WASHINGTON — The Obama administration is currently reviewing whether to give duty-free benefits to Nepal on a limited number of imported products, including some apparel and accessories.
The country suffered a devastating earthquake and aftershock in April and May of last year that claimed the lives of nearly 9,000 people and injured more than 22,000.
With the intent of promoting economic recovery in the devastated country, Congress approved duty benefits for Nepal on a select number of categories in a broad Customs and trade enforcement legislative package that was enacted at the end of February.
Nepal is nestled between China and India, both big producers of apparel and textiles for U.S. companies. However, neither country has duty-free benefits, which could give Nepal a competitive boost in the limited number of categories.
But Nepal’s trade numbers are small by comparison, making it a very minor supplier. For the year ending February, total textile and apparel imports to the U.S. were $52 million.
The U.S. International Trade Commission is currently reviewing 66 products to determine whether they are “import sensitive” and will have any impact on domestic production.
Among the products under consideration for duty benefits are: hats, shawls, scarves, travel bags, pocket accessories, luggage and gloves.
“Brands and retailers are interested in developing sourcing in Nepal,” said Julia Hughes, president at the U.S. Fashion Industry Association. “First we need to get approval for the duty-free benefits. But while the administration is preparing their reviews, we are starting to look for sourcing connections in Nepal to develop those relationships.”
Hughes said she expects trade with Nepal to expand if the duty benefits are approved.
The ITC is holding a public hearing in connection with its investigation on June 9. The U.S. Trade Representative’s office requested the analysis from the ITC, which will submit a report to USTR by the end of September and the administration will then determine whether the products are eligible for benefits.