May 15 2015
Washington—Senator Dianne Feinstein (D-Calif.) offered an amendment to grant trade preferences to Nepal as part of the trade authority legislation now under consideration.
The amendment would allow for the duty-free import of textiles and apparel products from Nepal and mirrors the Nepal Trade Preferences Act, which Feinstein introduced in January.
“Nepal has been devastated by recent earthquakes and will need significant help to rebuild,” Feinstein said. “One step Congress can take is to remove tariffs on Nepal’s textiles and garments, a move that would mirror how many developing nations in Africa are treated.
“While these products account for only 0.02 percent of total U.S. apparel imports, this modest bill would provide a big boost to Nepal’s economy. With the cost of recovery in the billions of dollars, the least we can do is approve this bill to help this struggling country.”
After the 2005 elimination of the global garment quota, the Nepal garment industry declined significantly:
- Since 2005, the number of people employed in that sector dropped from more than 90,000 people to fewer than 5,000 today.
- Textile and apparel exports by volume from Nepal to the United States fell from approximately 19 million square meters in 2005 to 4.6 million in 2014.
- Despite being an impoverished country, Nepal’s garments are subject to an average U.S. tariff of 11.7 percent and can be as high as 32 percent.
- Authorizes the president to provide duty-free treatment to products from Nepal if it meets the same eligibility requirements outlined in the African Growth and Opportunity Act;
- Stipulates that 35 percent of the value of covered articles must be derived from Nepal. This will prevent goods from simply being passed through Nepal to the United States.
- Defines the eligible products as textiles and apparel wholly assembled in Nepal as well as hand loomed, handmade, folklore articles and ethnic printed fabrics;
- Initially limits the total volume of duty-free imports at 1.5 percent of total U.S. textile and apparel imports, and only permits a 0.33 percent annual increase thereafter.
- Authorizes the duty-free treatment for up to 10 years.