Background

The U.S. recently welcomed Nepal’s efforts on a number of trade issues but said additional progress is needed.

The Office of the U.S. Trade Representative reports that at the sixth meeting of the bilateral Trade and Investment Framework Agreement Council held May 19 in Kathmandu, officials from trade, agriculture, finance, labor, and other relevant agencies discussed a range of bilateral trade and investment-related issues covered under the TIFA, including policies impacting the investment climate, digital economy, intellectual property protection and enforcement, customs and trade facilitation, agricultural trade, market access and technical barriers to trade, Nepal’s graduation from least-developed country status, labor rights, and utilization of the Nepal Trade Preference Program. Highlights of these discussions include the following.

- Nepal shared its concern about the underutilization of the NTPP, which grants Nepal non-reciprocal duty-free treatment for certain travel goods, apparel, made-up textiles, and headgear products covered by 77 eight-digit HTSUS tariff lines otherwise ineligible for duty-free treatment under the Generalized System of Preferences. Nepal wants to expand the list of eligible products and extend the program beyond its current Dec. 31, 2025, expiration, but USTR’s report on the meeting said nothing about either proposal.

- Nepal said it has made efforts to improve its trade and investment climate to attract additional investment from the U.S. The U.S. welcomed those efforts and encouraged Nepal to continue them but also outlined additional policy reforms that could further enhance the business climate in Nepal.

- Nepal expressed interest in expanding bilateral trade in information technology-related services, but the U.S. emphasized the importance of certain policies related to digital trade that promote inclusive economic growth and innovation.

- The U.S. indicated that additional progress is needed in Nepal’s intellectual property protection and enforcement, noting its interest in continuing to provide capacity building in this area and engaging with Nepal on potential legislative reforms.

- The U.S. praised Nepal for its efforts to implement legal and policy reforms in various sectors in order to protect workers’ rights.

- To help increase dialogue on agricultural trade issues, the U.S. suggested that Nepal join the Agriculture Innovation Mission for Climate, a program that increases investment in agricultural innovation for climate-smart agriculture and food systems.

The two sides said they plan to “deepen their engagement” in the coming months ahead of the next TIFA Council meeting in Washington, D.C., in 2024.

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