The Readymade garments (RMG) manufacturing were initially promoted by the business people from neighboring countries in mid 1980s in Nepal to take an advantage of quota free access provided by the industrialized countries including the United States of America. The RMG industries accounted the largest export oriented manufacturing industry contributing about 30 p.c. of the total exports earnings in the first decade of its manufacturing and registered a historical high exports amounting to USD 400 million 2001-02 in the country. Further, the establishment of about 1200 RMG industries had generated employment to around 400,000 people directly and indirectly.
However, Nepali RMG exports have been facing stiff competition in the international market following the expiry of Multi Fiber Agreement (MFA) to phase out all textile and clothing quotas by early 2005 which have resulted at the decline of RMG exports which lately hang around at USD 500 to 600 annually.
Nepal has been advocating to provide duty free access to the RMG exports in the United States of America as the latter occupied an important market in its overall export volume. United States government has approved the bill facilitating Trade Preferences for Nepal which allowed duty free access to Seventy Seven different items including the carpets, travel goods and other apparels. GAN would take the opportunity to express sincere gratitude and appreciations to the US Law Makers and Administration for the bill facilitating Trade Preferences for Nepal.However, RMG articles under Chapter 61 & 62, in which Nepal has core competence have not yet been included in these fresh arrangements.
In GAN’s view this bill was conceptualized by the Hon American Law Makers, with an objective of providing immediate impetus for revival of Nepalese economy devastated by great earthquake taking place in the year 2015 and long insurgency and political transition almost over two decade earlier. This objective would not be met with the currently listed seventy seven eligible articles covered by the bill in either short term or medium term, as these are not the products in which Nepalese industries have either core competence or comparative advantages. These articles hardly occupy 4% of the total current exports to USA.
Chandi Prasad Aryal