February 25, 2016 Sujeev Shakya

Leveraging Exports To US

It is always heartening to hear news that can #Unleash #Nepal’s potential. On 25 February President Obama  U.S. President Barack Obama signed legislation authorizing special trade preferences for Nepal, which will grant duty-free tariff benefits for up to 66 types of items, including certain carpets, headgear, shawls, scarves, and travel goods. (Press Release: http://nepal.usembassy.gov/pr-02-25-2016.html)

Nepal did well exporting carpets in the 1990s till crowding in the industry, compromise of quality and unscrupulous practices led to the industry facing major problems. Similarly, the Pashmina industry faced the same problems. Hope there are lessons being learnt on how not to leverage this as an arbitrage opportunity like for readymade garments in 1980s (http://www.sawtee.org/publications/Research-Brief-2.pdf)

The new Bill gives opportunities for Nepali businesses not to use it as arbitrage advantage but as a support to further exports by developing core competencies and work on some of the comparative advantages that Nepal has in terms of the listed items.

International investors also have advantage to explore using this window of opportunity to provide financial investment along with marketing and global business knowledge to leverage heritage skills sets along with some core comparative advantages unique to Nepal.

Of course, the Nepali political forces should refrain from using their trade union organizations to spoil the party by asking for more wages and perks in view of this new bill. In the past, every good opportunity for business is seen by worker unions to corner the owners for more benefits for less work.

Nepal Economic Forum and beed management will continue to provide detailed updates. If you are interested to receive further information on this issue, please contact info@beed.com.np 

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