak business linkages between private sector players, despite decade-long trade ties between the two countries, TIFA envisages encouraging and facilitating contacts between enterprises and other private sector groups in each other territories.
According to the draft agreement, TIFA will come into effect as soon as two sides signed it and any party can withdraw from the agreement by providing written notice of withdrawal to the other party.