Experts suggest cautious approach to TIFA

Experts today suggested some changes in the draft of the Nepal-US Trade and Investment Framework Agreement (TIFA). "The TIFA draft has not mentioned a word about preferential market access or reducing tariff, each of which is a key to the Nepali export sector," they said.

Speaking at a stakeholders' consultation on Nepal-US TIFA here today, commerce secretary Purushottam Ojha said that the government is positive towards the suggestions made by the stakeholders. "TIFA will create a platform for further negotiations," he said.

"Apart from TIFA, there are many issues to be taken up with the US," Ojha said adding that Nepal also needs to diversify and develop new products, and maximise the utilisation of Generalised System of Preferences (GSP) which is a formal system of exemption from more general rules of World Trade Organisation (WTO).

Specifically, it's a system of exemption from the most favoured nation principle (MFN) that obliges WTO member countries to treat imports of all other WTO member countries no worse than they treat the imports of their 'most favoured' trading partner. In essence, MFN requires WTO member countries to treat imports coming from all other WTO member countries equally. This means imposing equal tariffs on them.

"However, we should be aware of the WTO plus arrangements in the TIFA to protect development interests," said Ratnakar Adhikari, general secretary of SAWTEE on the occasion. The interaction was organised by Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Forum for Protection of Public Interest (Pro Public), Garments Association of Nepal (GAN), Local Initiatives for Biodiversity Reserch and Development (Li-BIRD), Ministry of Commerce and supplies (MoCS), Society of Economic Journalists of Nepal (Sejon) and South Asia Watch on Trade, Economics and Environment (SAWTEE) here today.

Adhikari suggested vital changes in the draft to better clarify and make a frame work agreement for creating the most beneficial document. "We have to adopt a cautious approach and compare other such agreements between the US and other nations," he added.

SAWTEE chairman Dr Posh Raj Pandey also urged the government -- that is approaching the US for the finalisation of TIFA -- to be cautious as after TIFA, "Nepal will enter into a bilateral agreement with the US."

"Most of the South Asian countries have entered into such agreement with the US, except Bangladesh as it did not see any benefit for its garment sector," he said.

"The Nepali garment sector also will not get any benefit from TIFA if we enter into the agreement according to its original draft as the draft has not mentioned a single word about preferential market access or reducing tariff" said GAN vice-president Udaya Raj Pandey.