There is
a very welcoming news for the Nepalese garment industry this week: thanks to the US
senator US Senator Dianne Feinstein, who introduced the Nepal Trade
Preferential Act in the congress, and President Obama who signed it today. The
bill, which has now become a legislation with the president's signature, authorizes
duty-free tariff benefits for up to 66 types of items, including certain
carpets, headgear, shawls, scarves, and travel goods made in Nepal. This
legislation will remain valid for next 10 years. It aims to boost the Nepalese
textile and apparel industry which has been severely impacted since 2005 when
the global garment quota was eliminated. There are some specifics in the
legislation which are targeted to promote the textile, garments, and carpet
products made in Nepal utilizing local traditions and cultures:
- The legislation covered products should not be import-sensitive (i.e., should not be competitive to other similar types of import products in the US). Also, 35% of these products value must be derived from Nepal, in that it can't be just shipped via Nepal.
- The textiles and apparel products should be assembled in Nepal. These products can be hand loomed, handmade, folklore articles and ethnic printed fabrics;
- Nepalese industry should be mindful that there is a limit in the total quantity of exports. The total volume of duty-free imports should not be 1.5% of total U.S. textile and apparel imports.
More
analysis on this topic will be forthcoming in this blog. To know more about the legislation, please visit:
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