Belated shots in the Nepal-US trade

The US has evinced interest in investment in Nepal. Washington wants to enter into a bilateral trade agreement with Kathmandu that promises to boost export.
"We're sending back the draft proposal of the Trade and Investment Framework Agreement to the US soon," said Dr Chiranjivi Nepal, economic advisor to Foreign Minister Sujata Koirala. The draft proposal was presented by a team of US Trade Representatives (USTR) to the Ministry of Commerce and Supplies around a month ago. The Ministry of Foreign Affairs, which received the draft today, will forward the document soon after incorporating a "few minor changes".
The trade treaty between Nepal and the US is likely to give a new lease of life to the export of Nepali Readymade Garment (RMG). "It will not only facilitate duty-free access of Nepali RMG in the US market but also help boost trade," explained Dr Nepal.
During her recent visit to the US, Koirala lobbied hard with the US Senators for duty free access of the Nepal RMG. The trade agreement will now expedite the export.
Lack of proper initiative in economic diplomacy by erstwhile governments was the primary reason behind the nation's slackening grip over the US market, which once used to be the largest buyer of Nepali RMG.
As per Garment Association of Nepal's latest data, the total garment export plunged by 81 per cent.
"Nepal should take the issue unilaterally since the country is passing through a political transition phase after the decade-long conflict," reasoned a diplomat.
"Currently, Nepal's trade with the US is comfortable. But the picture may not all that rosy after a couple of years since America is fast closing in on the trade deficit," he added.
The US has halved its trade deficit with Nepal between 2004 and 2008. In 2004 the deficit was $117.5 million but in 2008 the US has decreased its trade deficit with Nepal to $56.4 million.
According to the Foreign Trade Statistics of the US Census Bureau, the deficit has come down to only $18.5 million in the six months of 2009.
Nepal has signed bilateral investment treaties with Britain, Finland, France, Germany, India, Mauritius, and Norway, according to the Foreign Investment Division, Department of Industry.
At present, there are 1,570 foreign investment projects in Nepal, whose cumulative worth is approximately $2.13 billion.

Foreign investment in Nepal
KATHMANDU: As of December 15, 2008 India was by far the most important foreign investor in Nepal, with about 26.4 per cent of the total projects. With five of the 10 largest foreign enterprises, India has a total 414 ventures accounting for nearly 45 per cent of total foreign investment. With 142 ventures, the US ranks second, accounting for 10.4 per cent of total investment. The total number of US projects is Nepal stands at 142 and with $238.32 million total cost.
Ranking In terms of total foreign investment:
1. India
2. the US
3. China
4. South Korea
5. the UK
6. Norway
7. Japan